Organizational Behaviour 9781292016559, 1292016558

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Organizational Behaviour

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SeCOnD eDitiOn

OrganizatiOnal BehaviOur StePhen P. rOBBinS San Diego State university

tiMOthY a. JuDge university of notre Dame

tiMOthY t. CaMPBell Stafford associates

Harlow, England • London • New York • Boston • San Francisco • Toronto • Sydney • Dubai • Singapore • Hong Kong Tokyo • Seoul • Taipei • New Delhi • Cape Town • São Paulo • Mexico City • Madrid • Amsterdam • Munich • Paris • Milan

Pearson Education Limited Edinburgh Gate Harlow CM20 2JE United Kingdom Tel: +44 (0)1279 623623 Web: www.pearson.com/uk Authorised adaptation from the United States edition, entitled ORGANIZATIONAL BEHAVIOR,16th Edition by ROBBINS, STEPHEN P.; JUDGE, TIMOTHY A., published by Pearson Education, Inc. publishing as Prentice Hall, Copyright ©2015 All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage retrieval system, without permission from Pearson Education, Inc. United Kingdom adaptation edition published by PEARSON EDUCATION LTD, Copyright © 2016 First published 2010 Second edition published 2017 (print and electronic) © Pearson Education Limited 2010 (print) © Pearson Education Limited 2017 (print and electronic) The rights of Stephen P. Robbins, Timothy A. Judge and Timothy T. Campbell to be identified as author of this work have been asserted by them in accordance with the Copyright, Designs and Patents Act 1988. The print publication is protected by copyright. Prior to any prohibited reproduction, storage in a retrieval system, distribution or transmission in any form or by any means, electronic, mechanical, recording or otherwise, permission should be obtained from the publisher or, where applicable, a licence permitting restricted copying in the United Kingdom should be obtained from the Copyright Licensing Agency Ltd, Barnard’s Inn, 86 Fetter Lane, London EC4A 1EN. The ePublication is protected by copyright and must not be copied, reproduced, transferred, distributed, leased, licensed or publicly performed or used in any way except as specifically permitted in writing by the publishers, as allowed under the terms and conditions under which it was purchased, or as strictly permitted by applicable copyright law. Any unauthorised distribution or use of this text may be a direct infringement of the authors’ and the publisher’s rights and those responsible may be liable in law accordingly. All trademarks used herein are the property of their respective owners. The use of any trademark in this text does not vest in the author or publisher any trademark ownership rights in such trademarks, nor does the use of such trademarks imply any affiliation with or endorsement of this book by such owners. The screenshots in this book are reprinted by permission of Microsoft Corporation. Pearson Education is not responsible for the content of third-party internet sites. The Financial Times. With a worldwide network of highly respected journalists, The Financial Times provides global business news, insightful opinion and expert analysis of business, finance and politics. With over 500 journalists reporting from 50 countries worldwide, our in-depth coverage of international news is objectively reported and analysed from an independent, global perspective. To find out more, visit www.pearson.com. ISBN: 978–1-292–01655–9 (print) 978–1-292–01657–3 (PDF) 978–1-292–13899–2 (ePub) British Library Cataloguing-in-Publication Data A catalogue record for the print edition is available from the British Library Library of Congress Cataloging-in-Publication Data Names: Robbins, Stephen P., 1943- author. | Judge, Tim, author. | Campbell, Tim, author. Title: Organizational behaviour / Stephen P. Robbins, San Diego State University, Timothy A. Judge, University of Florida, Timothy T. Campbell, Stafford Associates. Other titles: Organisational behaviour Description: 2nd Edition. | New York : Pearson, 2016. | Revised edition of Organizational behaviour, 2010. Identifiers: LCCN 2016021310 | ISBN 9781292016559 Subjects: LCSH: Organizational behavior. | Personnel management. | Psychology, Industrial. | Leadership. Classification: LCC HD58.7 .R6223 2016 | DDC 302.3/5—dc23 LC record available at https://lccn.loc.gov/2016021310 10 9 8 7 6 5 4 3 2 1 20 19 18 17 16 Cover image © Mike Hill / Getty Images Print edition typeset in Sabon MT Pro Regular 9.5/12 pt by Lumina Datamatics, Inc. Print edition printed and bound by L.E.G.O. S.p.A., Italy NOTE THAT ANY PAGE CROSS REFERENCES REFER TO THE PRINT EDITION

Brief contents Preface xxii Authors’ acknowledgements  xxiv Publisher’s acknowledgements  xxv  1 What is organizational behaviour?

2

 2 Diversity in organizations

34

 3 Attitudes and job satisfaction

58

 4 Personality and values

82

 5 Perception, individual decision making and creativity

114

 6 Motivation concepts

146

 7 Motivation: from concepts to applications

178

 8 Emotions and moods

208

 9 Foundations of group behaviour

240

10 Understanding work teams

272

11 Communication

298

12 Leadership

330

13 Power and politics

366

14 Conflict and negotiation

396

15 Foundations of organization structure

428

16 Organizational culture

456

17 Human resource policies and practices

488

18 Organizational change and stress management

520

Glossary 554 Indexes 565

Lecturer Resources

ON THE WEBSITE

For password-protected online resources tailored to support the use of this textbook in teaching, please visit http://catalogue.pearsoned.co.uk/educator/product/ Organizational-Behaviour-2E/9781292016559.page

Contents Preface  xxii Authors’ acknowledgements   xxiv Publisher’s acknowledgements  xxv

Chapter 1 What is organizational behaviour?

2

Google: the happiness machine 3 Reflection 4 The importance of interpersonal skills Employability AND Organizational behaviour What managers do Management functions Management roles Management skills Effective versus successful managerial activities A review of the manager’s job Enter organizational behaviour Complementing intuition with systematic study Myth or science? ‘Preconceived notions versus substantive evidence’ Big data Disciplines that contribute to the OB field Psychology Social psychology Sociology Anthropology There are few absolutes in OB Challenges and opportunities for OB Responding to economic pressures Responding to globalization Managing workforce diversity Improving customer service Face the facts Demographic ageing Improving people skills Working in networked organizations Enhancing employee well-being at work Creating a positive work environment OB in the news Richard Branson tells staff – take as much holiday as you like Improving ethical behaviour glOBal Does national culture affect organizational practices? Coming attractions: developing an OB model An overview Inputs

4 5 5 5 6 7 8 9 9 9 10 11 12 12 13 13 13 13 14 14 14 18 18 18 19 19 19 20 20 21 21 22 22 23

viii  contents

Processes 23 Outcomes 23 Summary 26 Implications for managers 26 Point/Counterpoint Lost in translation? 27 Questions for review 27 Experiential exercise Workplace diversity 28 Ethical dilemma Lying in business 29

Case incident 1 Trust, pride and camaraderie at Ferarri Case incident 2 Should managers walk around?

29 30

Endnotes 31

Chapter 2 Diversity in organizations

34

Life without limits 35 Reflection 36 Diversity 36 Demographic characteristics of the European workforce 36 Levels of diversity 36 Discrimination 37 Biographical characteristics 38 Age 38 Gender 39 Myth or science? ‘You can’t teach an old dog new tricks!’ 40 Race and ethnicity 41 Disability 41 OB in the news Obesity can be considered a disability, European Court rules 42 Other biographical characteristics: tenure, religion and cultural identity 42 glOBal The benefits of cultural intelligence 44 Ability 44 Intellectual abilities 44 Physical abilities 45 The role of disabilities 47 Implementing diversity management strategies 47 Attracting, selecting, developing and retaining diverse employees 47 Diversity in groups 48 Effective diversity programmes 48 Employability AND Diversity 49 Face the facts Company diversity policies 49 Summary 50 Implications for managers 50 Point/Counterpoint Men have more mathematical ability than women 50 Questions for review 51 Experiential exercise Feeling excluded 51 Ethical dilemma Board quotas 52

Case incident 1 The Flynn effect Case incident 2 Increasing age diversity in the workplace

52 53

Endnotes 54

contents   ix

Chapter 3 Attitudes and job satisfaction

58

The most satisfying jobs in the world? 59 Reflection 60 Attitudes 60 What are the main components of attitudes? 60 Does behaviour always follow from attitudes? 61 What are the major job attitudes? 63 Employability AND Attitudes 63 glOBal Exodus phenomenon 66 Job satisfaction 67 Measuring job satisfaction 67 How satisfied are people in their jobs? 67 OB in the news Unhappy workers feel much of their day is a waste of time 68 What causes job satisfaction? 68 Myth or science? ‘Happy workers are productive workers’ 69 The impact of satisfied and dissatisfied employees on the workplace 70 Global implications 73 Face the facts Job satisfaction 73 Summary 74 Implications for managers 74 Point/Counterpoint Managers can create satisfied employees 74 Questions for review 75 Experiential exercise What factors are most important to your job satisfaction? 75 Ethical dilemma The inspector’s dilemma 76

Case incident 1 Money isn’t everything in life Case incident 2 Extreme jobs

76 77

Endnotes 78

Chapter 4 Personality and values

82

Bankers to the poorest of the poor 83 Reflection 84 Personality 84 What is personality? 84 The Myers-Briggs Type Indicator 86 OB in the news Facebook reveals secrets you haven’t shared 87 The Big Five personality model 87 Other personality traits relevant to OB 89 Face the facts Personality 89 Personality and situations 94 Myth or science? ‘We can accurately judge individuals’ personalities a few seconds after meeting them’ 94 Values 96 glOBal An expat personality 96 The importance of values 97 Employability AND Values 97 Classifying values 98 Contemporary work values 98

x  contents

Linking an individual’s personality and values to the workplace Person–job fit Person–organization fit Global implications Personality Values

100 100 100 101 101 101

Summary 105 Implications for managers 105 Point/Counterpoint Traits are powerful predictors of behaviour 106 Questions for review 107 Experiential exercise What organizational culture do you prefer? 107 Ethical dilemma Do you have a cheating personality? 107

Case incident 1 Style and substance had German and French leaders at odds Case incident 2 Bankers back in the classroom

108 108

Endnotes 109

Chapter 5 Perception, individual decision making and creativity

114

The pricetag for creativity: €27 million. The return: priceless 115 Reflection 116 What is perception? Factors that influence perception Person perception: making judgements about others OB in the news European stereotypes Attribution theory Frequently used shortcuts in judging others Specific applications of shortcuts in organizations The link between perception and individual decision making Decision making in organizations glOBal Does multicultural experience make for better decisions? The rational model, bounded rationality and intuition Common biases and errors in decision making Myth or science? ‘No one thinks they’re biased’ Influences on decision making: individual differences and organizational constraints Individual differences Organizational constraints What about ethics in decision making? Three ethical decision criteria Creativity, creative decision making and innovation in organizations Creative behaviour Employability AND Creativity Causes of creative behaviour

116 116 117 117 117 120 121 122 123 123 123 125 127 129 129 130 131 131 133 133 134 134

Summary 136 Implications for managers 136 Point/Counterpoint When in doubt, do! Questions for review Experiential exercise Decision making Ethical dilemma Five ethical decisions: what would you do?

137 137 138 138

contents   xi



Case incident 1 The games industry – where are all the women? Case incident 2 The worst business decisions?

139 140

Endnotes 141

Chapter 6 Motivation concepts

146

Arnold Power 147 Reflection 148 Defining motivation 148 Face the facts Employee motivation 148 Early theories of motivation 149 Hierarchy of needs theory 149 Theory X and Theory Y 150 Myth or science? ‘Helping others and being a good citizen is good for your career’ 150 Two-factor theory 151 McClelland’s theory of needs 152 Contemporary theories of motivation 153 OB in the news Could plants be the key to improving employee motivation? 154 Self-determination theory 154 glOBal How managers evaluate their employees depends on culture 155 Goal-setting theory 156 Self-efficacy theory 159 Reinforcement theory 161 Employability AND Motivation 162 Equity theory/organizational justice 163 Expectancy theory 167 Integrating contemporary theories of motivation 168 Summary 170 Implications for managers 170 Point/Counterpoint Goals get you to where you want to be 170 Questions for review 171 Experiential exercise Goal-setting task 171 Ethical dilemma Employee monitoring 171

Case incident 1 From good to great: motivation at Torfs Case incident 2 Workplace cyberbullies

172 172

Endnotes 173

Chapter 7 Motivation: from concepts to applications

178

Motivation lessons from the best in Europe 179 Reflection 180 Motivating by job design: the job characteristics model The job characteristics model How can jobs be redesigned? Myth or science? ‘Money can’t buy happiness’ Alternative work arrangements Face the facts Teleworking in Europe The social and physical context of work

180 180 182 183 185 188 188

xii  contents

Employee involvement Examples of employee involvement programmes Linking employee involvement programmes and motivation theories Using rewards to motivate employees glOBal Outcry over executive pay is heard everywhere What to pay: establishing a pay structure How to pay: rewarding individual employees through variable-pay programmes OB in the news Most UK employees say green benefits would increase their loyalty to employers Flexible benefits: developing a benefits package Intrinsic rewards: employee recognition programmes

188 189 189 190 190 190 191 195 196 196

Summary 198 Implications for managers 198 Point/Counterpoint Being in the office matters 198 Questions for review 199 Experiential exercise Assessing employee motivation and satisfaction using the job characteristics model 199 Ethical dilemma How much to pay – the minimum wage or a living wage? 200

Case incident 1 The most boring job in the world? Case incident 2 Wearables at work: the new frontier of employee surveillance?

200 201

Endnotes 202

Chapter 8 Emotions and moods

208

Affective computing: reading your mind 209 Reflection 210 What are emotions and moods? The basic emotions The basic moods: positive and negative affect Myth or science? ‘Smile, and the work world smiles with you’ The function of emotions Sources of emotions and moods glOBal Creating highly productive teams across the cultural emotional barrier Emotional labour Affective events theory Emotional intelligence Employability AND Emotions The case for EI The case against EI Emotion regulation OB applications of emotions and moods Face the facts Feelings in the workplace Selection Decision making Creativity Motivation Leadership Negotiation Customer service OB in the news Ignore customer’s emotions at your peril Job attitudes

210 211 212 212 214 215 218 219 220 221 223 223 224 224 225 226 226 226 226 227 227 227 228 228 228

contents   xiii



Deviant workplace behaviours Safety and injury at work How managers can influence moods

229 229 229

Summary 230 Implications for managers 230 Point/Counterpoint The benefits and costs of displaying the emotions the organization wants you to 230 Questions for review 231 Experiential exercise Who can catch a liar? 231 Ethical dilemma Are workplace romances unethical? 232

Case incident 1 Should managers use emotional intelligence (EI) tests? Case incident 2 Abusive customers cause emotions to run high

232 233

Endnotes 234

Chapter 9 Foundations of group behaviour

240

Supergroup: learning from The Rolling Stones 241 Reflection 242 Defining and classifying groups 242 Why do people form groups? 242 Stages of group development 243 Employability AND Groups 244 The five-stage model 244 An alternative model for temporary groups with deadlines 245 Group properties: roles, norms, status, size, cohesiveness and diversity 246 Group property 1: roles 246 Group property 2: norms 249 Group property 3: status 252 Group property 4: size 253 Group property 5: cohesiveness 254 Group property 6: diversity 255 glOBal Making global virtual teams effective 255 Group decision making 257 Groups versus the individual 257 Groupthink and groupshift 258 Myth or science? ‘Are two heads better than one?’ 258 OB in the news Groupthink for an Enron jury? 260 Group decision-making techniques 261 Face the facts Group working 261 Summary 263 Implications for managers 263 Point/Counterpoint People are more creative when they work alone 263 Questions for review 264 Experiential exercise Surviving the wild: join a group or go it alone? 264 Ethical dilemma Is social loafing unethical? 266

Case incident 1 Brainstorming: A lousy idea for ideas? Case incident 2 The dangers of groupthink

266 267

Endnotes 268

xiv  contents

Chapter 10  Understanding work teams

272

Food for thought: Lessons from the kitchen for executives 273 Reflection 274 Why have teams become so popular? Differences between groups and teams Facts the facts Team working Types of teams Problem-solving teams Self-managed work teams Cross-functional teams Virtual teams Multiteam systems Creating effective teams OB in the news Teamwork gives us added personbyte Context: what factors determine whether teams are successful glOBal Developing team members’ trust across cultures Team composition Team process Myth or science? ‘Team members who are “hot” should make the play’ Turning individuals into team players Employability AND Work teams Beware! Teams aren’t always the answer

274 274 275 276 276 276 277 277 278 278 279 280 280 281 284 285 287 288 289

Summary 289 Implications for managers 289 Point/Counterpoint To get the most out of teams, empower them 290 Questions for review 291 Experiential exercise Composing the ‘perfect’ team 291 Ethical dilemma It’s easy to be unethical when everyone else is 291

Case incident 1 Pressure to be a team player Case incident 2 Team building: sociable climbing

292 292

Endnotes 293

Chapter 11 Communication

298

Communication: the difference between life and death? 299 Reflection 300 Functions of communication glOBal Multinational firms adopt English as global language strategy The communication process Direction of communication Downward communication Upward communication Lateral communication Organizational communication Formal small-group networks The grapevine Modes of communication Oral communication Written communication

300 301 301 302 302 303 303 304 304 304 305 305 306

contents   xv

OB in the news How best to protect your employees from internet trolls Face the facts Communication Nonverbal communication Choice of communication channel Channel richness Choosing communication methods Information security Employability AND Communication Persuasive communication Automatic and controlled processing Interest level Prior knowledge Personality Message characteristics Barriers to effective communication Filtering Selective perception Information overload Emotions Language Silence Communication apprehension Lying Myth or science? ‘People are good at catching liars at work’ Cross-cultural communication Cultural barriers Cultural context A cultural guide

308 309 309 310 310 310 314 315 315 315 315 316 316 316 316 316 317 317 317 317 318 318 319 319 319 320 320 321

Summary 322 Implications for managers 322 Point/Counterpoint Social media presence 322 Questions for review 323 Experiential exercise An absence of nonverbal communication 323 Ethical dilemma Defining the boundaries of technology 324

Case incident 1 Communicating at Go Fly Case incident 2 Using social media to your advantage

324 325

Endnotes 326

Chapter 12  Leadership

330

Christine Lagarde’s advice? Grit your teeth and smile 331 Reflection 332 What is leadership Trait theories Myth or science? ‘You need to be popular to be an effective leader’ Behavioural theories Summary of trait theories and behavioural theories OB in the news Leadership in small and medium enterprises Contingency theories Fiedler model Other contingency theories

332 332 334 334 335 335 336 336 338

xvi  contents

Leader–member exchange (LMX) theory 339 Charismatic leadership and transformational leadership 340 Charismatic leadership 340 Employability AND Leadership 343 Transformational leadership 343 Authentic leadership: ethics and trust 346 What is authentic leadership? 346 Ethical leadership 346 Servant leadership 347 Trust and leadership 348 glOBal Leaders broaden their span of control in multinational organizations 350 Leading for the future: mentoring 350 Mentoring 350 Challenges to the leadership construct 351 Leadership as an attribution 352 Substitutes for and neutralizers of leadership 352 Online leadership 353 Finding and creating effective leaders 353



Selecting leaders Training leaders Face the facts Leadership

353 354 354

Summary 355 Implications for managers 355 Point/Counterpoint Leaders are born, not made 355 Questions for review 356 Experiential exercise What is a leader? 356 Ethical dilemma Rewards for failure? 356

Case incident 1 The right stuff: Jeff Bezos of Amazon Case incident 2 Who makes the best leaders: Europeans or North Americans?

357 358

Endnotes 359

Chapter 13  Power and politics

366

Sepp Blatter: the most powerful man in football 367 Reflection 368 A definition of power 368 Contrasting leadership and power 368 Bases of power 369 Formal power 369 Personal power 370 Which bases of power are most effective? 371 Dependency: the key to power 371 The general dependency postulate 371 What creates dependency? 371 Power tactics 372 glOBal Influence tactics in China 373 How power affects people 374 Politics: power in action 375 Definition of organizational politics 375 Face the facts Politics in the workplace 376

contents   xvii

The reality of politics 376 Myth or science? ‘Power breeds contempt’ 378 Causes and consequences of political behaviour 378 Factors contributing to political behaviour 378 Employability AND Politics 380 How do people respond to organizational politics? 381 Defensive behaviours 382 Impression management 382 OB in the news Who is the ‘real’ Bernie Madoff? 384 The ethics of behaving politically 385 Mapping your political career 385 Summary 387 Implications for managers 387 Point/Counterpoint Managing impressions is unethical 387 Questions for review 388 Experiential exercise Power dynamics in teams 388 Ethical dilemma Surviving in tough times 389

Case incident 1 Barry’s peer becomes his boss Case incident 2 Delegate power or keep it close?

390 390

Endnotes 391

Chapter 14  Conflict and negotiation

396

Jamie Dimon and the London Whale 397 Reflection 398 A definition of conflict 398 The traditional view of conflict 398 The interactionist view of conflict 399 OB in the news 1 in 4 of us have an ongoing difficult relationship at work, finds CIPD report 399 Types and loci of conflict 399 Loci of conflict 400 The conflict process 401 Stage I: Potential opposition or incompatibility 401 Stage II: Cognition and personalization 403 Stage III: Intentions 403 Stage IV: Behaviour 405 Stage V: Outcomes 406 Face the facts 407 glOBal Conflict and culture 409 Negotiation 409 Bargaining strategies 410 Myth or science? ‘Teams negotiate better than individuals in collectivistic cultures’ 412 The negotiation process 413 Individual differences in negotiation effectiveness 414 Employability AND Negotiation 414 Third-party negotiations 417 Summary 419 Implications for managers 420 Point/Counterpoint Conflict benefits organizations 420

xviii  contents

Questions for review Experiential exercise A negotiation role play Ethical dilemma Is it unethical to lie, deceive or collude during negotiations?

Case incident 1 Easily offended? Case incident 2 The complexities of negotiation

421 421 422 423 423

Endnotes 424

Chapter 15  Foundations of organization structure

428

This organization is dis-organization! 429 Reflection 430 What is organizational structure? Work specialization Departmentalization Chain of command Span of control Centralization and decentralization Formalization Common organizational designs The simple structure The bureaucracy Myth or science? ‘Hierarchies are a thing of the past’ The matrix structure New design options The virtual organization The boundaryless organization glOBal The world is my corporate headquarters The leaner organization: downsizing

430 430 431 432 433 434 435 435 435 436 437 437 439 439 440 441 441

OB in the news Volkswagen cost cuts will test Herbert Diess Why do structures differ? Organizational strategy Organization size Technology Environment Employability AND Structure Organizational designs and employee behaviour Face the facts Work organization

442 443 444 444 445 445 446 446 448

Summary 448 Implications for managers 449 Point/Counterpoint The end of management? 449 Questions for review 450 Experiential exercise Dismantling a bureaucracy 450 Ethical dilemma Ethical concerns of deskless workplaces 451

Case incident 1 New demands on managers and organizations Case incident 2 How have organizational structures changed?

452 453

Endnotes 453

contents   xix

Chapter 16  Organizational culture

456

A culture out of this world: Mars Inc. 457 Reflection 458 What is organizational culture? A definition of organizational culture Culture is a descriptive term Do organizations have uniform cultures? Strong versus weak cultures Face the facts Organizational culture Culture versus formalization What do cultures do? The functions of culture Culture creates climate The ethical dimension of culture Culture and innovation Culture as an asset Culture as a liability Institutionalization Creating and sustaining culture How a culture begins Keeping a culture alive Employability AND Organizational culture Myth or science? ‘People socialize themselves’ Summary: how cultures form How employees learn culture Stories Rituals Symbols Language Creating an ethical organizational culture OB in the news Toshiba’s once lauded culture became the cause of its problems Creating a positive organizational culture Building on employee strengths Rewarding more than punishing Emphasizing vitality and growth Limits of positive culture Spirituality and organizational culture What is spirituality? Why spirituality now? Characteristics of a spiritual organization Criticisms of spirituality glOBal Creating a multinational organizational culture Global implications

458 458 459 459 460 461 461 461 461 462 463 464 464 465 465 466 466 467 468 468 471 471 471 472 472 472 472 474 474 474 475 475 476 476 476 476 477 477 478 478

Summary 479 Implications for managers 479 Point/Counterpoint Organizational cultures can’t be changed 480 Questions for review 480 Experiential exercise Rate your classroom culture 481 Ethical dilemma Is there room for snooping in an organization’s culture? 481

xx  contents



Case incident 1 Culture drives success at Hilti Case incident 2 An odd couple? P&G and Google combine cultures

482 483

Endnotes 483

Chapter 17  Human resource policies and practices

488

The Cadbury HR battle 489 Reflection 490 Employability AND HR 490 Selection practices 490 How the selection process works 490 Initial selection 491 glOBal Perceptions of fairness in selection methods 492 Substantive selection 494 Myth or science? ‘It’s first impressions that count’ 496 Contingent selection 496 Training and development programmes 497 Types of training 497 Face the facts Employee training in Europe 498 Training methods 499 Evaluating effectiveness 500 Performance evaluation 500 What is performance? 501 Purposes of performance evaluation 501 What do we evaluate? 501 Who should do the evaluating? 502 OB in the news Round-the-clock performance review: why some companies are saying goodbye to annual performance reviews 504 Methods of performance evaluation 504 Suggestions for improving performance evaluations 505 Providing performance feedback 506 The leadership role of HR 507 Designing and administering benefit programmes 508 Drafting and enforcing employment policies 508 Managing work–life conflicts 508 Mediations, terminations and layoffs 510 Summary 510 Implications for managers 510 Point/Counterpoint Social media is a great source of new hires 511 Questions for review 512 Experiential exercise Evaluating performance and providing feedback 512 Ethical dilemma Is it unethical to ‘shape’ your curriculum vitae (CV)? 512

Case incident 1 Sack the poor performers! Case incident 2 The end of the performance appraisal?

513 513

Endnotes 514

contents   xxi

Chapter 18  Organizational change and stress management

520

Lego: King of the castle 521 Reflection 522 Forces for change 522 Planned change 523 Resistance to change 524 Overcoming resistance to change 525 Employability AND Change 527 The politics of change 527 Myth or science? ‘Change is easier when you are in a crisis’ 528 Approaches to managing organizational change 528 Lewin’s three-step model 528 Kotter’s eight-step plan for implementing change 529 Action research 530 Organizational development 530 glOBal The state of perpetual change 533 Creating a culture for change 534 Stimulating a culture of innovation 534 Creating a learning organization 535 Organizational change and stress 537 Work stress and its management 537 What is stress? 537 Face the facts Work-related stress 538 Potential sources of stress 539 Individual differences 541 Cultural differences 542 Consequences of stress 542 Managing stress 543 OB in the news High cost of mental health problems forces employers to act 544 Summary 545 Implications for managers 545 Point/Counterpoint Managing change is an episodic activity 546 Questions for review 547 Experiential exercise Strategy and change 547 Ethical dilemma Is using manipulation to drive change unethical? 548

Case incident 1 When companies fail to change Case incident 2 Preventing burnout and stress at Siemens, Belgium

548 549

Endnotes 549

Glossary 554 Indexes 565

Preface Welcome to the second edition of Organizational Behaviour. This book draws on previous work by Stephen Robbins and Tim Judge, that has long been considered the standard for all organizational behaviour textbooks, to produce a particularly European OB textbook without losing sight of the global context. It continues the tradition of making current, relevant research come alive for students while maintaining its hallmark features – clear writing style, cutting-edge content and compelling pedagogy, while dealing with the variability of organizational behaviour across Europe. This edition is a comprehensive and rigorous revision. We’re confident that this edition reflects the most important research and topical issues facing organizations, managers and employees.

Key changes to the second edition A substantial update: More than 700 new references!

●

Every chapter has been updated and includes new sections

●

The following features are either completely rewritten or substantially revised: ●

Opening vignette

●

Face the facts

●

OB in the news

● glOBal ●

Myth or science?

● Point/counterpoint ●

Experiential exercises

●

Ethical dilemmas

●

Case incidents

●

NEW The Employability AND . . . feature helps the reader understand how the chapter topic will enhance their ability to gain and maintain employment.

●

NEW Photos and captions throughout the text have been updated to help engage students in the concepts being covered.

●

NEW The Summary and Implications for managers sections are now separate features, making it easier for students to focus on and recognize practical ways to apply the c­ hapter’s material on the job.

The features of the book Writing style: a particular feature of the book is the conversational and ‘student friendly’ writ-

ing style. Concepts are carefully explained in an understandable fashion without compromising the more complex theoretical aspects.

Preface  xxiii

Examples: an important method of supporting students understanding of concepts is to relate

what is being learned to the real world. This book is packed full of recent examples drawn primarily from Europe, but also globally, and from a wide variety of organizations. The three-level model of analysis: this book presents OB at three levels of analysis. It begins with individual behaviour and then moves to group behaviour. Finally it adds the organization system to capture the full complexity of organizational behaviour. Opening vignettes: each chapter begins with an introduction to the topic by using a real-world illustration. The intention is to provide an example students can relate back to as the topic is explored and perhaps question their initial assumptions. ‘Myth or science?’ boxes: this feature presents a commonly accepted ‘fact’ about human behav-

iour, followed by confirming or disproving research evidence. Some examples include ‘You can’t teach an old dog new tricks’, ‘First impressions count’ and ‘Money can’t buy happiness’. These boxes provide repeated evidence that common sense can often lead us astray in the attempt to understand human behaviour, and that behavioural research offers a means for testing the validity of commonsense notions. ‘OB in the news’: OB concepts regularly appear in the media, such as job satisfaction, employee

loyalty and workplace conflict. This feature prepares students to recognize and evaluate these issues when presented with them in newspapers, magazines, TV, etc. ‘Face the facts’: these boxes highlight interesting facts from recent surveys that emphasize key aspects of the text. For example, diversity across Europe, the extent of employee engagement, and the popularity of working in teams. Students should be encouraged to further explore the validity, implications and reasons for the results. Experiential exercises: an experiential, hands-on, in-class exercise is included in each chapter

that will make for unique and entertaining exercises to highlight a key chapter concept. Ethical dilemmas: each chapter has an associated ethical dilemma. The recognition of ethical

issues when dealing with people has risen significantly over the past decade. For instance, is it okay to lie during negotiations? Is fudging parts of your CV acceptable because ‘everybody else does it’? Are large bonuses acceptable for top management when the company has posted huge financial losses? This feature helps students to recognize ethical issues and think about how they would resolve them. Case incidents: there are two case incidents at the end of each chapter that are devised to apply what has been learnt in the chapter to short, interesting, real-world events. Point/counterpoint dialogues: an important skill for students is the ability to formulate sup-

ported arguments rather than simply describe concepts. These dialogues allow students to see two sides of an OB controversy and to stimulate their critical thinking. They are especially useful to stimulate class discussions. Employability AND . . . features: employability (the ability to gain and maintain employment)

is high on the agenda across Europe. The proposition for graduates is that they are generally being taught the technical skills they require to enter the workforce, but the additional skills that they really need to perform – such as working with and contributing to a team, time management, making decisions, demonstrating leadership, communicating effectively and many more – are lacking. These are OB issues. This feature helps students to understand how the chapter topic can enhance their employability. Further pedagogy: each chapter has a structure that makes it easy for students to follow. Learning objectives are provided at the outset of each chapter and linked to the text throughout in marginal annotations. These objectives are then linked to the Questions for review at the end of the chapter. There is also a running glossary of key terms and definitions in the margin adjacent to the point at which the term is first discussed at length.

Authors’ acknowledgements We would like to thank the team at Pearson Education for their excellent efforts in getting this book to print and into the hands of students and faculty. Our gratitude to the commitment and dedication of the OB research community, without which there would be no textbook. To Joanne; Helen and David; and Sam and Leo who continue to prove I still have a lot to learn about human behaviour. This book is wholeheartedly dedicated to a great friend and always my big brother, Clynton. Timothy T. Campbell

Publisher’s acknowledgements We are grateful to the following for permission to reproduce copyright material:

Figures Figure 1.1 after Real Managers, Cambridge, MA: Ballinger (Luthans, F., Hodgetts, R.M. and Rosenkrantz, S.A. 1988), with permission from Fred Luthans; Figure 3.2 from When bureaucrats get the blues: Responses to dissatisfaction among federal employees, Journal of Applied Social Psychology, Vol.15(1), July, p. 83 (Rusbult, C. and Lowery, B. 2006), Copyright © 2006, 1985 V.H. Winston, reprinted with permission from John Wiley & Sons, Inc, Reproduced in the format Republish in a book via Copyright Clearance Center; Figure 4.2 from Atlas of European Values, Brill (Halman, L. ed. 2005) p. 55, Copyright © 2011 Atlas of European Values, with permission from Koninklijke Brill NV and Dr Loek Halman of the European Values Study; Figure 4.3 from Making Vocational Choices, Third Edition copyright 1973, 1985, 1992, 1997 by Psychological Assessment Resources, Inc. All rights reserved. Reproduced by special permission of the Publisher, Psychological Assessment Resources, Inc.; Figure 5.3 from Decide and Conquer: Make Winning Decisions and Take Control of Your Life, 1st ed., Pearson Education, Inc (Robbins, S.P. 2004) pp. 164-168 © 2004. Electronically reproduced by permission of Pearson Education, Inc., Upper Saddle River, New Jersey; Figure 6.1 adapted from Maslow, Abraham H., Frager, Robert D. (Editor), Fadiman, James (Editor), Motivation and Personality, 3rd ed. © 1987. Electronically reproduced by permission of Pearson Education, Inc., Upper Saddle River, New Jersey; Figure 6.2 from One More Time: How Do You Motivate Employees?, Harvard Business Review, January 2003 (Herzberg, F.), Copyright © 2003 by the Harvard Business School Publishing Corporation; reprinted by permission, all rights reserved; Figure 6.5 adapted from Building a practically useful theory of goal setting and task motivation: a 35-year odyssey, American Psychologist, September, pp. 705–717 (Locke, E.A. and Latham, G.P. 2002), APA, adapted with permission; Figure 7.1 adapted from Hackman, J. R./ Oldham, G. R., Work Redesign © 1980, p. 77, Adapted by permission of Pearson Education, Inc., Upper Saddle River, New Jersey; Figure 7.2 adapted from Improving Life at Work, Glenview, IL: Scott Foresman (Hackman, J.R. and Suttle, J.L., eds 1977) p. 138, Reprinted by permission of Richard Hackman and J. Lloyd Suttle; Figure 8.3 from Diurnal and Seasonal Mood Vary with Work, Sleep, and Daylength Across Diverse Cultures, Science, Vol.333, Issue 6051, 30 September, pp. 1878–1881 (Golder, S.A. and Macy, M.W. 2011), reprinted with permission from AAAS. Readers may view, browse, and/or download material for temporary copying purposes only, provided these uses are for non-commercial personal purposes. Except as provided by law, this material may not be further reproduced, distributed, transmitted, modified, adapted, performed, displayed, published, or sold in whole or in part, without prior written permission from the publisher; Figure 9.5 from Build a Better Life by Stealing Office Supplies, Kansas City, MO: Andrews & McMeal (Adams, S. 1991) p. 31, Solo Syndication/ Universal Uclick; Figure 10.4 from Team-Role Descriptions from Belbin Team-Role Summary Sheet handout © e-interplace, Belbin Associates, UK, 2000, reproduced with permission from Belbin Associates; Figure 11.5 from Organizational Behaviour (Daft, R.L. and Noe, R.A. 2001) p. 311, republished with permission of Cengage Learning SO; permission conveyed through Copyright Clearance Center; Figure 13.1 from Leo Cullum cartoon 1/6/86 New Yorker, © Leo Cullum/Conde Nast Publications/www.cartoonbank.com; Figure 14.2 from Handbook of Industrial and Organizational Psychology, 2nd ed., Vol.3, Consulting Psychologists Press (Dunnette, M.D. and Hough, L.M. eds 1992) p. 668, K. Thomas ‘Conflict and Negotiation Processes in Organizations’, with permission from Nicholas Brealey Publishing.

xxvi  Publisher’s acknowledgements

Tables Table 1.1 adapted from The Nature of Managerial Work, 1st ed Pearson Education, Inc (Mintzberg, H. 1980) pp. 92–93, ISBN 978-0136104025; Table 4.4 from Culture’s Consequences: Comparing Values, Behaviors, Institutions and Organizations Across Nations, Second Edition. Thousand Oaks, California: Thousand Oaks, California: Sage Publications (Hofstede, G. 2001) Copyright © Geert Hofstede BV, reproduced with permission; Table on page 199 adapted from Hackman, J.R./Oldham, G.R., Work Redesign © 1980, p. 317 Adapted by permission of Pearson Education, Inc., Upper Saddle River, New Jersey; Table 11.2 after When ‘No’ Means ‘Yes’, Marketing, October 1993, pp. 7–9 (Kiely, M. 1993), Reproduced from Marketing magazine with permission of the copyright owner, Haymarket Business Publications Ltd; Table 12.1 from From transactional to transformational leadership: learning to share the vision, Organizational Dynamics, 18, 3, Winter, p. 22 (Bass, B.M. 1990), Copyright 1990, with permission from Elsevier; Table 12.3 after Substitutes for leadership: their meaning and measurement, Organizational Behavior and Human Performance, p. 378 (Kerr, S. and Jermier, J.M. 1978), Copyright 1978, with permission from Elsevier; Table 13.2 after Doing research in the conceptual morass of organisational politics, paper presented at the Western Academy of Management Conference, Hollywood, CA, April (Krell, T.C., Mendenhall, M.E., Sendry, J. 1987).

Text Extract on page 20 from Richard Branson tells staff: take as much holiday as you like by Claer Barrett, Financial Times, 25 September 2014, © The Financial Times Limited. All Rights Reserved; Extract on page 35 adapted from http://www.nickvujicic.com/, reprinted with permission; Extract on page 42 adapted from Obesity can be considered a disability, European court rules, Financial Times, 18/12/2014 (Shubber, K. and O’Connor, S.), © The Financial Times Limited. All Rights Reserved. Pearson Education Ltd. is responsible for providing this adaptation of the original article; Extract on page 49 adapted from Overview of Diversity Management implementation and impact amongst Diversity Charter signatories in the European Union (2014), European Commission - Directorate-General for Justice © European Union, 2014, © European Union, 1995-2015; Extract on page 63 adapted from Employability: What Are Employers Looking For? by Melanie Allen, http://www.jobs.ac.uk/careers-advice/ interview-tips/1515/employability-what-are-employers-looking-for, Reproduced by kind permission of the author; Extract on page 68 from Job satisfaction - unhappy workers feel much of their day is a waste of time by Gill Plimmer, Financial Times, 26 March 2016, © The Financial Times Limited. All Rights Reserved. Pearson Education Ltd. is responsible for ­providing this adaptation of the original article; Extract on page 76 from The Inspector’s Dilemma, The Open University, http://www.ibe.org.uk/teaching/The%20Inspectordilemma. pdf, reprinted with permission of Institute of Business Ethics; Extract on pages 76–77 adapted from Money isn’t everything in life, Financial Times, 28/05/2008 (Richards, H.), reprinted with permission from Huw Richards, Freelance Journalist; Extract on pages 77–78 adapted from Drawing back from extreme jobs, 03/12/2006 (Millard, R.), © 2006 The Sunday Times nisyndication.com; Extract on page 83 from Muhammad Yunus - Facts Nobelprize.org (Nobel Media AB 2014), http://www.nobelprize.org/nobel_prizes/peace/laureates/2006/yunus-facts. html Copyright © The Norwegian Nobel Institute; Extract on page 87 adapted from Facebook reveals secrets you haven’t shared, Financial Times, 11/03/2013 (McCarthy, B. and Cookson, R.), © The Financial Times Limited. All Rights Reserved. Pearson Education Ltd. is responsible for providing this adaptation of the original article; Extract on page 94 from The dual lens model: A comprehensive framework for understanding self–other agreement of personality judgments at zero acquaintance, Journal of Personality and Social Psychology, Vol.104(3), pp. 355–353 (Hirschmüller, S. et al 2013); Extract on page 108 adapted from Style and substance have German, French leaders at odds, DW.com (James, K.), http://www.dw.com/en/ style-and-substance-have-german-french-leaders-at-odds/a-2786049; Extract on pages 108– 109 adapted from Bankers back in the classroom, Financial Times, 16/10/2013 (Hill, A.), © The Financial Times Limited. All Rights Reserved. Pearson Education Ltd. is responsible

Publisher’s acknowledgements   xxvii

for providing this adaptation of the original article; Extract on page 134 from Global Talent 2021. How the new geography of talent will transform human resource strategies, Oxford Economics (Oxford Economics 2012) p. 5, © 2012 Oxford Economics; Extract on page 139 adapted from A gender agenda for a diversifying gaming industry, FT.com, 04/06/2015 (Jacobs, E.), © The Financial Times Limited. All Rights Reserved. Pearson Education Ltd. is responsible for providing this adaptation of the original article; Extract on page 140 from Business Strategy: A guide to Effective Decision Making, 1st ed, Profile Books (Kourdi, J. 2003), copyright © 2015. Reprinted by permission of Profile Books Ltd and PublicAffairs, an imprint of Perseus Books, LLC, a subsidiary of Hachette Book Group, Inc.; Extract on page 154 adapted from Could plants be the key to improving employee motivation?, European CEO, 26 November 2014 (Meager, L.), http://www.europeanceo.com/business-and-­ management/could-plants-be-the-key-to-improving-employee-­motivation/; Extract on page 172 adapted from The Basics and Beyond in Europe, Great Place to Work by E. Frauenheim, 3rd June 2015, http://www.greatplacetowork.net/publications-and-events/blogs-andnews/2046-the-basics-and-beyond-in-europe; Extract on pages 172–73 adapted from The workplace cyberbullies whose weapon is a smartphone, Financial Times, 04/06/2015 (Jacobs, E.), © The Financial Times Limited. All Rights Reserved. Pearson Education Ltd. is responsible for providing this adaptation of the original article; Extract on page 179 adapted from The 100 Best Workplaces in Europe 2013, http://www.greatplacetowork.net/storage/documents/ Publications_Documents/2013_europe_publication.pdf; Extract on page 195 from M. Berry, Personnel Today, 23 April 2007, Available at http://www.personneltoday.com/articles/ 2007/04/23/40308/most-uk-employees-say-green-benefits-would-­increase-their-loyalty-toemployers.html. Accessed 12 October 2008; Extract on pages 201–202 from Wearables at Work: the new frontier of employee surveillance?, Financial Times, 08/06/2015 (O’Connor, S.) © The Financial Times Limited. All Rights Reserved. Pearson Education Ltd. is responsible for providing this adaptation of the original article; Extract on page 223 adapted from Evaluating emotional intelligence can be testing, Financial Times, 21 September 2014 (Rigby, R.), © The Financial Times Limited. All Rights Reserved. Pearson Education Ltd. is responsible for providing this adaptation of the original article; Extract on page 228 adapted from Companies ignore ‘customer avengers’ at their peril, Financial Times, 27 May 2015 (Mapstone, N.), © The Financial Times Limited. All Rights Reserved. Pearson Education Ltd. is responsible for providing this adaptation of the original article; Extract on page 241 adapted from Superteams, Penguin Portfolio (Tu, K. 2012) pp. 155–188, 9780670921485, Copyright © Khoi Tu, 2012, Reproduced by permission of Penguin Books Ltd; Extract on page 273 from Lessons from the kitchen for executives, FinancialTimes, 26/07/2015 (de Vita, E.), © The Financial Times Limited. All Rights Reserved; Extract on page 279 from Teamwork gives us added personbyte, Financial Times, 19/06/2015 (Harford, T.), © The Financial Times Limited. All Rights Reserved; Extract on page 288 from Global Talent 2021. How the new geography of talent will transform human resource strategies, Oxford Economics (Oxford Economics 2012) p. 7, © 2012 Oxford Economics; Extract on pages 292–293 adapted from Sociable climbing, Financial Management, pp. 16–19 (Orton-Jones, C. 2008), Copyright © 2008, reproduced with permission of Blackwell Publishing and the Financial Management Association in the format Book via Copyright Clearance Center; Extract on page 308 adapted from How best to protect your employees from internet trolls, Financial Times, 14/07/2015 (Twentyman, J.) © The Financial Times Limited. All Rights Reserved. Pearson Education Ltd. is responsible for providing this adaptation of the original article; Extract on pages 324-25 adapted from Go gets to grips with communications, Personnel Today, 1 September 2001 (Xpert HR team), copyright Reed Business Information; Extract on page 334 from You need to be popular, or well-liked to be an effective leader, http://www.work911.com/leadership-development/faq/ mythpopular.htm, Copyright 2007-2008 Robert Bacal/Bacal & Associates, reproduced with permission from Bacal & Associates; Extract on page 335 adapted from Recruiting leaders for SMEs is complex task, Financial Times, 26 July 2012 (Beale, M.), By kind permission of Marcus Beale; Extract on pages 358-359 from Who makes the best leaders?, Personnel Today, 1 June 2005; Extract on page 367 adapted from Sepp Blatter finally lets go of Fifa as FBI noose tightens, The Guardian, 02/06/2015 (Gibson, O.), Copyright Guardian News & Media Ltd

xxviii  Publisher’s acknowledgements

2016; Extract on pages 388-89 adapted from A Simple - But Powerful - Power Simulation, Exchange: The Organizational Behavior Teaching Journal, 3, 4, pp. 38–42 (Bolman, L. and Deal, T.E. 1979), reproduced by permission of Sage Publications, Inc.; permission conveyed through Copyright Clearance Center, Inc; Extract on page 399 adapted from 1 in 4 of us have an ongoing difficult relationship at work, finds CIPD report Press Release (CIPD), http:// www.cipd.co.uk/pressoffice/press-releases/managing-conflict-010415.aspx, Reprinted with the permission of the publisher, the Chartered Institute of Personnel and Development, London (www.cipd.co.uk); Extract on page 400 adapted from Hospital pays out record £4.4m to doctor sacked after having baby by Ross Parry, Telegraph, 16 December 2011, © Telegraph Media Group Limited 2011; Extract on page 429 from This organization is dis-organization, Fast Company, 18 December 2007 (LaBarre, P.), http://www.fastcompany.com/26954/organizationdis-organization, with permission from Fast Company. Copyright © 2010. All rights reserved; Extract on page 452 from What is the right organization design?, Organizational Dynamics, Vol. 36, No.4, pp. 329–44 (Anand, N. and Daft, R. 2007), Copyright 2007 with permission from Elsevier; Extract on page 453 from Organizational structure, Journal of Accountancy, Vol.123, 1, pp. 84–86 (Kion, S. and Markstein, D. 1967), Copyright 1967 American Institute of Certified Public Accountants, Inc. All rights reserved; Extract on pages 442-43 adapted from Volkswagen cost cuts will test Herbert Diess, Financial Times, 20/08/2015 (Bryant, C.), © The Financial Times Limited. All Rights Reserved. Pearson Education Ltd. is responsible for providing this adaptation of the original article; Epigraph on page 456 from Good to Great and the Social Sectors, HarperCollins (Jim Collins 2005) p. 1, Copyright © 2005 by Jim Collins. Reprinted with permission from Jim Collins; Extract on page 460 from Vision 2020 - Strategy Overview, Siemens (siemens.com) p. 22, http://www.siemens.com/about/en/strategic-­ overview.htm ‘Our Culture’ http://www.siemens.com/about/pool/strategy/siemens-strategyoverview-culture.pdf © Siemens AG; Extract on page 474 adapted from Toshiba’s once lauded culture became the cause of its problems, Financial Times, 21/07/2015 (Inagaki K.) © The Financial Times Limited. All Rights Reserved. Pearson Education Ltd. is responsible for providing this adaptation of the original article; Extract on page 474 adapted from Culture eats everything, Financial Times, 21/07/2015 (Lewis, L.), © The Financial Times Limited. All Rights Reserved. Pearson Education Ltd. is responsible for providing this adaptation of the original article; Extract on page 483 after A New Odd Couple: Google, P&G Swap Workers to Spur Innovation, Wall Street Journal (Eastern edition), p. A1 (Byron, E. 2008), Reprinted by permission of Wall Street Journal, Copyright © 2008 Dow Jones & Company, Inc. All Rights Reserved Worldwide; Epigraph on page 488 from Jack F. Welch, with permission from Jack F. Welch; Extract on page 489 adapted from More than 1,000 Cadbury’s workers told to adapt to change to see jobs moved overseas, The Express, 15 September 2015 (Reynolds, M.); Extract on page 513 adapted from Should HR advise managers to sack poor performers or help them improve?, Personnel Today, 29 May (Wileman, A. 2008), http://www.personneltoday.com/hr/ should-hr-advise-managers-to-sack-poor-performers-or-help-them-improve/, copyright Reed Business Information; Extract on page 521 adapted from Lego: King of the castle, Financial Times, 10/07/2014 (Milne, R.) © The Financial Times Limited. All Rights Reserved. Pearson Education Ltd. is responsible for providing this adaptation of the original article; Extract on page 544 adapted from High cost of mental health problems forces employers to act, Financial Times, 04/07/2014 (Smedley, T.), © The Financial Times Limited. All Rights Reserved. Pearson Education Ltd. is responsible for providing this adaptation of the original article; Extract on page 548 from Choosing strategies for change, Harvard Business Review, 57,2, pp. 106–14 (1979). Reprinted by permission of Harvard Business School Press. Copyright © 1976 by the Harvard Business School Publishing Corporation; all rights reserved.

Photos The publisher would like to thank the following for their kind permission to reproduce their photographs:

Publisher’s acknowledgements   xxix

(Key: b-bottom; c-centre; l-left; r-right; t-top) 2 Getty Images: Mike Hill. 3 Alamy Images: VIEW Pictures Ltd. 4 Getty Images: Justin ­Sullivan. 16 Shutterstock.com: Christian Mueller. 17 Press Association Images: AP. 34 ­Getty Images: Mike Hill. 35 Getty Images: TPG. 39 Press Association Images: Peter Byrne / PA ­Archive. 46 ­Shutterstock.com: Sergey Ryzhov. 58 ­Getty ­Images: Mike Hill. 59 Shutterstock.com: ­Gemenacom. 62 The LEGO Group . 65 Getty ­Images: Pawel Libera. 71 Wouter Van Vooren. 82 Getty Images: Mike Hill. 83 Getty Images: Roberto Serra / Iguana Press. 85 Getty ­Images: Bloomberg. 90 ­Getty Images: Bloomberg. 92 Getty Images: John Macdougall. 114 Getty ­Images: Mike Hill. 115 Getty Images: Robyn Beck. 119 Alamy Images: Andrew Fox. 123 Getty Images: ­Larry ­Busacca / for WICT. 133 WikiFoods, Inc. (a unit of Quantum Designs, LLC). 146 Getty ­Images: Mike Hill. 147 Shutterstock.com: Joe Seer. 153 Alamy Images: ­Guillem ­Lopez. 158 ­Shutterstock.com: Sakarin Sawasdinaka. 162 Press Association Images: John Giles / PA Archives. 166 Press Association Images: Tim Ockenden / PA Archive. 178 Getty Images: Mike Hill. 179 ­Shutterstock.com: Northfoto. 187 Getty Images: Ethan Miller. 192 Shutterstock.com: Monkey Business Images. 197 Alamy Images: Blend Images. 208 Getty Images: Mike Hill. 209 Getty Images: Corbis Historical / Rick ­Friedman. 214 Alamy Images: Granger, NYC. 219 Shutterstock.com: VGstockstudio. 222 Alamy Images: Libby Welch. 240 Getty Images: Mike Hill. 241 Alamy Images: London Entertainment. 243 Getty Images: Soren Andersson / AFP. 247 Shutterstock.com: TDC ­Photography. 249 Courtesy of AT&T A ­ rchives and History Center. 259 Getty Images: Bob Pearson / AFP. 272 Getty Images: Mike Hill. 273 Alamy Images: Neil ­Setchfield. 277 Rex Shutterstock: Sipa Press / REX. 281 Shutterstock.com: Wavebreak ­Premium. 284 Getty Images: David Ryder. 288 Alamy Images: Blaize Pascall. 298 Getty ­Images: Mike Hill. 299 Alamy Images: Ton Koene. 300 Alamy Images: epa european pressphoto agency b.v.. 318 Alamy Images: Hongqi Zhang. 330 Getty Images: Mike Hill. 331 Getty Images: Stefan Rousseau / WPA Pool. 333 Getty Images: Scott Eells / Bloomberg. 336 Alamy Images: Henrik Kettunen. 341 Press Association Images: Douglas C. Pizac / AP (l). Reuters: Mal Langsdon (r). 348 Photographic Services, Shell International Limited. 366 Getty Images: Mike Hill. 367 Shutterstock.com: 360b. 370 Press Association Images: Jonathan Brady / PA Archive. 376 Reuters: Luke MacGregor. 379 Reuters: Robert Pratta. 396 Getty Images: Mike Hill. 397 Getty Images: Chris Ratcliffe / Bloomberg. 400 SWNS. 406 Alamy Images: Agencja Fotograficzna Caro. 418 Alamy Images: Amer Ghazzal. 428 Getty Images: Mike Hill. 429 Press Association Images: ­Justin ­Williams / PA Archive. 433 Press Association Images: Nell Redmond / AP. 436 Alamy Images: Mike Abrahams. 440 Getty Images: Bloomberg / Dadang Tri. 445 Rex Shutterstock: NEW LINE CINEMA / The Kobal Collection. 456 Getty Images: Mike Hill. 457 Press Association Images: Orlin Wagner / AP. 460 Alamy Images: Chris ­Dorney. 462 Getty Images: AFP. 467 Getty Images: Jim Spellman / WireImage. 473 Alamy Images: Marjorie Kamys Cotera / Bob D ­ aemmrich ­Photography. 488 Getty Images: Mike Hill. 489 Getty Images: Oli Scarff. 493 Alamy Images: Alvey & Towers Picture Library. 497 Rex S­ hutterstock: Aflo. 502 Rex Shutterstock: SIPA Press. 508 Getty Images: Raveendran / AFP. 520 Getty Images: Mike Hill. 521 Shutterstock.com: Lewis Tse Pui Lung. 524 Press Association Images: Antonio Calanni / AP. 535 ©Unipart Group 2016. 540 Alamy Images: Jeff Gilbert Cover images: Front: Getty Images: Mike Hill

CHAPTER 1 What is organizational behaviour? learning objectives After studying this chapter, you should be able to: 1 Demonstrate the importance of interpersonal skills in the workplace. 2 Describe the manager’s functions, roles and skills. 3 Define organizational behaviour (OB). 4 Show the value to OB of systematic study. 5 Identify the major behavioural science disciplines that contribute to OB. 6 Demonstrate why few absolutes apply to OB. 7 Identify the challenges and opportunities managers have in applying OB concepts. 8 Compare the three levels of analysis in this book’s OB model.

The contradictions are what make human behaviour so maddening and yet so fascinating, all at the same time. Joan D. Vinge

Google: the happiness machine

VIEW Pictures Ltd/Alamy

Google’s various offices and campuses around the globe reflect the company’s overarching philosophy which is nothing less than ‘to create the happiest, most productive workplace in the world’. As ambitious as this goal sounds, the firm could well consider itself to have achieved it. In 2015, Google was ranked number 1 on Fortune’s ‘100 Best Companies to Work For’ list (for the sixth time) and by the Great Place to Work Institute as the ‘World’s Best Multinational Workplace’. A walk around a Google office has been described as a dizzying excursion through a labyrinth of play areas; cafes, coffee bars and open kitchens; sunny outdoor terraces with chaises; gourmet cafeterias that serve free breakfast, lunch and dinner; Broadwaythemed conference rooms with velvet drapes; and conversation areas designed to look like vintage subway cars. When discussing the perks, in the course of a brief conversation, a Googler mentioned subsidised massages; free oncea-week eyebrow shaping; free yoga and Pilates classes; a course she took called ‘Unwind: the art and science of stress management’; a course in advanced negotiation taught by a Wharton professor; a health consultation and follow-up with a personal health counsellor; an author series and an appearance by the novelist Toni Morrison. This is in addition to a full array of more traditional employee benefits. At times Google’s largesse can sound excessive and wasteful from a bottom-line perspective. Yet it would be a mistake to conclude that Google gives out such perks just to be nice. People Operations (or POPS – what Google calls its HR department) rigorously monitors a slew of data about how employees respond to benefits, and it rarely throws money away. At the heart of POPS is a sophisticated employee-data tracking programme, an effort to gain empirical certainty about every aspect of Google’s workers’ lives – not just the right level of pay and benefits but also such trivial-sounding

details as the optimal size and shape of the cafeteria tables and the length of the lunch lines. Google has even hired social scientists to study the organization. The scientists run dozens of experiments on employees in an effort to answer questions about the best way to manage a large firm. POPS has uncovered many nuggets of optimal ­organizational behaviour. One of the biggest findings is that middle managers matter, which overturned Google founders Larry Page and Sergey Brin’s one-time presumption that you could run a company in which nobody was the boss of anyone else. As for the cafeterias, researchers found that the ideal lunch line should be about three or four minutes long – that’s short enough that people don’t waste time but long enough that they can meet new people. The tables should be long, so workers who don’t know each other are forced to chat. And, after running an experiment, Google found that stocking cafeterias with 8-inch plates alongside 12-inch plates encouraged people to eat smaller, healthier portions. Laszlo Bock, the head of POPS, says the ultimate goal is to use Google’s experience to answer some big questions about the workplace: Are leaders born or made? Are teams better than individuals at getting things done? Can individuals sustain high performance over their lifetimes? POPS isn’t close to being able to answer those questions right now, but Bock argues that Google can eventually shed light on some of them. In time, Bock argues, Google’s finding – which it often shares with other HR professionals – may improve all our jobs. ‘You spend more time working than doing anything else,’ he says. ‘If you work 8 or 10 hours a day, it’s more time than you spend sleeping, more time than you spend with your spouse. When you add it up it gets really depressing. You like your job, but for all time it should be – and it could be – something more. So why isn’t it?’

Sources: Farhad Manjoo (2013) ‘The Happiness Machine: how Google became such a great place to work’, Slate, 21 January 2013, http://www.slate.com/ articles/technology/technology/2013/01/google_people_operations_the_secrets_of_the_world_s_most_scientific_human.2.html; James B. Stewart (2013) ‘Looking for a lesson in Google’s perks’, New York Times, 15 March 2013, http://www.nytimes.com/2013/03/16/business/at-google-a-place-to-workand-play.html; https://www.google.com/about/company/. Accessed 8 October 2015.

4  1 what is organizational behaviour?

Google is a company that recognizes the key to its success is people. If its people are effectively managed, they are more likely to innovate, deliver a quality product and service, constantly improve existing offerings and provide performance that is beyond expectations. As the opening vignette demonstrates, Google’s approach to managing its people doesn’t derive from ‘common sense’ or intuition but from knowledge gained through systematic study. This is where organizational behaviour comes into play.

REFLECTION How much of effective management do you think is common sense?

The importance of interpersonal skills

Justin Sullivan/Getty Images

1 Demonstrate the importance of interpersonal skills in the workplace.

Until the late 1980s, business school curricula emphasized the technical aspects of management, specifically focusing on economics, accounting, finance and quantitative techniques. Course work in human behaviour and people skills received minimal attention relative to the technical aspects of management. Over the past three decades, however, business faculty have come to realize the importance that an understanding of human behaviour plays in determining a manager’s effectiveness, and required courses on people skills have been added to many curricula. As a director of leadership at MIT’s Sloan School of Management once put it, ‘M.B.A. students may get by on their technical and quantitative skills the first couple of years out of school. But soon, leadership and communication skills come to the fore in distinguishing the managers whose careers really take off.’1 Similarly, a UK graduate employer survey revealed that candidates are normally academically proficient, but lacking in so-called ‘soft skills’ such as team working, communicating effectively, leadership and cultural awareness. The employers claimed that developing these interpersonal skills is essential for managerial effectiveness.2 Recognition of the importance of developing managers’ interpersonal skills is closely tied to the need for organizations to get and keep high-performing employees. Regardless of labour market conditions, outstanding employees are always in short supply and the competition for talented employees is forecast to get even more fierce in most of Europe up to 2020 and beyond.3 Companies with reputations as good places to work – such as Admiral, NetApp, SAS Institute, Microsoft, Hilti, Cisco, Capital One, Torfs, Succeeding in management today requires good interpersonal skills, aptly demonstrated by Tim Cook. EMC2 and Quintiles4 – have a big advantage. A recent survey Few tougher assignments can be envisaged than of hundreds of workplaces, and more than 200,000 respondreplacing the legendary Steve Jobs at Apple. But that’s ents, showed the social relationships among co-workers and exactly what Tim Cook did. Originally derided as supervisors were strongly related to overall job satisfac‘wooden’ and ‘lacking charisma’, Cook led Apple so tion. Positive social relationships also were associated with strongly that he earned the No. 1 spot on Fortune’s lower stress at work and lower intentions to quit.5 Having list of the World’s Greatest Leaders in 2015. Cook managers with good interpersonal skills is likely to make believes in letting employees have freedom, listening attentively, humility, diversity and admitting mistakes. the workplace more pleasant, and research indicates that

What managers do   5

EMPLOYABILITY AND ORGANIZATIONAL BEHAVIOUR When Lucas was reflecting on his first corporate job after leaving university, he recalls, ‘As a finance graduate I thought my work day would be all about showing off my skills. It took me less than a week to find out I was very wrong. I was the least experienced and treated like it, I couldn’t seem to say anything sensible when my boss asked me questions, I didn’t know what to do in meetings and just stared at the e-mails “pinging” on my computer, not knowing how to respond, or even if I should respond.’ The issues Lucas faced are very common. There has been a concern for some time that university graduates are not adequately prepared for employment. According to a YouGov survey more than half of employers said all or almost all graduate recruits started work without crucial abilities such as team work, communication, time management and the ability to meet deadlines. A poll of the company leaders found that fewer than one in five businesses believe graduates are ready for work. The EU Parliamentary Research Service claims the EU faces a paradox: a high youth unemployment rate while there are around 2 million unfilled vacancies across Europe. The

implication being that the youths do not have the work skills required to be selected to fill the vacancies. Higher Education (HE) Authorities around Europe have put ­employability at the centre of their national HE strategies. Employability can be thought of as the ability to gain and maintain employment (meaning employability skills are relevant at the start and throughout an individual’s career). The proposition for graduates is that they are generally being taught the technical skills they require to enter the workforce, but the additional skills that they really need to perform, such as working with and contributing to a team, time management, making decisions, demonstrating leadership, positively contributing, communicating effectively, structuring their day, relating to colleagues and many more, are lacking. You have probably noticed that these are organizational behaviour issues! Understanding the subject is essential for employ­ ability no matter what the occupation. Because of this, each chapter will have an Employability AND feature demonstrating how an understanding of the chapter topic can enhance your employability.

employees who know how to relate to their managers well with supportive dialogue and proactivity will find their ideas are endorsed more often, further improving workplace satisfaction.6 Creating a pleasant workplace also appears to make good economic sense. Companies with reputations as good places to work have been found to generate superior financial performance.7 We have come to understand that in today’s competitive and demanding workplace, managers can’t succeed on their technical skills alone. They also have to have good people skills. This book has been written to help both managers and potential managers develop those people skills.

What managers do 2  Describe the manager’s functions, roles and skills. managers An individual who achieves goals through other people. organization A consciously coordinated social unit, composed of two or more people, that functions on a relatively continuous basis to achieve a common goal or set of goals.

Let’s begin by briefly defining the terms manager and organization – the place where managers work. Then let’s look at the manager’s job; specifically, what do managers do? Managers get things done through other people. They make decisions, allocate resources and direct the activities of others to attain goals. Managers do their work in an o ­ rganization, which is a consciously coordinated social unit, composed of two or more people, that functions on a relatively continuous basis to achieve a common goal or set of goals. On the basis of this definition, manufacturing and service firms are organizations, and so are schools, hospitals, churches, retail stores, police departments and government agencies. The people who oversee the activities of others and who are responsible for attaining goals in these organiz­ ations are managers (although they’re sometimes called administrators, especially in not-forprofit organizations).

Management functions In the early part of the twentieth century, a French industrialist by the name of Henri Fayol wrote that all managers perform five management functions: planning, organizing,

6  1 what is organizational behaviour?

planning A process that includes defining goals, establishing strategy and developing plans to coordinate activities. organizing Determining what tasks are to be done, who is to do them, how the tasks are to be grouped, who reports to whom and where decisions are to be made. leading A function that includes motivating employees, directing others, selecting the most effective communication channels and resolving conflicts. controlling Monitoring activities to ensure that they are being accomplished as planned and correcting any significant deviations.

commanding, coordinating and controlling.8 Today, we have condensed these to four: planning, organizing, leading and controlling. Because organizations exist to achieve goals, someone has to define those goals and the means for achieving them; management is that someone. The planning function encompasses defining an organization’s goals, establishing an overall strategy for achieving those goals, and developing a comprehensive set of plans to integrate and coordinate activities. Evidence indicates that this function is the one that increases the most as managers move from lower-level to mid-level management.9 Managers are also responsible for designing an organization’s structure. We call this function organizing. It includes determining what tasks are to be done, who is to do them, how the tasks are to be grouped, who reports to whom and where decisions are to be made. Every organization contains people, and it is management’s job to direct and coordinate those people. This is the leading function. When managers motivate employees, direct their activities, select the most effective communication channels, or resolve conflicts among members, they’re engaging in leading. To ensure things are going as they should, management must monitor the organization’s performance and compare it with previously set goals. If there are any significant deviations, it is management’s job to get the organization back on track. This monitoring, comparing and potential correcting is the controlling function. So, using the functional approach, the answer to the question ‘What do managers do?’ is that they plan, organize, lead and control.

Management roles In the late 1960s, Henry Mintzberg, then a graduate student at Massachusetts Institute of Technology, undertook a careful study of five executives to determine what those managers did on their jobs. On the basis of his observations, Mintzberg concluded that managers perform ten different, highly interrelated roles – or sets of behaviours.10 As shown in Table 1.1 these ten roles can be grouped as being primarily (1) interpersonal, (2) informational and (3) decisional.

Table 1.1  Mintzberg’s managerial roles Role Interpersonal Figurehead Leader Liaison Informational Monitor Disseminator Spokesperson Decisional Entrepreneur Disturbance handler Resource allocator Negotiator

Description Symbolic head; required to perform a number of routine duties of a legal or social nature Responsible for the motivation and direction of employees Maintains a network of outside contacts who provide favours and information Receives a wide variety of information; serves as nerve centre of internal and external information of the organization Transmits information received from outsiders or from other employees to members of the organization Transmits information to outsiders on organization’s plans, policies, actions and results; serves as expert on organization’s industry Searches organization and its environment for opportunities and initiates projects to bring about change Responsible for corrective action when organization faces important, unexpected disturbances Makes or approves significant organizational decisions Responsible for representing the organization at major negotiations

Source: Adapted from H. Mintzberg, The Nature of Managerial Work, 1st edn, © 1980, pp. 92–3. Reprinted with permission of Pearson Education, Inc., Upper Saddle River, NJ.

What managers do   7

Interpersonal roles All managers are required to perform duties that are ceremonial and symbolic in nature. For instance, when the Dean of a university hands out degrees at graduation or a factory supervisor gives a group of high school students a tour of the premises, he or she is acting in a figurehead role. All managers also have a leadership role. This role includes hiring, training, motivating and disciplining employees. The third role within the interpersonal grouping is the liaison role. Mintzberg described this activity as contacting outsiders who provide the manager with information. These may be individuals or groups inside or outside the organization. The sales manager who obtains information from the quality-control manager in their own company has an internal liaison relationship. When that sales manager has contacts with other sales executives through a marketing trade association, they have an outside liaison relationship.

Informational roles All managers, to some degree, collect information from outside organizations and institutions. Typically, they obtain it by reading magazines and talking with other people to learn of changes in the public’s tastes, what competitors may be planning and the like. Mintzberg called this the monitor role. Managers also act as a conduit to transmit information to organizational members. This is the disseminator role. In addition, managers perform a spokesperson role when they represent the organization to outsiders.

Decisional roles Mintzberg identified four roles that revolve around making choices. In the entrepreneur role, managers initiate and oversee new projects that will improve their organization’s performance. As disturbance handlers, managers take corrective action in response to unforeseen problems. As resource allocators, managers are responsible for allocating human, physical and monetary resources. Finally, managers perform a negotiator role, in which they discuss issues and bargain with other units to gain advantages for their own unit.

Management skills Still another way of considering what managers do is to look at the skills or competencies they need to achieve their goals. Researchers have identified a number of skills that differentiate effective from ineffective managers.11

Technical skills technical skills The ability to apply specialised knowledge or expertise.

Technical skills encompass the ability to apply specialized knowledge or expertise. When you

think of the skills of professionals such as civil engineers or oral surgeons, you typically focus on their technical skills. Through extensive formal education, they have learned the special knowledge and practices of their field. Of course, professionals don’t have a monopoly on technical skills, and not all technical skills have to be learned in schools or other formal training programmes. All jobs require some specialised expertise, and many people develop their technical skills on the job.

Human skills human skills The ability to work with, understand and motivate other people, both individually and in groups. conceptual skills The mental ability to analyse and diagnose complex situations.

The ability to understand, communicate with, motivate and support other people, both individually and in groups, defines human skills. Many people are technically proficient but poor listeners, unable to understand the needs of others, or weak at managing conflicts. Because managers get things done through other people, they must have good human skills.

Conceptual skills Managers must have the mental ability to analyse and diagnose complex situations. These tasks require conceptual skills. Decision making, for instance, requires managers to identify problems, develop alternative solutions to correct those problems, evaluate those alternative solutions and select the best one.

8  1 what is organizational behaviour?

After they have selected a course of action, managers must be able to organize a plan of action and then execute it. The ability to integrate new ideas with existing processes and innovate on the job are also crucial conceptual skills for today’s managers.

Effective versus successful managerial activities Fred Luthans and his associates looked at the issue of what managers do from a somewhat different perspective.12 They asked the question ‘Do managers who move up the quickest in an organization do the same activities and with the same emphasis as managers who do the best job?’ You would tend to think that the managers who are the most effective in their jobs would also be the ones who are promoted the fastest. But that’s not what appears to happen. Luthans and his associates studied more than 450 managers. What they found was that these managers all engaged in four managerial activities: 1. Traditional management. Decision making, planning and controlling 2. Communication. Exchanging routine information and processing paperwork 3. Human resource management. Motivating, disciplining, managing conflict, staffing and

training 4. Networking. Socialising, politicking and interacting with outsiders

The ‘average’ manager in the study spent 32 per cent of their time in traditional management activities, 29 per cent communicating, 20 per cent in human resource management activities and 19 per cent networking. However, the amount of time and effort that different managers spent on those four activities varied a great deal. Specifically, as shown in Figure 1.1, managers who were successful (defined in terms of the speed of promotion within their organization) had a very different emphasis from managers who were effective (defined in terms of the quantity and quality of their performance and the satisfaction and commitment of their employees). Among successful managers, networking made the largest relative contribution to success, and human resource management activities made the least relative contribution. Among effective managers, communication made the largest relative contribution and networking the least. More recent studies, conducted in a variety of countries (Australia, Israel, Italy, Japan and the United States), further confirm the link between networking and success within an organization.13 For example, one study found that Australian managers who actively networked received more promotions and enjoyed other rewards associated with career success. And the connection between communication and effective managers is also clear. A study of 410 US managers indicates that managers who seek information from colleagues and employees – even if it’s negative – and who explain their decisions are the most effective.14

Average managers

Successful managers

Effective managers 11%

13%

19% 32% 20%

48%

29%

28%

26% 44%

11%

Traditional management

Communication

Human resource management

Networking

Figure 1.1  Allocation of activities by time

19%

Complementing intuition with systematic study   9

This research offers important insights. Successful managers give almost the opposite emphases to traditional management, communication, human resource management and networking as do effective managers. This finding challenges the historical assumption that promotions are based on performance, and it illustrates the importance of networking and political skills in getting ahead in organizations.

A review of the manager’s job One common thread runs through the functions, roles, skills, activities and approaches to management: each recognizes the paramount importance of managing people. Regardless of whether it is called ‘the leading function’, ‘interpersonal roles’, ‘human skills’, or ‘human resource management, communication and networking activities’, it’s clear that managers need to develop their people skills if they’re going to be effective and successful.

Enter organizational behaviour 3 Define organizational behaviour (OB). organizational behaviour (OB) A field of study that investigates the impact that individuals, groups and structure have on behaviour within organizations, for the purpose of applying such knowledge towards improving an organization’s effectiveness.

We’ve made the case for the importance of people skills. But neither this book nor the discipline on which it is based is called ‘people skills’. The term that is widely used to describe the discipline is organizational behaviour. Organizational behaviour (often abbreviated OB) is a field of study that investigates the impact that individuals, groups and structure have on behaviour within organizations, for the purpose of applying such knowledge towards improving an organization’s effectiveness. That’s a mouthful, so let’s break it down. Organization behaviour is a field of study, meaning that it is a distinct area of expertise with a common body of knowledge. What does it study? It studies three determinants of behaviour in organizations: individuals, groups and structure. In addition, OB applies the knowledge gained about individuals, groups and the effect of structure on behaviour in order to make organizations work more effectively. To sum up our definition, OB is the study of what people do in an organization and how their behaviour affects the organization’s performance. And because OB is concerned specifically with employment-related situations, it emphasizes behaviour as related to concerns such as jobs, work, absenteeism, employment turnover, productivity, human performance and management. Although debate exists about the relative importance of each, OB includes the core topics: ●

Motivation

●

Leader behaviour and power

●

Interpersonal communication

●

Group structure and processes

●

Attitude development and perception

●

Change processes

●

Conflict and negotiation

●

Work design15

Complementing intuition with systematic study 4  Show the value to OB of systematic study.

Each of us is a student of behaviour. Since our earliest years, we’ve watched the actions of others and have attempted to interpret what we see. Whether or not you’ve explicitly thought about it before, you’ve been ‘reading’ people almost all your life. You watch what others do and try to explain to yourself why they have engaged in their behaviour. In addition, you’ve attempted to predict what they might do under different sets of conditions. Unfortunately, your

10  1 what is organizational behaviour?

systematic study Looking at relationships, attempting to attribute causes and effects and drawing conclusions based on scientific evidence. evidence-based management (EBM) Basing managerial decisions on the best available scientific evidence. intuition A gut feeling not necessarily supported by research.

casual or commonsense approach to reading others can often lead to erroneous ­predictions. However, you can improve your predictive ability by supplementing your intuitive opinions with a more systematic approach. The systematic approach used in this book will uncover important facts and relationships and will provide a base from which more accurate predictions of behaviour can be made. Underlying this systematic approach is the belief that behaviour is not random. Rather, there are certain fundamental consistencies underlying the behaviour of all individuals that can be identified and then modified to reflect individual differences. These fundamental consistencies are very important. Why? Because they allow predict­ ability. Behaviour is generally predictable, and the systematic study of behaviour is a means to making reasonably accurate predictions. When we use the phrase systematic study, we mean looking at relationships, attempting to attribute causes and effects, and basing our conclusions on scientific evidence – that is, on data gathered under controlled conditions and measured and interpreted in a reasonably rigorous manner. An approach that complements systematic study is evidence-based management. Evidencebased management (EBM) involves basing managerial decisions on the best available scientific evidence. We’d want doctors to make decisions about patient care based on the latest available evidence, and EBM argues that we want managers to do the same. That means managers must become more scientific in how they think about management problems. For example, a manager might pose a managerial question, search for the best available evidence and apply the relevant information to the question or case at hand. You might think it’s difficult to argue against this (what manager would argue that decisions shouldn’t be based on evidence?), but the vast majority of management decisions are still made spontaneously, with little or no systematic study of available evidence.16 Systematic study and EBM add to intuition, or those ‘gut feelings’ about what makes others (and ourselves) ‘tick’. Of course, the things you have come to believe in an unsystematic way are not necessarily incorrect. Jack Welch (former CEO of GE) noted, ‘The trick, of course, is to know when to go with your gut.’

‘Preconceived notions versus substantive evidence’ Assume that you signed up to take an introductory university course in finance. On the first day of class, your tutor asks you to take out a piece of paper and answer the following question: ‘What is the net present value at a discount rate of 12 per cent per year of an investment made by spending €1,000,000 this year on a portfolio of shares, with an initial dividend next year of €100,000 and an expected rate of dividend growth thereafter of 4 per cent per year?’ It’s unlikely you’d be able to answer that question without some instruction in finance. Now, change the scenario. You’re in an introductory course in organizational behaviour. On the first day of class, your tutor asks you to write the answer to the following question: ‘What’s the most effective way to motivate employees at work?’ At first you might feel a bit of reluctance, but once you began writing, you’d likely have no problem coming up with suggestions on motivation. That’s one of the main challenges of teaching, or taking, a course in OB. You enter an OB course with a lot of preconceived notions that you accept as facts. You think you already know a lot about human behaviour.17 That’s not typically true in finance, accounting or even marketing. So, in contrast to

MYTH OR SCIENCE?

many other disciplines, OB not only introduces you to a comprehensive set of concepts and theories; it has to deal with a lot of commonly accepted ‘facts’ about human behaviour and organizations that you’ve acquired over the years. Some examples might include: ‘You can’t teach an old dog new tricks’; ‘leaders are born, not made’ and ‘two heads are better than one’. But these ‘facts’ aren’t necessarily true. So one of the objectives of a course in organizational behaviour is to replace popularly held notions, often accepted without question, with science-based conclusions. As you’ll see in this book, the field of OB is built on decades of research. This research provides a body of substantive evidence that is able to replace preconceived notions. Throughout this book, we’ve included boxes titled ‘Myth or Science?’ They call your attention to some of the most popular of these notions or myths about organizational behaviour. We use the boxes to show how OB research has disproved them or, in some cases, shown them to be true. Hopefully, you’ll find these boxes interesting. But more importantly, they’ll help remind you that the study of human behaviour at work is a science and that you need to be vigilant about ‘off-the-top-ofyour-head’ explanations of work-related behaviours.

Complementing intuition with systematic study   11

But if we make all decisions with intuition or gut instinct, we’re likely working with incomplete information – like making an investment decision with only half the data about the potential for risk and reward. Relying on intuition is made worse because we tend to overestimate the accuracy of what we think we know. Surveys of human resource managers have also shown many managers hold ‘commonsense’ opinions regarding effective management that have been flatly refuted by empirical evidence. We find a similar problem when relying on business press and popular media for management wisdom. The business press tends to be dominated by fads. As one writer put it, ‘Every few years, new companies succeed, and they are scrutinised for the underlying truths they might reveal. But often there is no underlying truth; the companies just happened to be in the right place at the right time.’18 Although we try to avoid it, we might also fall into this trap. It’s not that the business press stories are all wrong; it’s that without a systematic approach, it’s hard to separate the wheat from the chaff.

Big data It is good news for the future of business that researchers, the media and company leaders have identified the potential of data-driven management and decision-making. While ‘big data’ – the extensive use of statistical compilation and analysis – has been applied to many areas of business, increasingly it is applied to making effective decisions (which we cover in Chapter 5) and managing human resources (covered in Chapter 17). Online retailers may have been the first to notice and act upon information on customer preferences newly available through the internet shopping experience, information far superior to data gathered in simple store transactions. This enabled online retailers to create more targeted marketing strategies than ever before. The bookselling industry is a case in point: before online selling, brick-and-mortar bookstores could collect data about book sales only to make their projections about consumer interests and trends. With the advent of Amazon, suddenly a vast array of information about consumer preferences became available for tracking: what customers bought, what they looked at, how they navigated the site and what they were influenced by (such as promotions, reviews and page presentation). The challenge for Amazon then was to identify which statistics were persistent, giving relatively constant outcomes over time, and predictive, showing steady causality between certain inputs and outcomes. The company used these statistics to develop algorithms that let it forecast which books customers would like to read next. Amazon then could base its wholesale purchase decisions on the feedback customers provided, both through these passive methods and through solicited recommendations for upcoming titles, by which Amazon could continuously perfect its algorithms. The success of Amazon has revolutionized bookselling – and even retail industries – and has served as a model for innovative online retailers. It also illustrates what big data can do for other businesses that can capitalize on the wealth of data available through virtually any internet connection, from Facebook posts to sensor readings to GPS signals from cell phones. Savvy businesses use big data to manage people as well as technology. A recent study of 330 companies found that the data-driven companies were 5 per cent more productive and 6 per cent more profitable than their competitors. These may seem like small percentage gains, but they represent a big impact on economic strength and measurable increases in stock market evaluations for these companies, which are in the top third of their industries.19 Another study of 8,000 firms in 20 countries confirms that constant measuring against targets for productivity and other criteria is a hallmark of well-run companies.20 The use of big data for managerial practices is a relatively new area but one that holds convincing promise. In dealing with people, leaders often rely on hunches and estimate the influence of information that they’ve heard most recently, that has been frequently repeated, or that is of personal relevance. Obviously, this is not always the best evidence because all managers (all people) have natural biases. A manager who uses data to define objectives, develop theories of causality and test those theories can find which employee activities are relevant to the objectives.21

12  1 what is organizational behaviour?

We’re not advising that you throw your intuition, or all the business press, out the window. Nor are we arguing that research is always right. Researchers make mistakes, too. What we are advising is to use evidence as much as possible to inform your intuition and experience. That is the promise of OB.

Disciplines that contribute to the OB field 5  Identify the major behavioural science disciplines that contribute to OB.

psychology The science that seeks to measure, explain and sometimes change the behaviour of humans and other animals.

Organizational behaviour is an applied behavioural science that is built on contributions from a number of behavioural disciplines. The predominant areas are psychology and social psychology, sociology and anthropology. As you shall learn, psychology’s contributions have been mainly at the individual or micro level of analysis, while the other disciplines have contributed to our understanding of macro concepts such as group processes and ­organization. Figure  1.2 is an overview of the major contributions to the study of organizational behaviour.

Psychology Psychology is the science that seeks to measure, explain and sometimes change the behaviour of humans and other animals. Psychologists concern themselves with studying and attempting to understand individual behaviour. Those who have contributed and continue to add to the Behavioural science

Psychology

Social psychology

Contribution Learning Motivation Personality Emotions Perception Training Leadership effectiveness Job satisfaction Individual decision making Performance appraisal Attitude measurement Employee selection Work design Work stress

Anthropology

Output

Individual

Behavioural change Attitude change Communication Group processes Group decision making Communication Power Conflict Intergroup behaviour

Sociology

Unit of analysis

Group

Formal organization theory Organizational technology Organizational change Organizational culture Comparative values Comparative attitudes Cross-cultural analysis Organizational culture Organizational environment Power

Figure 1.2  Towards an OB discipline

Organization system

Study of organizational behaviour

There are few absolutes in OB   13

knowledge of OB are learning theorists, personality theorists, counselling psychologists and, most important, industrial and organizational psychologists. Early industrial/organizational psychologists concerned themselves with the problems of fatigue, boredom and other factors relevant to working conditions that could impede efficient work performance. More recently, their contributions have been expanded to include learning, perception, personality, emotions, training, leadership effectiveness, needs and motivational forces, job satisfaction, decision-making processes, performance appraisals, attitude measurement, employee-selection techniques, work design and job stress.

Social psychology social psychology An area of psychology that blends concepts from psychology and sociology and that focuses on the influence of people on one another.

Social psychology blends concepts from both psychology and sociology, though it is generally considered a branch of psychology. It focuses on peoples’ influence on one another. One major area receiving considerable investigation from social psychologists has been change – how to implement it and how to reduce barriers to its acceptance. In addition, we find social psychologists making significant contributions in the areas of measuring, understanding and changing attitudes; communication patterns; and building trust. Finally, social psychologists have made important contributions to our study of group behaviour, power and conflict.

Sociology sociology The study of people in relation to their social environment or culture.

While psychology focuses on the individual, sociology studies people in relation to their social environment or culture. Sociologists have contributed to OB through their study of group behaviour in organizations, particularly formal and complex organizations. Perhaps most importantly, sociology has contributed to research on organizational culture, formal organization theory and structure, organizational technology, communications, power and conflict.

Anthropology anthropology The study of societies to learn about human beings and their activities.

Anthropology is the study of societies to learn about human beings and their activities. For instance, anthropologists’ work on cultures and environments has helped us understand differences in fundamental values, attitudes and behaviour between people in different countries and within different organizations. Much of our current understanding of organ­ izational culture, organizational environments and differences between national cultures is a result of the work of anthropologists or those using their methods.

There are few absolutes in OB 6  Demonstrate why few absolutes apply to OB.

contingency variables Situational factors: variables that moderate the relationship between two or more other variables.

There are laws in the physical sciences – chemistry, astronomy, physics – that are consistent and apply in a wide range of situations. They allow scientists to generalize about the pull of gravity or to be confident about sending astronauts into space to repair satellites. But as a noted behavioural researcher aptly concluded, ‘God gave all the easy problems to the physicists.’ Human beings are complex. Because we are not alike, our ability to make simple, accurate and sweeping generalizations is limited. Two people often act very differently in the same situation, and the same person’s behaviour changes in different situations. For instance, not everyone is motivated by money, and you are not likely to behave the same way in classes on Monday as you did at a party the night before. That doesn’t mean, of course, that we can’t offer reasonably accurate explanations of human behaviour or make valid predictions. However, it does mean that OB concepts must reflect situational, or contingency, conditions. We can say that x leads to y, but only under conditions specified in z – the contingency variables. The science of OB was developed by applying general concepts to a particular situation, person or group. For example, OB scholars would avoid stating that everyone likes complex and challenging work (the

14  1 what is organizational behaviour?

general concept). Why? Because not everyone wants a challenging job. Some people prefer the routine over the varied or the simple over the complex. In other words, a job that is appealing to one person may not be to another, so the appeal of the job is contingent on the person who holds it. As you proceed through this book, you’ll encounter a wealth of research-based theories about how people behave in organizations. But don’t expect to find a lot of straightforward cause-and-effect relationships. There aren’t many! Organizational behaviour theories mirror the subject matter with which they deal, and people are complex and complicated.

Challenges and opportunities for OB 7  Identify the challenges and opportunities managers have in applying OB concepts.

Understanding organizational behaviour has never been more important for managers than it is today. A quick look at a few of the dramatic changes now taking place in ­organizations supports this claim. For instance, the typical employee is getting older; more and more women are in the workplace; corporate downsizing and the heavy use of temporary workers are severing the bonds of loyalty that historically tied many employees to their employers; and global competition is requiring employees to become more flexible and to learn to cope with rapid change. The recent global recession has brought to the forefront the challenges of working with and managing people during uncertain times. As a result of these changes and others such as the rising use of technology, employment options have adapted to include new opportunities for workers. Figure 1.3 details some of the types of options individuals may find offered to them by organizations or for which they would like to negotiate. Under each heading in the exhibit, you will find a grouping of options from which to choose – or combine. For instance, at one point in your career you may find yourself employed full-time in an office in a localized, nonunion setting with a salary and bonus compensation package, while at another point you may wish to negotiate for a flexitime, virtual position and choose to work from overseas for a combination of salary and extra paid time off. In short, today’s challenges bring opportunities for managers to use OB concepts. In this section, we review some of the most critical issues confronting managers for which OB offers solutions – or at least meaningful insights towards solutions.

Responding to economic pressures When the US economy plunged into a deep and prolonged recession in 2008, virtually all other large economies around the world followed suit. Layoffs and job losses were widespread, and those who survived the axe were often asked to accept pay cuts. When times are bad, managers are on the front lines with employees who must be fired, who are asked to make do with less and who worry about their futures. The difference between good and bad management can be the difference between profit and loss or, ultimately, between survival and failure. Managing employees well when times are tough is just as hard as when times are good – if not more so. But the OB approaches sometimes differ. In good times, understanding how to reward, satisfy and retain employees is at a premium. In bad times, issues like stress, decision making and coping come to the fore.

Responding to globalization Organizations are no longer constrained by national borders. The quintessentially British Rolls-Royce cars are owned by the German firm BMW. The famous Dutch brewing company Heineken owns over 100 breweries in more than 60 countries. ExxonMobil, an American company, receives almost 75 per cent of its revenues from sales outside the United States.

Challenges and opportunities for OB   15

Figure 1.3  Employment options Categories of employment

Types of employment

Places of employment

Conditions of employment

Compensation for employment

Employed

Full-time

Anchored (office/cubicle)

Local

Salary

Underemployed/ underutilized

Part-time

Floating (shared space)

Expatriate

Hourly

Re-employed

Flexitime

Virtual

Short-term assignee

Overtime

Unemployed/jobless

Job share

Flexible

Flexpatriate

Bonus

Entrepreneur

Contingent

Work from home

International business traveler

Contract

Retired

Independent contractor

Visa employee

Time off

Job seeking

Temporary

Union/nonunion employee

Benefits

Furloughed

Reduced hours

Laid off

Intern

Employed – working for a for-profit or nonprofit company, organization, or for an individual, either for money and/or benefits, with established expectations for performance and compensation Underemployed/underutilized – working in a position or with responsibilities that are below one’s educational or experience attainment level, or working less than full-time when one wants full-time employment Re-employed – refers to either employees who were dismissed by a company and rehired by the same company, or to employees who left the workforce (were unemployed) and found new employment Unemployed/jobless – currently not working; may be job seeking, either with or without government benefits/assistance, either with or without severance pay from previous job, either new to the workforce or terminated from previous employment, either short-term unemployed (months) or long-term/chronic unemployed (years) Entrepreneur – one who runs his or her own business, either as a sole worker or as the founder of a company with employees Retired – one who has ended his or her career in a profession, either voluntarily by choice or involuntarily by an employer’s mandate Job seeking – currently unemployed; actively looking for a job, either with or without government benefits from previous job or from disability/need, either with or without severance pay from previous job, either new to the workforce or terminated from previous employment Furloughed—similar to a layoff; an employer-required work stoppage, temporary (weeks up to a month, usually); pay is often suspended during this time, though the person retains employment status with the company Laid off – can be a temporary employer-required work stoppage, usually without pay, but is more often a permanent termination from the company in which the employee is recognized to be not at fault Full-time – hours for full-time employment are established by companies, generally more than 30 hours per week in a set schedule, sometimes with salary pay and sometimes with hourly pay, often with a benefit package greater than that for the part-time employment category Part-time – hours for full-time employment are established by companies, generally less than 30 hours per week in a set schedule, often with hourly pay, often with a benefit package less than that for the full-time employment category Flexitime – an arrangement where the employee and employer create nonstandard working hours, which may be a temporary or permanent schedule; may be an expectation for a number of hours worked per week Job share – an arrangement where two or more employees fill one job, generally by splitting the hours of a full-time position that do not overlap Contingent – the workforce of outsourced workers (including professional service firms, specialized experts and business consultants), these employees are paid hourly or by the job and do not generally receive any company benefits and are not considered as part of the company; contingent workers may be also temporary employees or independent contractors Independent contractor – an entrepreneur in essence, but often a specialist professional who does not aspire to create a business but who provides services or goods to a company Temporary – individuals who may be employed directly by the organization or through an employment agency/temporary agency; their hours may be fixed per week or vary, they do not generally receive any company benefits and are not considered as part of the company; they are employed either for a short duration or as a trial for an organization’s position openings Reduced-hours – reduction in the normal employee’s work schedule by the employer, sometimes as a measure to retain employees/reduce layoffs in economic downturns as in Germany’s Kurzarbeit programme, which provides government subsidies to keep workers on the job at reduced hours; employees are only paid for the time they work Intern – short-term employment, often with an established term, designed to provide practical training to a pre-professional, either with or without pay Anchored – an employee with an assigned office, cubicle, or desk space Floating – an employee with a shared space workplace and no assigned working area Virtual – an employee who works through the internet and is not connected with any office location Flexible – an employee who is connected with an office location but may work from anywhere Work from home – an employee who is set up by the company to work from an office at home Local – employees who work in one established location Expatriate – employees who are on extended international work assignments with the expectation that they will return (repatriate) after an established term, usually a year or more; either sent by corporate request or out of self-initiated interest Short-term assignee – employees on international assignments longer than business trips yet shorter than typical corporate expatriate assignments, usually 3 to 12 months Flexpatriate – employees who travel for brief assignments across cultural or national borders, usually 1 to 2 months International business traveller – employees who take multiple short international business trips for 1 to 3 weeks Visa employee – an employee working outside of his or her country of residence who must have a work visa for employment in the current country (continued)

16  1 what is organizational behaviour? Union/nonunion employee – an employee who is a member of a labour union, often by trade, and subject to its protections and provisions, which then negotiates with management on ­certain working condition issues, or an employee who works for a nonunion facility or who sometimes elects to stay out of membership in a unionized facility Salary – employee compensation based on a full-time workweek, where the hours are generally not kept on a time clock but where it is understood that the employee will work according to job needs Hourly – employee compensation for each hour worked, often recorded on time sheets or by time clocks Overtime – for hourly employees, compensation for hours worked that are greater than the standard workweek and paid at an hourly rate determined by law Bonus – compensation in addition to standard pay, usually linked to individual or organizational performance Contract – prenegotiated compensation for project work, usually according to a schedule as the work progresses Time off – either paid or unpaid; negotiated time off according to the employment contract (including vacation time, sick leave and personal days) and/or given by management as compensation for time worked Benefits – generally stated in the employment contract or the Human Resources Employee Handbook; potentially include health insurance plans, savings plans, retirement plans, discounts and other options available to employees at various types of employment

Figure 1.3  Employment options (continued) Sources: J. R. Anderson Jr, et al., ‘Action items: 42 trends affecting benefits, compensation, training, staffing and technology’, HR Magazine, January 2013, p. 33; M. Dewhurst, B. Hancock and D. Ellsworth, ‘Redesigning knowledge work’, Harvard Business Review, January–February 2013, pp. 58–64; E. Frauenheim, ‘Creating a new contingent culture’, Workforce Management, August 2012, pp. 34–9; N. Koeppen, ‘State job aid takes pressure off Germany’, Wall Street Journal, 1 February 2013, p. A8; and M. A. Shaffer, M. L. Kraimer, Y.-P. Chen and M. C. Bolino, ‘Choices, challenges, and career consequences of global work experiences: a review and future agenda’, Journal of Management, July 2012, pp. 1282–1327.

And all major automobile manufacturers now build cars outside their borders; for instance, Honda builds cars in the US, Ford in Brazil, Volkswagen in Mexico, Toyota in England and both Mercedes and BMW in South Africa. These examples illustrate that the world has become a global village. In the process, the manager’s job is changing.

Increased foreign assignments

Christian Mueller / Shutterstock

If you’re a manager, you are increasingly likely to find yourself in a foreign assignment – ­transferred to your employer’s operating division or subsidiary in another country. Once there, you’ll have to manage a workforce that is likely to be very different in needs, aspirations and attitudes from those you are used to back home.

Although the history of the Adidas Group can be traced back to the early 1920s, it began in earnest in the late 1940s, when Adi Dassler registered the ‘Adi Dassler adidas Sportschuhfabrik’ and set to work with 47 employees in the small town of Herzogenaurach, Germany (where the company is still headquartered). Today the company employs around 50,000 people in over 160 countries, produces more than 650 million product units every year, generates sales of about €14.5 billion and has more than 2,500 wholly owned stores worldwide, such as the London store shown here. Adidas is truly a global organization. Source: http://www.adidas-group.com/en/group/history/

Challenges and opportunities for OB   17

Working with people from different cultures Even in your own country, you’re going to find yourself working with bosses, peers and other employees who were born and raised in different cultures. What motivates you may not motivate them. Or your style of communication may be straightforward and open, but they may find this approach uncomfortable and threatening. To work effectively with people from different cultures, you need to understand how their culture, geography and religion have shaped them and how to adapt your management style to their differences.

Overseeing movement of jobs to countries with low-cost labour It’s increasingly difficult for managers in advanced nations, where minimum wages are typically €10 or more an hour, to compete against firms who rely on workers from China and other developing nations where labour is available for about 50 cents an hour. It’s not by chance that a good portion of Europeans wear clothes made in China and work on computers whose microchips came from Taiwan. Further, in the European Union cost differentials have meant a migration of jobs from West to East. In Germany, hourly labour compensation costs are about €36, compared with some €10 in the Czech Republic and €8 in Poland.22 In a global economy, jobs tend to flow to places where lower costs provide business firms with a comparative advantage. Such practices, however, are often strongly criticized by trade unions, politicians, local community leaders and others who see this exporting of jobs as undermining the job markets in developed countries. Managers must deal with the difficult task of balancing the interests of their organization with their responsibilities to the communities in which they operate.

Adapting to differing cultural and regulatory norms

AP/ Press Association Images

‘Going global’ for a business is not as simple as typing in an overseas email address, shipping goods off to a foreign port, or building facilities in other countries. To be successful, managers need to know the cultural practices of the workforce in each country where they do business.

In the global economy, jobs tend to shift from developed nations to countries where lower labour costs give firms a comparative advantage. China’s low cost manufacturing has transformed the country and the world economy with it. In 1990, it produced less than 3 per cent of global manufacturing output by value; its share now is nearly a quarter. China produces about 80 per cent of the world’s airconditioners, 70 per cent of its mobile phones and 60 per cent of its shoes. Source: ‘Made in China? Asia’s dominance in manufacturing will endure. That will make development harder for others’, The Economist, 14 March 2015.

18  1 what is organizational behaviour?

For instance, in some countries a large percentage of the workforce enjoys long holidays. There will be country and local regulations to consider, too. Managers of subsidiaries abroad need to be aware of the unique financial and legal regulations applying to ‘guest companies’ or else risk violating them, which can have economic and even political consequences. Such violations can have implications for their operations in that country and also for political relations between countries. Additionally, managers need to be cognizant of differences in regulations for their competitors in that country; often, the laws will give national companies significant financial advantages over foreign subsidiaries.

Managing workforce diversity

workforce diversity The concept that organizations are becoming more heterogeneous in terms of gender, age, race, ethnicity, sexual orientation and inclusion of other diverse groups.

One of the most important challenges for organizations is workforce diversity, the concept that organizations are becoming more heterogeneous in terms of gender, age, race, ethnicity, sexual orientation and inclusion of other diverse groups. Whereas globalization focuses on differences among people from different countries, workforce diversity addresses differences among people within given countries. Workforce diversity acknowledges a workforce of women and men, many racial and ethnic groups, individuals with a variety of physical or psychological abilities and people who differ in age and sexual orientation. Managing this diversity is a global concern. For example, many European countries have experienced dramatic growth in immigration. Argentina and Venezuela host a significant number of migrants from other South American countries, and nations from India to Iraq to Indonesia find great cultural diversity within their borders. In Europe, since the foundation of the European Union (EU) in 1957, it has been enlarged five times to create a membership of 28 states around 60 years later. The EU guarantees the freedom of movement of people between the states. The effect has been to create considerably more diverse workforces in EU member countries in terms of nationalities, cultures, languages and religions. Though we have more to say about workforce diversity in the next chapter, suffice it to say here that it presents great opportunities and poses challenging questions for managers and employees in all countries. How can we leverage differences within groups for competitive advantage? Should we treat all employees alike? Should we recognize individual and cultural differences? How can we foster cultural awareness in employees without lapsing into political correctness? What are the legal requirements in each country? Does diversity even matter?

Improving customer service Today, the majority of employees in developed countries work in service jobs. For instance, in the United Kingdom, Germany and Japan, the percentages working in service industries are around 81, 68 and 65, respectively. Service employees include technical support representatives, fastfood counter workers, sales clerks, nurses, automobile repair technicians, consultants, financial ­planners and flight attendants. The shared characteristic of their jobs is substantial interaction with an organization’s customers. OB can help managers increase the success of these interactions by showing how employee attitudes and behaviour influence customer satisfaction.

FACE THE FACTS

Demographic ageing

than in 2010, yet the working-age population will decline by 42 million over the same period.

Demographic ageing is one of the main challenges facing Europe in the coming years. ●

By 2020, a quarter of Europeans will be over 60 years of age. Combined with low birth rates, this will bring about significant changes to the structure of European society which will impact the economy, the labour market, health care systems and many other aspects of life.

●

According to the latest projections, by 2060 the EU population will be 517 million, i.e. only about 16 million higher

●

Children born in the EU after 2011 have a one-in-three chance of reaching their 100th birthday.

Source: Based on European Commission (2014) Population Ageing in Europe: Facts, implications and policies

Challenges and opportunities for OB   19

Many an organization has failed because its employees failed to please customers. Management needs to create a customer-responsive culture. OB can provide considerable guidance in helping managers create such cultures – in which employees are friendly and courteous, accessible, knowledgeable, prompt in responding to customer needs and willing to do what’s necessary to please the customer.23

Improving people skills We opened this chapter by demonstrating how important people skills are to managerial effectiveness. We said that ‘this book has been written to help both managers and potential managers develop those people skills’. As you proceed through the chapters, we’ll present relevant concepts and theories that can help you explain and predict the behaviour of people at work. In addition, you’ll gain insights into specific people skills that you can use on the job. For instance, you’ll learn ways to design motivating jobs, techniques for improving your listening skills and how to create more effective teams.

Working in networked organizations Networked organizations allow people to communicate and work together even though they may be thousands of miles apart. Independent contractors can telecommute via computer to workplaces around the globe and change employers as the demand for their services changes. Software programmers, graphic designers, systems analysts, technical writers, photo researchers, book and media editors, and medical transcribers are just a few examples of people who can work from home or other non-office locations. The manager’s job is different in a networked organization. Motivating and leading people and making collaborative decisions online requires different techniques than when individuals are physically present in a single location. As more employees do their jobs by linking to others through networks, managers must develop new skills. OB can provide valuable insights to help with honing those skills.

Enhancing employee well-being at work The typical employee in the 1960s or 1970s showed up at a specified workplace Monday through Friday and worked for clearly defined 8- or 9-hour chunks of time. That’s no longer true for a large segment of today’s workforce. Employees are increasingly complaining that the line between work and nonwork time has become blurred, creating personal conflicts and stress. At the same time, today’s workplace presents opportunities for workers to create and structure their own roles. And even if employees work at home or from half a continent away, managers need to consider their well-being at work. One of the biggest challenges to maintaining employee well-being is the new reality that many workers never get away from the virtual workplace. Communication technology allows many technical and professional employees to do their work at home, in their cars, or on the beach in Dubai – but it also means many feel like they never really get a break. Another challenge is that organizations are asking employees to put in longer hours. According to a recent study, one in four employees show signs of burnout, partially as a result of longer work hours, and two in three report high stress levels and fatigue.24 This may actually be an underestimate because workers report maintaining ‘always on’ access for their managers through email and texting. Finally, employee well-being is challenged by heavy outside commitments. Millions of single-parent households and employees with dependent parents have even more significant challenges in balancing work and family responsibilities, for instance. As a result of their increased responsibilities in and out of the workplace, employees want more time off. Recent studies suggest employees want jobs that give them flexibility in their work schedules so they can better manage work–life conflicts.25 In fact, 56 per cent of men and women in a recent study reported that work–life balance was their definition of career success, more than money, recognition and autonomy.26 Most college and university students say attaining a balance between personal life and work is a primary career goal; they want a life as well as a job. Organizations that don’t help their people achieve work–life balance will find it increasingly difficult to attract and retain the most capable and motivated employees.

20  1 what is organizational behaviour?

As you’ll see in later chapters, the field of OB offers a number of suggestions to guide managers in designing workplaces and jobs that can help employees deal with work–life conflicts.

Creating a positive work environment

positive organizational scholarship An area of OB research that concerns how organizations develop human strength, foster vitality and resilience, and unlock potential.

Although competitive pressures on most organizations are stronger than ever, some organiz­ ations are trying to realize a competitive advantage by fostering a positive work environment. Sometimes they do this by creating pleasing physical environments with attractive modern work­ stations, workplace ‘perks’ such as Google’s free lunches, or a shared commitment to environ­ mental sustainability initiatives such as recycling.27 But, more often, employees perceive a work environment as positive or negative in terms of their work experiences with other employees, rather than in the quality of its physical surroundings. Jeff Immelt and Jim McNerney have tried to maintain high-performance expectations while fostering a positive work environment in their organizations (GE and Boeing, respectively). ‘In this time of turmoil and cynicism about business, you need to be passionate, positive leaders,’ Immelt has told his top managers. A real growth area in OB research is positive organizational scholarship (also called positive organizational behaviour), which studies how organizations develop human strengths, foster vitality and resilience, and unlock potential. Researchers in this area say too much of OB research and manage­ ment practice has been targeted towards identifying what’s wrong with organizations and their employees. In response, they try to study what’s good about them.28 Some key independent vari­ ables in positive OB research are engagement, hope, optimism and resilience in the face of strain. Positive organizational scholars have studied a concept called ‘reflected best-self’ – asking employees to think about when they were at their ‘personal best’ in order to understand how to exploit their strengths. The idea is that we all have things at which we are unusually good, yet too often we focus on addressing our limitations and too rarely think about how to exploit our strengths.29 Although positive organizational scholarship does not deny the value of the negative (such as critical feedback), it does challenge researchers to look at OB through a new lens and pushes organizations to exploit employees’ strengths rather than dwell on their limitations.

OB IN THE NEWS

Richard Branson tells staff – take as much holiday as you like by Claer Barrett Sir Richard Branson, the billionaire founder of Virgin Group, has told 170 staff working for its head office that they can take as much annual leave as they like, providing it will not damage the business. ‘Flexible working has revolutionised how, where and when we all do our jobs,’ Sir Richard said on his website. ‘So if working nine to five no longer applies, then why should strict annual leave (vacation) policies?’ Sir Richard said he was inspired by Netflix, the US-based video streaming service which has a similar policy on not tracking staff holidays. The company reported that staff morale, creativity and productivity had all risen since the ‘non policy’ was introduced.

The blurring of the boundaries between work life and home life caused by advances in mobile technology meant that companies were ‘no longer able to accurately track employees’ total time on the job’, Sir Richard said, adding that there was no need for his staff to ask for prior approval before taking time off. ‘It is left to the employee alone to decide if and when he or she feels like taking a few hours, a day, a week or a month off, the assumption being that they are only going to do it when they feel 100 per cent comfortable that they and their team are up to date on every project and that their absence will not in any way damage the business – or, for that matter, their careers,’ he added.

Source: Claer Barrett, ‘Richard Branson tells staff: take as much holiday as you like’, Financial Times, 25 September 2014. © The Financial Times Limited. All Rights Reserved.

Challenges and opportunities for OB   21

Improving ethical behaviour

ethical dilemmas and ethical choices Situations in which individuals are required to define right and wrong conduct.

In an organizational world characterized by cutbacks, expectations of increasing worker productivity and tough competition in the marketplace, it’s not altogether surprising that many employees feel pressured to cut corners, break rules and engage in other forms of questionable practices. Members of organizations are increasingly finding themselves facing ethical dilemmas and ethical choices, in which they are required to define right and wrong conduct. For example, should they ‘blow the whistle’ if they uncover illegal activities taking place in their company? Should they follow orders with which they don’t personally agree? Do they give an inflated performance evaluation to an employee whom they like, knowing that such an evaluation could save that employee’s job? Do they allow themselves to ‘play politics’ in the organization if it will help their career advancement? What constitutes good ethical behaviour has never been clearly defined and, in recent years, the line differentiating right from wrong has become even more blurred. Employees see people all around them engaging in unethical practices – elected officials are accused of taking bribes; corporate executives inflate company profits so they can cash in lucrative share options; and managers ‘looking the other way’ when their sales team mislead customers to win orders. When caught, these people give excuses such as ‘everyone does it’ or ‘you have to seize every advantage nowadays’. Determining the ethically correct way to behave is especially difficult in a global economy because different cultures have different perspectives on certain ethical issues.30 Fair treatment of employees in an economic downturn varies considerably across cultures, for instance. Perceptions of religious, ethnic and gender diversity differ across countries (as we’ll see in Chapter 2). Is it any wonder employees are expressing decreased confidence in management and increasing uncertainty about what is appropriate ethical behaviour in their organizations?31

Does national culture affect organizational practices? Companies that operate in more than one country face a challenging dilemma: how much should they tailor organizational practices like leadership style, rewards and communication to each country’s culture? To some extent, it is necessary to change the way a company does business because of differences in regulations, institutions and labour force characteristics. For example, a US company that operates in Germany will have to contend with laws requiring greater worker participation in decision making, and an Australian company operating in China will have to match the knowledge and skills found in the Chinese workforce. Despite certain limitations imposed by law and situational factors, managers still need to make many decisions about adjusting their organizational culture to match the culture of the countries in which they operate. There are no simple responses to this dilemma. Some researchers propose that managers need to make a concerted effort to adapt their organizational culture to match the culture of the countries in which they operate. These authors note that within any country, there is a great deal of similarity in management practices that is likely the result of culture or values. If a country’s basic outlook is highly individualistic, then organizational culture should also emphasize individual contributions and efforts. Conversely, if national culture values collectivism, then organizational culture should emphasize

glOBal

group contributions and cohesiveness. From this perspective, successful international management is all about tailoring management practices and values to fit with the cultural values of each country in which the company operates. On the other hand, some propose that national culture should not, and does not, make much difference in shaping organizational culture. These researchers note that even within a single country, there can be a great deal of variation in values and norms. The development of practices to match a culture is fraught with problems of stereotyping and overgeneralizing about the degree to which everyone in a given country shares the same values. These authors also note that in tailoring practices to each country, a firm loses the potential value of having a unifying organizational culture. From this perspective, companies should try as much as possible to create a strong culture that operates across borders to create a unified global workforce. Sources: Based on B. Gerhart, ‘How much does national culture constrain organizational culture?’, Management and Organization Review, 5, 2 (2009), pp. 241–59; A. S. Tsui, S. S. Nifadkar and A. Y. Ou, ‘Cross-national, cross-­cultural organizational behavior research: Advances, gaps, and recommendations,’ Journal of Management, 33, 3 (2007), pp. 426–78; G. Johns, ‘The essential impact of context on organizational behavior’, Academy of Management Review, 31, 2 (2006), pp. 386–408.

22  1 what is organizational behaviour?

Managers and their organizations are responding to this problem from a number of directions.32 They’re writing and distributing codes of ethics to guide employees through ethical dilemmas. They’re offering seminars, workshops and other training programmes to try to improve ethical behaviours. They’re providing in-house advisers who can be contacted, in many cases anonymously, for assistance in dealing with ethical issues, and they’re creating protection mechanisms for employees who reveal internal unethical practices. Today’s manager must create an ethically healthy climate for his or her employees, where they can do their work productively with minimal ambiguity about right versus wrong behaviours. Companies that promote a strong ethical mission, encourage employees to behave with integrity and provide strong leadership can influence employee decisions to behave ethically. In upcoming chapters, we’ll discuss the actions managers can take to create an ethically healthy climate and help employees sort through ambiguous situations. We’ll also present ethical-­ dilemma exercises at the end of each chapter that allow you to think through ethical issues and assess how you would handle them.

Coming attractions: developing an OB model Compare the three levels of analysis in this book’s OB model.

We conclude this chapter by presenting a general model that defines the field of OB, stakes out its parameters, and identifies inputs, processes and outcomes. The result will be ‘coming attractions’ of the topics in the remainder of this book.

An overview model An abstraction of reality. A simplified representation of some real-world phenomenon.

A model is an abstraction of reality, a simplified representation of some real-world phenomenon. Figure 1.4 presents the skeleton on which we will construct our OB model. It proposes three types of variables (inputs, processes and outcomes) at three levels of analysis (individual, group and organizational). The model proceeds from left to right, with inputs leading to processes and processes leading to outcomes. Notice that the model also shows that outcomes can influence inputs in the future.

Inputs

Processes

Outcomes

Individual level • Diversity • Personality • Values

Individual level • Emotions and moods • Motivation • Perception • Decision making

Individual level • Attitudes and stress • Task performance • Citizenship behaviour • Withdrawal behaviour

Group level • Group structure • Group roles • Team responsibilities

Group level • Communication • Leadership • Power and politics • Conflict and negotiation

Group level • Group cohesion • Group functioning

Organizational level • Structure • Culture

Organizational level • Human resource management • Change practices

Organizational level • Productivity • Survival

Figure 1.4  A basic OB model

Coming attractions: developing an OB model   23

Inputs input Variables that lead to processes.

Inputs are the variables like personality, group structure and organizational culture that lead

to processes. These variables set the stage for what will occur in an organization later. Many are determined in advance of the employment relationship. For example, individual diversity characteristics, personality and values are shaped by a combination of an individual’s genetic inheritance and childhood environment. Group structure, roles and team responsibilities are typically assigned immediately before or after a group is formed. Finally, organizational structure and culture are usually the result of years of development and change as the organiz­ation adapts to its environment and builds up customs and norms.

Processes processes Actions that individuals, groups and organizations engage in as a result of inputs and that lead to certain outcomes.

If inputs are like the nouns in organizational behaviour, processes are like verbs. Processes are actions that individuals, groups and organizations engage in as a result of inputs and that lead to certain outcomes. At the individual level, processes include emotions and moods, motivation, perception and decision making. At the group level, they include communication, leadership, power and politics, and conflict and negotiation. Finally, at the organizational level, processes include human resource management and change practices.

Outcomes outcomes Key factors that are affected by some other variables.

Outcomes are the key variables that you want to explain or predict, and that are affected

by some other variables. What are the primary outcomes in OB? Scholars have emphasized individual-level outcomes like attitudes and satisfaction, task performance, citizenship ­ ­behaviour and withdrawal behaviour. At the group level, cohesion and functioning are the dependent variables. Finally, at the organizational level we look at overall profitability and survival. Because these outcomes will be covered in all the chapters, we’ll briefly discuss each here so you can understand what the ‘goal’ of OB will be.

Attitudes and stress attitudes Evaluations employees make about objects, people, or events. stress An unpleasant psychological process that occurs in response to environmental pressures.

Employee attitudes are the evaluations employees make, ranging from positive to negative, about objects, people or events. For example, the statement ‘I really think my job is great’ is a positive job attitude, and ‘My job is boring and tedious’ is a negative job attitude. Stress is an unpleasant psychological process that occurs in response to environmental pressures. Some people might think that influencing employee attitudes and stress is purely soft stuff, and not the business of serious managers, but as we will show, attitudes often have behavioural consequences that directly relate to organizational effectiveness. The belief that satisfied employees are more productive than dissatisfied employees has been a basic tenet among managers for years, though only now has research begun to support it. Ample evidence shows that employees who are more satisfied and treated fairly are more willing to engage in the above-and-beyond citizenship behaviour so vital in the contemporary business environment.

Task performance task performance The combination of effectiveness and efficiency at doing your core job tasks.

The combination of effectiveness and efficiency at doing your core job tasks is a reflection of your level of task performance. If we think about the job of a factory worker, task performance could be measured by the number and quality of products produced in an hour. The task performance of a teacher would be the level of education that students obtain. The task performance of a consultant might be measured by the timeliness and quality of the ­presentations they offer to the client firm. All these types of performance relate to the core duties and responsibilities of a job and are often directly related to the functions listed on a formal job description. Obviously task performance is the most important human output contributing to organizational effectiveness, so in every chapter we devote considerable time to detailing how task performance is affected by the topic in question.

24  1 what is organizational behaviour?

Citizenship behaviour citizenship behaviour Discretionary behaviour that contributes to the psychological and social environment of the workplace.

The discretionary behaviour that is not part of an employee’s formal job requirements, and that contributes to the psychological and social environment of the workplace, is called citizenship behaviour. Successful organizations need employees who will do more than their usual job duties – who will provide performance beyond expectations. In today’s dynamic workplace, where tasks are increasingly performed by teams and flexibility is critical, employees who engage in ‘good citizenship’ behaviours help others on their team, volunteer for extra work, avoid unnecessary conflicts, respect the spirit as well as the letter of rules and regulations, and gracefully tolerate occasional work-related impositions and nuisances. Organizations want and need employees who will do things that aren’t in any job description. Evidence indicates organizations that have such employees outperform those that don’t. As a result, OB is concerned with citizenship behaviour as an outcome variable.

Withdrawal behaviour withdrawal behaviour The set of actions employees take to separate themselves from the organization.

We’ve already mentioned behaviour that goes above and beyond task requirements, but what about behaviour that in some way is below task requirements? Withdrawal behaviour is the set of actions that employees take to separate themselves from the organization. There are many forms of withdrawal, ranging from showing up late or failing to attend meetings to absenteeism and turnover. Employee withdrawal can have a very negative effect on an organization. The cost of employee turnover alone has been estimated to run into the thousands of euros, even for entrylevel positions. Absenteeism also costs organizations significant amounts of money and time every year. A recent survey by PwC revealed the average cost of absence to United Kingdom employers was just over €1,000 per employee per year.33 The Confederation for British Industry (CBI) believes that absenteeism levels are the main reason why United Kingdom productivity lags behind the United States and some parts of Europe.34 Across Europe, as well as the United Kingdom, absence is particularly high in the Netherlands, Sweden, Norway and Iceland. It’s obviously difficult for an organization to operate smoothly and attain its objectives if employees fail to report to their jobs. The work flow is disrupted and important decisions may be delayed. In organizations that rely heavily on assembly-line production, absenteeism can be considerably more than a disruption; it can drastically reduce the quality of output or even shut down the facility. Levels of absenteeism beyond the normal range have a direct impact on any organization’s effectiveness and efficiency. A high rate of turnover can also disrupt the efficient running of an organization when knowledgeable and experienced personnel leave and replacements must be found to assume positions of responsibility. All organizations, of course, have some turnover. If the ‘right’ people are leaving the ­organization – the marginal and submarginal employees – turnover can actually be positive. It can create an opportunity to replace an underperforming individual with someone who has higher skills or motivation, open up increased opportunities for promotions and bring new and fresh ideas to the organization.35 In today’s changing world of work, reasonable levels of employee-initiated turnover improve organizational flexibility and employee independence, and they can lessen the need for management-initiated layoffs. So why do employees withdraw from work? As we will show later in the book, reasons include negative job attitudes, emotions and moods, and negative interactions with co-workers and supervisors.

Group cohesion group cohesion The extent to which members of a group support and validate one another while at work.

Although many outcomes in our model can be conceptualised as individual level phenomena, some relate to how groups operate. Group cohesion is the extent to which members of a group support and validate one another at work. In other words, a cohesive group is one that sticks together. When employees trust one another, seek common goals and work together to achieve these common ends, the group is cohesive; when employees are divided among themselves in terms of what they want to achieve and have little loyalty to one another, the group is not cohesive. There is ample evidence showing that cohesive groups are more effective.36 These results are found both for groups that are studied in highly controlled laboratory settings and also for work

Coming attractions: developing an OB model   25

teams observed in field settings. This fits with our intuitive sense that people tend to work harder in groups that have a common purpose. Companies attempt to increase cohesion in a variety of ways ranging from brief icebreaker sessions to social events like picnics, parties and outdoor adventure-team retreats. Throughout the book we will try to assess whether these specific efforts are likely to result in increases in group cohesiveness. We’ll also consider ways that picking the right people to be on the team in the first place might be an effective way to enhance cohesion.

Group functioning group functioning The quantity and quality of a work group’s output.

In the same way that positive job attitudes can be associated with higher levels of task performance, group cohesion should lead to positive group functioning. Group functioning refers to the quantity and quality of a group’s work output. In the same way that the performance of a sports team is more than the sum of individual players’ performance, group functioning in work organizations is more than the sum of individual task performances. What does it mean to say that a group is functioning effectively? In some organizations, an effective group is one that stays focused on a core task and achieves its ends as specified. Other organizations look for teams that are able to work together collaboratively to provide excellent customer service. Still others put more of a premium on group creativity and the flexibility to adapt to changing situations. In each case, different types of activities will be required to get the most from the team.

Productivity

productivity The combination of the effectiveness and efficiency of an organization. effectiveness The degree to which an organization meets the needs of its clientele or customers. efficiency The degree to which an organization can achieve its ends at a low cost.

The highest level of analysis in organizational behaviour is the organization as a whole. An organization is productive if it achieves its goals by transforming inputs into outputs at the lowest cost. Thus productivity requires both effectiveness and efficiency. A hospital is effective when it successfully meets the needs of its clientele. It is efficient when it can do so at a low cost. If a hospital manages to achieve higher output from its present staff by reducing the average number of days a patient is confined to bed or increasing the number of staff–patient contacts per day, we say the hospital has gained productive efficiency. A business firm is effective when it attains its sales or market share goals, but its productivity also depends on achieving those goals efficiently. Popular measures of organizational efficiency include return on investment, profit per euro of sales and output per hour of labour. Service organizations must include customer needs and requirements in assessing their effectiveness. Why? Because a clear chain of cause and effect runs from employee attitudes and behaviour to customer attitudes and behaviour to a service organization’s productivity. Sears, the US department store firm, has carefully documented this chain.37 The company’s management found that a 5 per cent improvement in employee attitudes leads to a 1.3 per cent increase in customer satisfaction, which in turn translates into a 0.5 per cent improvement in revenue growth. By training employees to improve the employee–customer interaction, Sears was able to improve customer satisfaction by 4 per cent over a 12-month period, generating an estimated €175 million in additional revenues.

Survival Organizational survival The degree to which an organization is able to exist and grow over the long term.

The final outcome we will consider is organizational survival, which is simply evidence that the organization is able to exist and grow over the long term. The survival of an organization depends not just on how productive the organization is, but also on how well it fits with its environment. A company that is very productively making goods and services of little value to the market is unlikely to survive for long, so survival factors in things like perceiving the market successfully, making good decisions about how and when to pursue opportunities, and engaging in successful change management to adapt to new business conditions. Having reviewed the input, process and outcome model, we’re going to change the figure up a little bit by grouping topics together based on whether we study them at the individual, group or organizational level. As you can see in Figure 1.5, we will deal with inputs, processes and outcomes at all three levels of analysis, but we group the chapters as shown here to correspond with the typical ways that research has been done in these areas. It is easier to understand one unified presentation about how personality leads to motivation which leads to performance,

26  1 what is organizational behaviour?

The individual

The group

The organization

Inputs • Diversity in organizations (Ch. 2) • Personality and values (Ch. 4)

Inputs • Group structures (Chs 9 and 10) • Group roles (Chs 9 and 10) • Team responsibilities (Chs 9 and 10)

Inputs • Structure (Chs 15) • Culture (Chs 16)

Processes • Emotions and moods (Ch. 8) • Motivation (Chs 6 and 7) • Perception, decision making and creativity (Ch. 5)

Processes • Communication (Chs 11) • Leadership (Chs 12) • Power and politics (Chs 13) • Conflict and negotiation (Chs 14)

Processes • Human resource management (Chs 17) • Change practices (Chs 18)

Outcomes • Attitudes (Ch. 3) and stress (Ch. 18) • Task performance (all) • Citizenship behaviour (all) • Withdrawal behaviour (all)

Outcomes • Group cohesion (Chs 9 and 10) • Group functioning (Chs 9 and 10)

Outcomes • Productivity (Chs 16 and 17) • Survival (Chs 16 and 17)

Figure 1.5  The plan of the book

than to jump around levels of analysis. Because each level builds on the one that precedes it, after going through them in sequence you will have a good idea of how the human side of organizations function.

SUMMARY Managers need to develop their interpersonal, or people, skills to be effective in their jobs. Organizational behaviour (OB) investigates the impact that individuals, groups and structure have on behaviour within an organization, and it applies that knowledge to make o ­ rganizations work more effectively. Specifically, OB focuses on how to improve productivity; reduce absenteeism, turnover and deviant workplace behaviour; and increase organizational citizenship behaviour and job satisfaction.

IMPLICATIONS FOR MANAGERS ●

●

● ●

●

Resist the inclination to rely on generalizations; some provide valid insights into human behaviour, but many are erroneous. Use metrics and situational variables rather than ‘hunches’ to explain cause-and-effect relationships. Work on your interpersonal skills to increase your leadership potential. Improve your technical skills and conceptual skills through training and staying current with organizational behaviour trends like big data. Organizational behaviour can improve your employees’ work quality and productivity by showing you how to empower your employees, design and implement change programmes, improve customer service and help your employees balance work–life conflicts.

questions for review   27

Lost in translation?

Point / Counterpoint

POINT Walk into your nearest major bookstore. You’ll undoubtedly find a large selection of books devoted to management and managing. Consider the following recent titles: ● Half-Naked

Interview (Amazon Digital, 2013)

● The

Chimp Paradox: The Mind Management Program to Help You Achieve Success, Confidence, and Happiness (Tarcher, 2013)

● Monopoly,

Money, and You: How to Profit from the Game’s Secrets of Success (McGraw-Hill, 2013)

● Nothing

to Lose, Everything to Gain: How I Went from Gang Member to Multimillionaire Entrepreneur (Portfolio Trade, 2013)

● Ninja

Innovation: The Ten Killer Strategies of the World’s Most Successful Businesses (William Morrow, 2013)

● From

Wags to Riches: How Dogs Teach Us to Succeed in Business & Life (BenBella Books, 2011)

● Winnie-the-Pooh

on Management: In Which a Very Important Bear and His Friends Are Introduced to a Very Important Subject (Penguin, 2011)

● The

Art of War from SmarterComics: How to be Successful in Any Competition (Writers Of The Round Table Press, 2011)

Popular books on organizational behaviour often have cute titles and are fun to read, but they make the job of managing people seem much simpler than it is. Most are based on the author’s opinions rather than substantive research, and it is doubtful that one person’s experience translates into effective management practice for everyone. Why do we waste our time on ‘fluff’ when, with a little effort, we can access knowledge produced from thousands of scientific studies on human behaviour in organizations? Organizational behaviour is a complex subject. Few, if any, simple statements about human behaviour are generalizable to all people in all situations. Should you really try to apply leadership insights you got from a book about Napolean or The Simpsons Mr Burns to managing software engineers in the twenty-first century?

COUNTERPOINT Organizations are always looking for leaders, and managers and manager-wannabes are continually looking for ways to hone their leadership skills. Publishers respond to this demand by offering hundreds of titles that promise insights into managing people. Books like these can provide people with the secrets to management that others know about. Moreover, isn’t it better to learn about management from people in the trenches, as opposed to the latest esoteric musings from the ‘Ivory Tower’? Many of the most important insights we gain from life aren’t necessarily the product of careful empirical research studies. It is true there are some bad books out there. But do they outnumber the esoteric research studies published every year? For example, some recent management and organizational behaviour studies were published with the following titles: ● Market

Segmentation, Service Quality, and Overall Satisfaction: Self-Organizing Map and Structural Equation Modeling Methods

● The

Effects of Performance Rating, Leader–Member Exch­ ange, Perceived Utility, and Organizational Justice on Performance Appraisal Satisfaction: Applying a Moral Judgment Perspective

● Nonlinear

Moderating Effect of Tenure on Organizational Identification (OID) and the Subsequent Role of OID in Fostering Readiness for Change

● Examining

the Influence of Modularity and Knowledge Management (KM) on Dynamic Capabilities

We don’t mean to poke fun at these studies. Rather, our point is that you can’t judge a book by its cover any more than you can a research study by its title. There is no one right way to learn the science and art of managing people in organizations. The most enlightened managers are those who gather insights from multiple sources: their own experience, research findings, observations of others, and, yes, business press books, too. If great management were produced by carefully gleaning results from research studies, academics would make the best managers. How often do we see that? Research and academics have an important role to play in understanding effective management. But it isn’t fair to condemn all business books by citing the worst (or, at least, the worse-sounding ones).

QUESTIONS FOR REVIEW 1. What is the importance of interpersonal skills?

3. What is organizational behaviour (OB)?

2. What do managers do in terms of functions, roles and

4. Why is it important to complement intuition with

skills?

systematic study?

28  1 what is organizational behaviour?

5. What are the major behavioural science disciplines

7. What are the challenges and opportunities for mana­

that contribute to OB? 6. Why are there few absolutes in OB?

gers in using OB concepts? 8. What are the three levels of analysis in this book’s OB

model?

EXPERIENTIAL EXERCISE WORKFORCE DIVERSITY Purpose To learn about the different needs of a diverse workforce.



●

Time required Approximately 40 minutes.

Participants and roles Divide the class into six groups of approximately equal size. Assign each group one of the following roles: Nancy is 28 years old. She is a divorced mother of three children, ages 3, 5 and 7. She is the department head. She earns €30,000 per year on her job and receives another €1,800 per year in child support from her ex-husband. Ethel is a 72-year-old widow. She works 25 hours per week to supplement her €4,000 annual pension. Including her hourly wage of €6.25, she earns €11,500 per year. John is a 34-year-old black male born in Trinidad. He is married and the father of two small children. John attends university at night and is within a year of earning his bachelor’s degree. His salary is €13,500 per year. His wife is a lawyer and earns approximately €35,000 per year. Fu is a 26-year-old physically impaired male Asian. He is single and has a master’s degree in education. Fu is ­paralysed and confined to a wheelchair as a result of a car accident. He earns €16,000 per year. Mike is a 16-year-old white male high school student who works 15 hours per week after school and during holidays. He earns €4.20 per hour, or approximately €3,000 per year. The members of each group are to assume the character consistent with their assigned role.

Background The six participants work for a company that has recently installed a flexible benefits programme. Instead of the traditional ‘one benefit package fits all’, the company is allocating an additional 25 per cent of each employee’s annual pay to be used for discretionary benefits. Those benefits and their annual cost are as follows: ● Supplementary health care for employee: Plan A (not deductible and pays 90 per cent) = €1,500



● ●

● ● ●



●



●



●



●



● ●

Plan B (€100 deductible and pays 80 per cent) = €1,000 Plan C (€500 deductible and pays 70 per cent) = €250 Supplementary health care for dependents (same deductibles and percentages as above): Plan A = €1,000 Plan B = €750 Plan C = €250 Supplementary dental plan = €250 Life insurance: Plan A (€12,500 coverage) = €250 Plan B (€25,000 coverage) = €500 Plan C (€50,000 coverage) = €1,000 Plan D (€125,000 coverage) = €1,500 Mental health plan = €250 Prepaid legal assistance = €150 Holiday = 2 per cent of annual pay for each week, up to 6 weeks a year Pension at retirement equal to approximately 50 per cent of final annual earnings = €750 Four-day workweek during the 3 summer months (available only to full-time employees) = 4 per cent of annual pay Day-care services (after company contribution) = €1,000 for all of an employee’s children, regardless of number Company-provided transportation to and from work = €375 College tuition reimbursement = €500 Language class tuition reimbursement = €250

The task 1. Each group has 15 minutes to develop a flexible bene-

fits package that consumes 25 per cent (and no more!) of their character’s pay. 2. After completing step 1, each group appoints a spokes-

person who describes to the entire class the benefits package the group has arrived at for their character. 3. The entire class then discusses the results. How did

the needs, concerns and problems of each participant influence the group’s decision? What do the results suggest for trying to motivate a diverse workforce? Source: Special thanks to Professor Penny Wright (San Diego State University) for her suggestions during the development of this exercise.

Case Incident 1   29

ETHICAL DILEMMA LYING IN BUSINESS Do you think it’s ever okay to lie? If you were negotiating for the release of hostages, most people would probably agree that if lying would lead to the hostages’ safety, it’s okay. What about in business, where the stakes are rarely life or death? Business executives have gone to jail for lying. Calisto Tanzi, founder of Italian firm Parmalat presided over one of the biggest corporate scandals in history. After being caught embezzling an estimated €800 million from his own firm he found himself in Milan prison. The career of one of the world’s most respected business leaders crashed to an ignominious end when Lord Browne, chief executive of BP, resigned immediately after revelations that he had lied to a high court judge. But what about less extreme cases? Tony Wells had 30  years’ experience of working in information ­technology, in jobs ranging from programming to senior management. The 49-year-old decided to look for a new job and began sending his CV to recruitment agencies. In the year that followed, not a single agency called him back. As an experiment, he changed his age on his CV to 30 and had five phone calls within three days. Perhaps you wouldn’t lie on your CV, but would you omit facts?

Questions 1. In a business context, is it ever okay to lie? If yes, what

are those situations? Why is it okay to lie in these ­situations? 2. A recent survey revealed that 24 per cent of managers

said they have fired someone for lying. Do you think it’s fair to fire an employee who lies, no matter what the nature of the lie? Explain. 3. In business, is withholding information for your own

advantage the same as lying? Why or why not? 4. In a business context, if someone has something to

gain by lying, what percentage of people, do you think, would lie?

Source: Based on ‘Lying at work could get you fired’, UPI, 5 March 2006; ‘Brain scans detect more activity in those who lie’, Reuters, 29 November 2004; www.msnbc.msn.com/id/6609019; P. Ekman and E. L. Rosenberg, What the Fact Reveals: Basic and Applied Studies of Spontaneous Expression Using the Facial Action Coding System (CAPS), 2nd edn (New York: Oxford University Press, 2004); E. Crooks, C. Hoyos and N. Tait, ‘Browne quits BP after lying to court’, Financial Times, 1 May 2007; K. Thomas, ‘Why IT workers are lying about their age’, Financial Times, 30 March 2005.

Trust, pride and camaraderie at Ferrari Since 1947, the year Ferrari’s 125 S first triumphed in competition, the Italian car manufacturer with the prancing horse logo has become one of the world’s most respected luxury brands. No one knows this better than the company’s 2,700 employees. ‘We are aware that we are working to perpetuate a myth,’ says one employee. ‘Ferrari is unique in the world.’ One of the keys to the company’s outstanding success has been its high-quality work environment. This is no accident. Ferrari invests time and resources in creating a comfortable and stimulating organizational climate, where people feel motivated and involved, and where they can make the most of themselves while working as part of a team. Ferrari is home to several distinctive employee development programmes, including Learning Point, an e-learning centre; and Creativity Club, which stimulates employees’ original thinking through meetings with artists, theatrical actors, chefs and other creative souls. ‘Ferrari offers growth opportunities that I never found in my previous work experiences,’ comments one employee. ‘Managers are my friends. Here people say hello to each other with a smile.’

CASE INCIDENT 1

Ferrari’s leaders also pay careful attention to maintaining a clean, safe working environment; the factory and offices are designed with temperature controls, natural lighting and noise control. ‘We work in a serene and very clean environment, where passion and perseverance are rewarded,’ says one employee. The company provides incentives through innovative reward programmes, many tied to the car-racing theme. Through the ‘Grand Quality Prix’ programme, employees ‘race’ around a metaphorical track by offering ideas, suggestions and innovative solutions that, if approved and implemented, increase their individual scores. Employees who reach either of two ‘pit stops’ or the finish line receive an award. Of course, one of the greatest perks of working at Ferrari is the opportunity to take pride in the company’s strong tradition and indulge a passion for automobiles. To this end, every employee receives two tickets to the Imola and Monza F1 races and to the GT championship. They also get to see new Formula 1 and GT cars before they are shown to the public. ‘Many people here wear the Ferrari logo. That means a great attachment to the company and to its values,’ says

30  1 what is organizational behaviour?

one employee. ‘I am proud to be part of this company, where we are all one family, part of a team of excellent people working well together. We work for a common, important, and unique objective: to help Ferrari to continue to be a part of history.’

Questions

Source: Based on ‘100 Best Workplaces in Europe 2007’ Great place to work institute/Financial Times see http://www.greatplacetowork.com/ and http:// www.ft.com/reports/bestwork2007; www.ferarri.com. Accessed 10 October 2015.

3. Would these programmes be suitable for all organizations?

1. Describe the initiatives Ferrari is employing to engage its employees.

2. Why do you think Ferrari is using these initiatives? What outcomes might be expected? Why or why not?

4. Would you be satisfied working for this company?

Should managers walk around? Executive offices in major corporations are often far removed from the day-to-day work that most employees perform. While top executives might enjoy the advantages found in the executive suite, and separation from workday concerns can foster a broader perspective on the business, the distance between management and workers can come at a real cost: top managers often fail to understand the ways most employees do their jobs every day. The dangers of this distant approach are clear. Executives sometimes make decisions without recognizing how difficult or impractical they are to implement. Executives can also lose sight of the primary challenges their employees face. The practice of ‘management by walking around’ (MBWA) works against the insularity of the executive suite. To practice MBWA, managers reserve time to walk through departments regularly, form networks of acquaintances in the organization, and get away from their desks to talk to individual employees. The practice was exemplified by Bill Hewlett and Dave Packard, who used this management style at HP to learn more about the challenges and opportunities their employees were encountering. Many other organizations followed suit and found that this style of management had advantages over a typical desk-bound approach to management. A recent study of successful Swedish organizations revealed that MBWA was an approach common to several firms that received national awards for being great places to work. The popular television programme Undercover Boss, with versions in the UK, France, Germany, the US and about 10 other countries, took MBWA to the next level. The premise was having top executives from companies like Chiquita Brands, nPower, DHL and Oxfam work incognito among line employees. Executives reported that this process taught them how difficult many of the jobs in their organizations were, and just how much skill was required to perform even the lowest-level tasks. They also said the experience taught them a lot about the core business in their organizations and sparked ideas for improvements.

CASE INCIDENT 2 Although MBWA has long had its advocates, it does present certain problems. First, the time managers spend directly observing the workforce is time they are not doing their core job tasks like analysis, coordination and strategic planning. Second, management based on subjective impressions gathered by walking around runs counter to a research and data-based approach to making managerial decisions. Third, it is also possible that executives who wander about will be seen as intruders and overseers. Implementing the MBWA style requires a great deal of foresight to avoid these potential pitfalls. Sources: Based on T. Peters and N. Austin, ‘Management by walking about’, Economist, 8 September 2008, www.economist.com; F. Aguirre, M. White, K. Schaefer and S. Phelps, ‘Secrets of an undercover boss’, Fortune, 27 August 2010, pp. 41–4; J. Larsson, I. Backstrom and H. Wiklund, ‘Leadership and organizational behavior: similarities between three award-winning organizations’, International Journal of Management Practice, 3 (2009), pp. 327–45.

Questions 1. What are some of the things managers can learn by walking around and having daily contact with line employees that they might not be able to learn from looking at data and reports?

2. As an employee, would you appreciate knowing your supervisor regularly spent time with workers? How would knowing top executives routinely interact with line employees affect your attitudes towards the ­organization?

3. What ways can executives and other organizational leaders learn about day-to-day business operations besides going ‘undercover’?

4. Are there any dangers in the use of a management by walking around strategy? Could this strategy lead employees to feel they are being spied on? What actions on the part of managers might minimize these concerns.

ENDNOTES   31

ENDNOTES   1 Cited in R. Alsop, ‘Playing well with others’, Wall Street Journal, 9 September 2002.   2 See Association of Graduate Recruiters http://www.agr.org.uk. Accessed 14 October 2014.   3 Oxford Economics, Global Talent 2021: How the new geography of talent will transform human resource strategies (Oxford: Oxford Economics, 2014).   4 See www.greatplacetowork.com   5 S. E. Humphrey, J. D. Nahrgang and F. P. Morgeson, ‘Integrating motivational, social, and contextual work design features: a meta-analytic summary and theoretical extension of the work design literature’, Journal of Applied Psychology, 92, 5 (2007), pp. 1332–56.   6 E. R. Burris, ‘The risks and rewards of speaking up: managerial responses to employee voice’, Academy of Management Journal, 55, 4 (2012), pp. 851–75.   7 I. S. Fulmer, B. Gerhart and K. S. Scott, ‘Are the 100 best better? An empirical investigation of the relationship between being a “great place to work” and firm performance’, Personnel Psychology, Winter 2003, pp. 965–93.   8 H. Fayol, Industrial and General Administration (Paris: Dunod, 1916).   9 A. I. Kraut, P. R. Pedigo, D. D. McKenna and M. D. Dunnette (2005) ‘The role of the manager: what’s really important in different management jobs’, Academy of Management Executive, 19, 4 (2005), pp. 122–29. 10 H. Mintzberg, The Nature of Managerial Work (Upper Saddle River, NJ: Prentice Hall, 1973). 11 R. L. Katz, ‘Skills of an effective administrator’, Harvard Business Review, September–October 1974, pp. 90–102; D. Bartram, ‘The great eight competencies: a criterion-centric approach to validation’, Journal of Applied Psychology, 90, 6 (2005), pp. 1185–203; and S. E. Scullen, M. K. Mount and T. A. Judge, ‘Evidence of the construct validity of developmental ratings of managerial performance’, Journal of Applied Psychology, 88, 1 (2003), pp. 50–66. 12 F. Luthans, ‘Successful vs. effective real managers’, Academy of Management Executive, May 1998, pp. 127–32; and F. Luthans, R. M. Hodgetts and S. A. Rosenkrantz, Real Managers (Cambridge, MA: Ballinger, 1988). See also F. Shipper and J. Davy, ‘A model and investigation of managerial skills, employees’ attitudes and managerial performance’, Leadership Quarterly, 13 (2002), pp. 95–120. 13 P. Wu, M. Foo and D. B. Turban, ‘The role of personality in relationship closeness, developer assistance, and career success’, Journal of Vocational Behavior, 73, 3 (2008), pp. 440–8; and A. M. Konrad, R. Kashlak, I. Yoshioka, R. Waryszak and N. Toren, ‘What do managers like to do? A five-country study’, Group & Organization Management, December 2001, pp. 401–33. 14 A. S. Tsui, S. J. Ashford, L. St. Clair and K. R. Xin, ‘Dealing with discrepant expectations: response strategies and managerial effectiveness’, Academy of Management Journal, December 1995, pp. 1515–43. 15 See, for instance, C. Heath and S. B. Sitkin (2001) ‘Big-B versus Big-O: what is organizational about organizational behavior?’, Journal of Organizational Behavior, February 2001, pp. 43–58. For a review of what one eminent researcher believes should be included in organizational behaviour, based on survey data, see J. B. Miner, ‘The rated importance, scientific validity,

and practical usefulness of organizational behavior theories: a quantitative review’, Academy of Management Learning & Education, September 2003, pp. 250–68. 16 D. M. Rousseau and S. McCarthy, ‘Educating managers from an evidence-based perspective’, Academy of Management Learning & Education, 6, 1 (2007), pp. 84–101; and S. L. Rynes, T. L. Giluk and K. G. Brown, ‘The very separate worlds of academic and practitioner periodicals in human resource management: implications for evidence-based management’, Academy of Management Journal, 50, 5 (2007), pp. 987–1008. 17 See L. A. Burke and J. E. Moore, ‘A perennial dilemma in OB education: engaging the traditional student’, Academy of Management Learning & Education, March 2003, pp. 37–52. 18 J. Surowiecki, ‘The fatal-flaw myth’, New Yorker, 31 July 2006, p. 25. 19 A. McAfee and E. Brynjolfsson, ‘Big data: the management revolution’, Harvard Business Review, October 2012, pp. 59–68. 20 N. Bloom, R. Sadun and J. Van Reenan, ‘How three essential practices can address even the most complex global practices’, Harvard Business Review, November 2012, pp. 77–82. 21 M. J. Mauboussin, ‘Most companies use the wrong metrics. Don’t be one of them’, Harvard Business Review, October 2012, pp. 46–56. 22 United States Department of Labor: Bureau of Labor Statistics, http://www.bls.gov/fls/ichcccountry.htm#slovakia. Accessed 14 December 2014. 23 See, for instance, M. Workman and W. Bommer, ‘Redesigning computer call center work: a longitudinal field experiment’, Journal of Organizational Behavior, May 2004, pp. 317–37. 24 E. J. Hirst, ‘Burnout on the rise’, Chicago Tribune, October 19, 2012, http://articles.chicagotribune.com/2012–10–29/business/ ct-biz-1029-employee-burnout-20121029_1_employee-burnout-herbert-freudenberger-employee-stress. 25 S. Shellenbarger, ‘Single and off the fast track’, Wall Street Journal, 23 May 2012, pp. D1, D3. 26 M. Mithel, ‘What women want’, Business Today, March 8, 2013, http://businesstoday.intoday.in/story/careers-worklife-balancewomen/1/193135.html. 27 D. S. Ones and S. Dilchert, ‘Environmental sustainability at work: a call to action’, Industrial and Organizational Psychology, 5 (2012), pp. 444–66. 28 F. Luthans and C. M. Youssef, ‘Emerging positive organizational behavior’, Journal of Management, June 2007, pp. 321–49; C. M. Youssef and F. Luthans, ‘Positive organizational behavior in the workplace: the impact of hope, optimism, and resilience’, Journal of Management, 33, 5 (2007), pp. 774–800; and J. E. Dutton and S. Sonenshein, ‘Positive organizational scholarship’, in C. Cooper and J. Barling (eds) Encyclopedia of Positive Psychology (Thousand Oaks, CA: Sage, 2007). 29 L. M. Roberts, G. Spreitzer, J. Dutton, R. Quinn, E. Heaphy and B. Barker, ‘How to play to your strengths’, Harvard Business Review, January 2005, pp. 1–6; and L. M. Roberts, J. E. Dutton, G. M. Spreitzer, E. D. Heaphy and R. E. Quinn, ‘Composing the reflected best-self portrait: becoming extraordinary in work organizations’, Academy of Management Review, 30, 4 (2005), pp. 712–36. 30 W. Bailey and A. Spicer (2007) ‘When does national identity matter? Convergence and divergence in international business ethics’,

32  1 what is organizational behaviour? Academy of Management Journal, 50, 6 (2007), pp. 1462–80; and A. B. Oumlil and J. L. Balloun, ‘Ethical decision-making differences between American and Moroccan managers’, Journal of Business Ethics, 84, 4 (2009), pp. 457–78.

33 M. Stevens, ‘Rising sick bill “costs UK business £29bn a year”’, CIPD (2013), http://www.cipd.co.uk/pm/peoplemanagement/b/ weblog/archive/2013/07/15/rising-sick-bill-costs-uk-business163–29bn-a-year.aspx. Accessed 10 February 2015.

31 J. Merritt, ‘For MBAs, soul-searching 101’, Business Week, 16 September 2002, pp. 64–6; and S. Greenhouse, ‘The mood at work: anger and anxiety’, New York Times, 29 October 2002, p. E1.

34 Confederation for British Industry (www.CBI.org.uk).

32 D. M. Mayer, M. Kuenzi, R. Greenbaum, M. Bardes and R. Salvador, ‘How low does ethical leadership flow? Test of a trickle-down model’, Organizational Behavior and Human Decision Processes, 108, 1 (2009), pp. 1–13; and A. Ardichvili, J. A. Mitchell and D. Jondle, ‘Characteristics of ethical business cultures’, Journal of Business Ethics, 85, 4 (2009), pp. 445–51.

36 M. Casey-Campbell and M. L. Martens, ‘Sticking it all together: a critical assessment of the group cohesion-performance literature’, International Journal of Management Reviews, 11 (2008), pp. 223–46.

35 See, for example, M. C. Sturman and C. O. Trevor, ‘The implications of linking the dynamic performance and turnover literatures’, Journal of Applied Psychology, August 2001, pp. 684–96.

37 A. J. Rucci, S. P. Kirn and R. T. Quinn, ‘The employee–­customer– profit chain at Sears’, Harvard Business Review, January– February 1998, pp. 83–97.

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CHAPTER 2 Diversity in organizations Learning objectives After studying this chapter, you should be able to: 1 Describe the two major forms of workforce diversity. 2 recognize stereotypes and understand how they function in organizational settings. 3 Identify the key biographical characteristics and describe how they are relevant to oB. 4 Define intellectual ability and demonstrate its relevance to oB. 5 contrast intellectual and physical ability. 6 Describe how organizations manage diversity effectively.

Diversity is really a richness for mankind. Fabiola Gianotti

LIFE WITHOUT LIMITS

TPG/Getty Images

Nick Vujicic’s achievements are impressive. Still in his early 30’s, he is founder and president of an international non-profit organization, owner of a motivational-speaking company, bestselling author and has travelled to over 50 countries, sharing his story with over 400 million people. Even more impressive is that he has achieved so much after having been born without arms or legs. Throughout his childhood, Nick dealt not only with the typical challenges of school and adolescence, such as bullying and self-esteem issues, he also struggled with depression and loneliness as he questioned why he was different from all the other kids. He couldn’t get the haunting question of ‘Why was I the one born without arms and legs?’ out of his head. As Nick grew up, he learned to deal with his disability and gradually accomplished more on his own. A janitor at his high Source: http://www.nickvujicic.com/. Accessed 3 April 2016.

school inspired him to start speaking publicly about overcoming adversity, so Nick starting speaking to small groups of students when he was 17. Nick claims that he wanted to be as independent as he could be. He goes swimming, fishing, snowboarding and surfing. ‘In any situation, I do the best that I can. It’s not what you have, but what you do with it.’ Nick is just one example of the diversity apparent in the contemporary workforce. Across Europe the labour market continues to see an increase of, for example, older workers, females, migrants, disabled and more highly educated into the labour market. The European employment strategy urges Member States to work towards ‘inclusive growth’. The challenge for organizations is to effectively manage this diversity to be able to maximize the contributions of all individuals.

36  2 Diversity in organizations

In this chapter, we look at how organizations work to maximize the potential contributions of a diverse workforce. We also show how demographic characteristics such as ethnicity and individual differences in the form of ability affect employee performance and satisfaction.

REFLECTION Describe the demographics of the employees at your place of work (or one in which you are familiar with). What opportunities and challenges do you think this presents?

Diversity 1  Describe the two major forms of workforce diversity.

We aren’t all the same. This is obvious enough, but managers sometimes forget they need to recognize and capitalize on differences to get the most from their employees. Effective diversity management increases an organization’s access to the widest possible pool of skills, abilities and ideas. Managers also need to recognize that differences among people can lead to miscommunication, misunderstanding and conflict. In this chapter, we’ll learn about how individual characteristics like age, gender, race, ethnicity and abilities can influence employee performance. We’ll also see how managers can develop awareness about these characteristics and manage a diverse workforce effectively.

Demographic characteristics of the European workforce

surface-level diversity Differences in easily perceived characteristics, such as gender, race, ethnicity, age, or disability, that do not necessarily reflect the ways people think or feel but may activate certain stereotypes. deep-level diversity Differences in values, personality and work preferences that become progressively more important for determining similarity as people get to know one another better.

In the past, OB textbooks noted that rapid change was about to occur as the predominantly middle-aged, male managerial workforce gave way to a gender-balanced, multicultural workforce. Today, that change is no longer happening: it has happened, and it is increasingly reflected in the makeup of managerial and professional jobs. Employment rates for women have risen more or less continuously over the past decade and a European Union survey revealed 31 per cent of managers and 54 per cent of professionals are now female. Older workers are also more common in the workplace than they once were. For example, the employment rate of 55- to 64-year-olds rose by nearly 12 per cent in Europe over the past 10 years. Immigration between EU countries and from non-member countries has also increased and hence created a more multicultural workforce.1 At the same time, however, differences in wages, employment levels and occupations across genders and ethnic groups persist. There are both challenges and opportunities brought about by demographic changes. The shift towards a diverse workforce means organizations need to make diversity management a central component of their policies and practices.

Levels of diversity Although much has been said about diversity in age, race, gender, ethnicity, religion and disability status, experts now recognize that these demographic characteristics are just the tip of the iceberg.2 Demographics mostly reflect surface-level diversity, not thoughts and feelings, and can lead employees to perceive one another through stereotypes and assumptions. However, evidence has shown that as people get to know one another, they become less concerned about demographic differences if they see themselves as sharing more important characteristics, such as personality and values, that represent deep-level diversity.3 To understand this difference between surface- and deep-level diversity, consider a few examples. Louis and Carole are co-workers who seem to have little in common at first glance. Louis is a young, recently hired male college graduate with a business degree, raised in London.

Diversity   37

2 Recognize stereotypes and understand how they function in organizational settings.

Carole is an older, long-tenured woman raised in rural France, who achieved her current level in the organization by starting as a high school graduate and working her way through the hierarchy. At first, these co-workers may experience some differences in communication based on their surface level differences in education, ethnicity, background and gender. However, as they get to know one another, they may find they are both deeply committed to their families, share a common way of thinking about important work problems, like to work collaboratively, and are interested in international assignments in the future. These deeplevel similarities will overshadow the more superficial differences between them, and research suggests they will work well together. On the other hand, Steven and David are two unmarried, British, college graduates who recently started working together. Superficially, they seem well matched. But Steven is highly introverted, prefers to avoid risks, solicits the opinions of others before making decisions, and likes the office quiet. David is extroverted, risk-seeking and assertive, and likes a busy, active and energetic work environment. Their surface-level similarity will not necessarily lead to positive interactions because they have such fundamental, deep-level differences. It will be a challenge for them to collaborate regularly at work, and they’ll have to make some compromises to get things done together. Throughout this book, we will encounter differences between deep- and surface-level diversity in various contexts. Individual differences in personality and culture shape preferences for rewards, communication styles, reactions to leaders, negotiation styles, and many other aspects of behaviour in organizations.

Discrimination discrimination Noting of a difference between things; often we refer to unfair discrimination, which means making judgements about individuals based on stereotypes regarding their demographic group.

Although diversity does present many opportunities for organizations, effective diversity management also means working to eliminate unfair discrimination. To discriminate is to note a difference between things, which in itself isn’t necessarily bad. Noticing one employee is more qualified is necessary for making hiring decisions; noticing another is taking on leadership responsibilities exceptionally well is necessary for making promotion decisions. Usually when we talk about discrimination, though, we mean allowing our behaviour to be influenced by stereotypes about groups of people. Rather than looking at individual characteristics, unfair discrimination assumes everyone in a group is the same. This discrimination is often very harmful to organizations and employees. Table 2.1 provides definitions and examples of some forms of discrimination in organ­ izations. Although many of these actions are prohibited by law, and therefore aren’t part of

Table 2.1  Forms of discrimination Type of discrimination

Definition

Discriminatory policies or practices

Actions taken by representatives of the organization that deny equal opportunity to perform or unequal rewards for performance.

Sexual harassment

Unwanted sexual advances and other verbal or physical conduct of a sexual nature that create a hostile or offensive work environment.

Intimidation

Overt threats or bullying directed at members of specific groups of employees.

Mockery and insults

Jokes or negatve stereotypes; sometimes the result of jokes taken too far.

Exclusion

Exclusion of certain people from job opportunities, social events, discussions, or informal mentoring; can occur unintentionally.

Incivility

Disrespectful treatment, including behaving in an aggressive manner, interrupting the person, or ignoring his or her opinions.

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almost any organization’s official policies, thousands of cases of employment discrimination are documented every year, and many more go unreported. As discrimination has increasingly come under both legal scrutiny and social disapproval, most overt forms have faded, which may have resulted in an increase in more covert forms like incivility or exclusion.4 As you can see, discrimination can occur in many ways, and its effects can be just as varied depending on the organizational context and the personal biases of its members. Some forms, like exclusion or incivility, are especially hard to eradicate because they are often impossible to observe and may occur simply because the actor isn’t aware of the effects of his or her actions. Whether intentional or not, discrimination can lead to serious negative consequences for employers, including reduced productivity and citizenship behaviour, negative conflicts and increased turnover. Unfair discrimination also leaves qualified job candidates out of initial hiring and promotions. Even if an employment discrimination lawsuit is never filed, a strong business case can be made for aggressively working to eliminate unfair discrimination. Diversity is a broad term, and the phrase workplace diversity can refer to any characteristic that makes people different from one another. The following section covers some important surface-level characteristics that differentiate members of the workforce.

Biographical characteristics biographical characteristics Personal characteristics — such as age, gender, race and length of tenure — that are objective and easily obtained from personnel records. These characteristics are representative of surface-level diversity.

3  Identify the key biographical characteristics and describe how they are relevant to OB.

Biographical characteristics such as age, gender, race, disability and length of service are some

of the most obvious ways employees differ. This textbook (as discussed in Chapter 1) is essentially concerned with finding and analysing the variables that affect employee productivity, absence, turnover, deviance, citizenship and satisfaction (refer back to Figure 1.5). Many organizational concepts – motivation, say, or power and politics or organizational culture – are hard to assess. Let’s begin, then, by looking at factors that are easily definable and readily available data that can be obtained, for the most part, from an employee’s human resources (HR) file. Variations in these surface-level characteristics may be the basis for discrimination against classes of employees, so it is worth knowing how closely related they actually are to important work outcomes. Many are not as important as people believe, and far more variation occurs within groups sharing biographical characteristics than between them.

Age The relationship between age and job performance is likely to be an issue of increasing importance during the next decade for many reasons. For one, the workforce is ageing. Across the EU, in 2002 the employment rate for 55–64-year-olds was 38 per cent, by 2013 it was over 50 per cent.5 For another, many workers today (although the issue is hotly debated throughout the EU) no longer have to retire at a certain age. Employers express mixed feelings about the older worker.6 They see a number of positive qualities older workers bring to their jobs, such as experience, judgement, a strong work ethic and commitment to quality. But older workers are also perceived as lacking flexibility and resisting new technology. And when organizations are actively seeking individuals who are adaptable and open to change, the negatives associated with age clearly hinder the initial hiring of older workers and increase the likelihood they will be let go during cutbacks. Now let’s take a look at the evidence. What effect does age actually have on turnover, absenteeism, productivity and satisfaction? The older you get, the less likely you are to quit your job. That conclusion is based on studies of the age–turnover relationship.7 Of course, this shouldn’t be too surprising. As workers get older, they have fewer alternative job opportunities as their skills have become more specialized to certain types of work. Their long tenure also tends to provide them with higher wage rates, longer paid vacations and more attractive pension benefits.

Peter Byrne/PA Archive/Press Association Images

Biographical characteristics   39

McDonald’s has been actively targeting older recruits for many years in Europe, in an industry known for its emphasis on youth. A McDonald’s study found that customers were 20 per cent more satisfied when served in restaurants that employed staff over-60 and many older workers show great empathy and a natural flair for mentoring, which allows them to play a vital role in helping younger colleagues develop and mature. The company has even placed grandparents to work alongside their grandchildren in its restaurants.8

It’s tempting to assume that age impacts absenteeism. Most studies show that older employees have lower rates of avoidable absence versus younger employees and equal rates of unavoidable absence, such as sickness absence.9 In general, the older working population is healthier than you might expect. Recent research indicates that, worldwide, older workers do not have more psychological problems or day-to-day physical health problems than younger workers.10 Many believe productivity declines with age. It is often assumed that skills like speed, agility, strength and coordination decay over time and that prolonged job boredom and lack of intellectual stimulation contribute to reduced productivity. The evidence, however, contradicts those assumptions. Reviews of the research find that age and job task performance are unrelated and that older workers are more likely to engage in citizenship behaviour.11 Our final concern is the relationship between age and job satisfaction, where the evidence is mixed. A review of more than 800 studies found that older workers tend to be more satisfied with their work, report better relationships with co-workers, and are more committed to their employing organizations.12 Other studies, however, have found a U-shaped relationship. Several explanations could clear up these results, the most plausible being that these studies are intermixing professional and nonprofessional employees. When we separate the two types, satisfaction tends to continually increase among professionals as they age, whereas it falls among nonprofessionals during middle age and then rises again in the later years. What are the effects of discrimination against individuals on the basis of age? One largescale study of more than 8,000 employees in 128 companies found that an organizational climate favouring age discrimination was associated with lower levels of commitment to the company. This lower commitment was, in turn, related to lower levels of organizational performance.13 Such results suggest that combating age discrimination may be associated with higher levels of organizational performance.

Gender Few issues initiate more debates, misconceptions and unsupported opinions than whether women perform as well on jobs as men do. The best place to begin to consider this is with

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‘You can’t teach an old dog new tricks!’ This statement is false. It reflects the widely held stereotype that older workers have difficulty adapting to new methods and techniques. Studies consistently demonstrate that older employees are perceived as being relatively inflexible, resistant to change and less willing and able to be trained than their younger counterparts.14 But these perceptions are mostly wrong. Evidence does indicate that older workers (typically defined as people aged 50 and over) are less confident of their learning abilities (perhaps due to acceptance of societal stereotypes). Moreover, older workers do seem to be somewhat less efficient in acquiring complex or demanding skills, and, on average, they are not as fast in terms of reaction time or in solving problems. That is, they may take longer to train. However, once trained, research indicates that older workers actually learn more than their younger counterparts, and they are better at transferring what they have learned to the job.15 And age actually improves some intellectual abilities, such as

MYTH OR SCIENCE?

verbal ability, and older brains are packed with more so-called expert knowledge – meaning they tend to have better outlines for how to solve problems.16 The ability to acquire the skills, knowledge or behaviour necessary to perform a job at a given level – that is, trainability – has been the subject of much research. And the evidence indicates that there are differences between people in their trainability. A number of individual-difference factors (such as low ability and reduced motivation) have been found to impede learning and training outcomes. However, age has not been found to influence these outcomes. In fact, older employees actually benefit more from training. Still, the stereotypes persist. Source: K. A. Wrenn and T. J. Maurer, ‘Beliefs about older workers’ learning and development behavior in relation to beliefs about malleability of skills, age-­ related decline, and control’, Journal of Applied Social Psychology, 34, 2 (2002), pp. 223–42.

the recognition that few, if any, important differences between men and women affect job performance. In fact, a recent meta-analysis of job performance studies found that women scored slightly higher than men on performance measures (although, pertinent to our discussion on discrimination, men were rated as having higher promotion potential).17 There are no consistent male– female differences in problem-solving ability, analytical skills, competitive drive, motivation, sociability, or learning ability.18 Unfortunately, sex roles still affect our perceptions. For example, one study found that female students are prone to accept occupational stereotypes and often perceive a lack of fit between themselves and traditionally male roles.19 In the hiring realm, modern research indicates that managers are still influenced by gender bias when selecting candidates for certain positions.20 And a new study reported that once on the job, men and women may be offered a similar number of developmental experiences, but females are less likely to be assigned challenging positions by men, assignments that may have helped them achieve higher organiz­ ational positions.21 Women who succeed in traditionally male domains are perceived as less likeable, more hostile and less desirable as supervisors,22 but women at the top have been reporting that this perception is changing and can be countered by effective interpersonal skills.23 Research also suggests that women believe sex-based discrimination is more prevalent than do male employees, and these beliefs are especially pronounced among women who work with a large proportion of men.24 It is worth asking what the implications of sex discrimination are for individuals. Notably, women still earn less money than men for the same positions,25 even in traditionally female roles (‘the glass escalator’ means men receive faster promotions in many female-dominated occupations).26 In a recent study, experienced managers allocated 71 per cent of available pay rise funds for male employees, leaving only 29 per cent for females.27 Working mothers also face ‘maternal wall bias’ by employers, which limits their professional opportunities, and both men and women face discrimination for their family caregiving roles.28 Research has shown that workers who experience the worst form of overt discrimination, sexual harassment, have higher levels of psychological stress, and these feelings in turn are related to lower levels of organizational commitment and job satisfaction, and higher intentions to leave.29 As with age discrimination, the evidence suggests that combating sex discrimination may be associated

Biographical characteristics   41

with better performance for the organization as a whole, partially since employees who are discriminated against are more likely to leave.

Race and ethnicity Race is a controversial issue. It can be so contentious that it’s tempting to avoid the topic. A complete picture of individual differences in OB, however, would be incomplete without a discussion of race. What is race? Before we can discuss how race matters in OB, first we have to reach some consensus about what race is, and that’s not easily done. Some scholars argue that it’s not productive to discuss race for policy reasons (it’s a divisive issue), for biological reasons (a large percentage of us are a mixture of races), or for genetic and anthropological reasons (many anthropologists and evolutionary scientists reject the concept of distinct racial categories). However, if you look around the streets of London, Brussels, Dublin or any city, you will see a variety of skin tones, hair textures and other physical characteristics. It is these characteristics, along with culture and ethnic origins, that people may use to group themselves and others into ‘races’.30 Commonly considered as racial groups include White, Pakistani, Black African, Black Caribbean, Romany Gypsy and many others. For our purposes we will define race as the biological heritage people use to identify themselves. Ethnicity is an additional set of cultural characteristics that often overlaps with race. These definitions allow each individual to define his or her race and ethnicity. Tiger Woods, for example, refuses to place himself into a single racial category, emphasizing his multi-ethnic roots. Race has been studied quite a bit in OB, particularly as it relates to employment outcomes such as personnel selection decisions, performance evaluations, pay and workplace discrimination. Doing justice to all of this research isn’t possible here, so let’s summarize a few points. First, research has consistently demonstrated that race is a factor in some selection decisions. Experiments in countries including Belgium, England, France and the Netherlands have detected that non-white racial minorities were discriminated against in more than 25 per cent of the occasions when interviews or jobs were offered.31 Second, there is evidence to suggest that there is a tendency for individuals to favour colleagues of their own race in performance evaluations and promotion decisions.32 This has been implicated as one of the reasons why senior management positions across Europe are under-represented by minority racial groups.33 As a consequence, racial minorities are comparatively disadvantaged in terms of pay.34 Most research shows that members of racial and ethnic minorities report higher levels of discrimination in the workplace.35 As we discussed before, discrimination – for any reason – leads to increased turnover, which is usually detrimental to organizational performance. While better representation of all racial groups in organizations remains a goal, recent research indicates that an individual of minority status is much less likely to leave their organization if there is a feeling of inclusiveness (a positive diversity climate).36 Some research suggests that having a positive climate for diversity overall can also lead to increased sales.37

Disability One in six people in the EU has a disability that ranges from mild to severe making around 80 million who are often prevented from taking part fully in society and the economy because of environmental and attitudinal barriers.38 The employment rate of people with disabilities is around 20 per cent lower than that when compared to individuals without such problems. However, the figure varies significantly across Europe from more than 40 per cent to the lowest level of 8 per cent in France.39 Because of this, a major drive over recent years has been to help the disabled gain employment which, in turn, has increased the representation of the disabled in the workplace. The impact of disabilities on employment outcomes has been explored from a variety of perspectives. On the one hand, a review of the evidence suggests workers with disabilities receive higher performance evaluations. However, this same review found that despite their higher performance, individuals with disabilities tend to encounter lower performance e­ xpectations and are less likely to be hired.40 These negative effects are much stronger for individuals with

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OB IN THE NEWS

Obesity can be considered a disability, European Court rules by Kadhim Shubber and Sarah O’Connor, Law Courts Correspondents Obesity can be considered a disability, the European Court of Justice (ECJ) has said in a ruling that could change the way employers in Europe treat overweight staff. The ECJ ruled that obesity is not a disability in itself, but that it could be considered one if it caused physical, mental or psychological problems that hampered a person’s ability to participate in work. Gemma Parker, an employment lawyer at Linklaters, said: ‘Lots of employers in particular feel that if you’re obese that’s your own lookout and you’ve caused the situation and therefore why should that be a disability? But what this judgment is really emphasising is it’s the medical facts – are you suffering from any impairment on your ability to do your job – and we don’t care if its origin is your obesity.’ She said employers have to make ‘reasonable adjustments’ to help disabled workers overcome the effects of their disability. In the case of obese

workers, that might mean providing them with larger or comfier chairs or parking spaces closer to the office entrance. The ECJ case concerned Karsten Kaltoft, a Danish childminder for a local government authority who said he was fired for being obese. Mr Kaltoft, who weighs about 160kg, was fired by the Municipality of Billund after 15 years in the job. His obesity was mentioned during a meeting when he was fired, said the ECJ, but the local authority denied that his obesity was a factor in his dismissal. In an interview with the BBC World Service, Mr Kaltoft denied reports he was unable to bend down to tie children’s shoelaces and said he did not consider himself­ disabled. ‘We hope the outcome is that it’s not OK just to fire a person because they’re fat, if they’re doing their job properly,’ he said.

Source: Adapted from Shubber, K. and O’Connor, S. (2014) Obesity can be considered a disability, European court rules, ­Financial Times, 18 December. © The Financial Times Limited. All Rights Reserved. Pearson Education Ltd. is responsible for providing this adaptation of the original article.

mental disabilities, and there is some evidence to suggest mental disabilities may impair performance more than physical disabilities. Individuals with such common mental health issues as depression and anxiety are significantly more likely to be absent from work.41 Though individuals with disabilities continue to experience discrimination, they are sometimes given preferential treatment in the workplace. When disability status is randomly manipulated among hypothetical candidates, disabled individuals are rated as having superior personal qualities like dependability and potency.42

Other biographical characteristics: tenure, religion and cultural identity The last set of biographical characteristics we’ll look at are tenure, religion and cultural identity.

Tenure Except for gender and racial differences, few issues are more subject to misconceptions and speculations than the impact of seniority on job performance. Extensive reviews have been conducted of the seniority–productivity relationship.43 If we define seniority as time on a particular job, the most recent evidence demonstrates a positive relationship between seniority and job productivity.

Biographical characteristics   43

So tenure, expressed as work experience, appears to be a good predictor of employee productivity. The research relating tenure to absence is quite straightforward. Studies consistently show seniority to be negatively related to absenteeism.44 Tenure is also a potent variable in explaining turnover. The longer a person is in a job, the less likely he or she is to quit.45 Moreover, consistent with research suggesting past behaviour is the best predictor of future behaviour, evidence indicates tenure at an employee’s previous job is a powerful predictor of that employee’s future turnover.46 Evidence indicates tenure and job satisfaction are positively related.47 In fact, when age and tenure are treated separately, tenure appears a more consistent and stable predictor of job satisfaction than age.

Religion The effects of religion in the workplace has greatly increased in prominence over the past decade. A wave of high-profile religious bias lawsuits is testing the limits of anti-discrimin­ ation laws and forcing businesses to reconsider how they approach deep-rooted beliefs. British Airways, for example, triggered a storm of criticism after barring a check-in worker from visibly wearing a crucifix around her neck at work, a policy the airline later amended. Similar battles have been fought over Muslim employees’ right to wear a hijab, or headscarf and other overtly religious attire.48 Other issues include, for example, employees not being able to serve alcohol, having to leave early or not being able to work on certain religious days, and premises having to provide prayer rooms. Religion is clearly having an effect in the workplace, however, there has not been a great deal of research into these effects to date. What is known is that workers who are the victims of religious discrimination have higher levels of health problems, absence and turnover.49

Cultural identity We have seen that people define themselves in terms of race. Many carry a strong cultural identity as well, a link with the culture of family ancestry or youth that lasts a lifetime, no matter where the individual may live in the world. People choose their cultural identity, and they also choose how closely they observe the norms of that culture. Cultural norms influence the workplace, sometimes resulting in clashes. Organizations must adapt. Workplace practices that coincided with the norms of a person’s cultural identity were commonplace years ago when societies were less mobile. People looked for work near home, managers shared the cultural identity of their employees, and organizations established holidays, observances, practices and customs that suited the majority. Workers who struck out for other locales either looked for groups and organizations that shared their cultural identity, or they adapted their practices to the norms of their new employers. Organizations were generally not expected to accommodate each individual’s preferences. Thanks to global integration and changing labour markets, however, global companies do well to understand and respect the cultural identities of their employees, both as groups and as individuals. A German company looking to do business in, say, Latin America, needs to understand that employees in those cultures often expect long summer holidays. A company that provides incentives to work during this culturally established break will find resistance among employees is great. National labour markets are changing for many reasons, many economic. In Italy, for example, guaranteed jobs, pensions and benefits used to be the norm. Thus, while older workers may hold solid contracts providing benefits for life, the difficult economy has meant younger workers are able to find only temporary jobs despite attaining higher education levels than their parents. The financial provision that was part of the cultural identity of Italy’s citizens is now creating a generational divide.50 A company seeking to be sensitive to the cultural identities of its employees should look beyond accommodating its majority groups and instead create as much of an individualized approach to practices and norms as possible.

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The benefits of cultural intelligence

glOBal

Have you ever noticed that some individuals seem to have a knack for relating well to people from different cultures? Some researchers have labelled this skill cultural intelligence, which is an outsider’s natural ability to interpret an individual’s unfamiliar gestures and behaviours in the same way that others from the individual’s culture would. Cultural intelligence is important because, when conducting business with people from different cultures, misunderstandings can often occur, and, as a result, cooperation and productivity may suffer. Consider the following example. An American manager was meeting with his fellow design team engineers, two of whom were German. As ideas floated around the table, his German colleagues quickly rejected them. The American thought the feedback was harsh and concluded that his German colleagues were rude. However, they were merely

critiquing the ideas, not the individual – a distinction that the American was unable to make, perhaps due to a lack of cultural intelligence. As a result, the American became wary of contributing potentially good ideas. Had the American been more culturally intelligent, he likely would have recognized the true motives behind his colleagues’ remarks and thus may have been able to use those remarks to improve his ideas. It is unclear whether the notion of cultural intelligence is separate from other forms of intelligence, such as emotional intelligence, and even whether cultural intelligence is different from cognitive ability. However, it is clear that the ability to interact well with individuals from different cultures is a key asset in today’s global business environment. Source: Based on C. Earley and E. Mosakowski, ‘Cultural Intelligence’, Harvard Business Review, October 2004, pp. 139–46.

Ability 4 Define intellectual ability and demonstrate its relevance to OB.

ability An individual’s capacity to perform the various tasks in a job.

We’ve so far covered surface characteristics unlikely, on their own, to directly relate to job performance. Now we turn to deep-level abilities that are closely related to job performance. Contrary to what we were taught in primary school, we weren’t all created equal in our abilities. Most people are to the left or the right of the median on some normally distributed ability curve. For example, regardless of how motivated you are, you may not be able to act as Daniel Day-Lewis, play football as well as Cristiano Ronaldo, or write as well as J. K. Rowling. Of course, just because we aren’t all equal in abilities does not imply that some individuals are inherently inferior. Everyone has strengths and weaknesses that make him or her relatively superior or inferior to others in performing certain tasks or activities. From management’s standpoint, the issue is not whether people differ in terms of their abilities. They clearly do. The issue is using the knowledge that people differ to increase the likelihood an employee will perform his or her job well. What does ability mean? As we use the term, ability is an individual’s current capacity to perform the various tasks in a job. Overall abilities are essentially made up of two sets of factors: intellectual and physical.

Intellectual abilities intellectual abilities The capacity to do mental activities – thinking, reasoning and problem solving.

Intellectual abilities are abilities needed to perform mental activities – thinking, reasoning and problem solving. Most societies place a high value on intelligence, and for good reason. Smart people generally earn more money and attain higher levels of education. They are also more likely to emerge as leaders of groups. However, while people aren’t consistently capable of correctly assessing their cognitive ability,51 the origins, influence factors and testing of intelligence quotient (IQ) are controversial.52 IQ tests are designed to ascertain a person’s general intellectual abilities. So, too, are popular college admission tests and graduate admission tests, for example, the GMAT in business. Testing firms don’t claim their tests assess intelligence, but experts know they do.53 The seven most frequently cited dimensions making up intellectual abilities are number aptitude, verbal comprehension, perceptual speed, inductive reasoning, deductive reasoning, spatial visualization and memory.54 Table 2.2 describes these dimensions.

Ability   45

Table 2.2  Dimensions of intellectual ability Dimension

Description

Job example

Number aptitude

Ability to do speedy and accurate arithmetic

Accountant: Computing the sales tax on a set of items

Verbal comprehension

Ability to understand what is read or heard and the relationship of words to each other

Plant manager: Following corporate policies on hiring

Perceptual speed

Ability to identify visual similarities and ­differences quickly and accurately

Fire investigator: Identifying clues to support a charge of arson

Inductive reasoning

Ability to identify a logical sequence in a problem and then solve the problem

Market researcher: Forecasting demand for a product in the next time period

Deductive reasoning

Ability to use logic and assess the implications of an argument

Supervisor: Choosing between two different suggestions offered by employees

Spatial visualization

Ability to imagine how an object would look if its position in space were changed

Interior decorator: Redecorating an office

Memory

Ability to retain and recall past experiences

Salesperson: Remembering the names of customers

general mental ability (GMA) An overall factor of intelligence, as suggested by the positive correlations among specific intellectual ability dimensions.

Intelligence dimensions are positively related, so if you score high on verbal comprehension, for example, you’re more likely to also score high on spatial visualization. The correlations aren’t perfect, meaning people do have specific abilities that predict important work-related outcomes when considered individually.55 However, they are high enough that researchers also recognize a general factor of intelligence, general mental ability (GMA). Evidence strongly supports the idea that the structures and measures of intellectual abilities generalize across cultures. Thus, someone in Venezuela or Sudan does not have a different set of mental abilities than a UK or Czech worker. There is some evidence that IQ scores vary to some degree across cultures, but those differences are much smaller when we take into account educational and economic differences.56 Jobs differ in the demands they place on intellectual abilities. Research consistently indicates a correlation between cognitive ability and task performance.57 The more complex a job in terms of information-processing demands, the more general intelligence and verbal abilities will be necessary to perform successfully.58 Where employee behaviour is highly routine and there are few or no opportunities to exercise discretion, a high IQ is not as important to performing well. However, that does not mean people with high IQs cannot have an impact on traditionally less complex jobs. While intelligence is a big help in performing a job well, it doesn’t make people happier or more satisfied with their jobs. The correlation between intelligence and job satisfaction is about zero. Why? Research suggests that although intelligent people perform better and tend to have more interesting jobs, they are also more critical when evaluating their job conditions. Thus, smart people have it better, but they also expect more.59

Physical abilities 5 Contrast intellectual and physical ability. physical abilities The capacity to do tasks that demand stamina, dexterity, strength and similar characteristics.

Though the changing nature of work suggests intellectual abilities are increasingly important for many jobs, physical abilities have been and will remain valuable. Research on hundreds of jobs has identified nine basic abilities needed in the performance of physical tasks.60 These are described in Table 2.3. Individuals differ in the extent to which they have each of these abilities. Not surprisingly, there is also little relationship among them: a high score on one is no assurance of a high score on others. High employee performance is likely to be achieved when management has ascertained the extent to which a job requires each of the nine abilities and then ensures that employees in that job have those abilities.

Sergey Ryzhov / Shutterstock

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Being a firefighter is one of the most physically demanding jobs in the world. As a part of the selection process to be a firefighter in the UK the candidate must pass physical tests including climbing ladders in full personal protective equipment, dragging a 55kg ‘casualty’ backwards around a 30-metre course, carrying equipment over distances of 100 metres within certain time limits and crawling through enclosed spaces.

Table 2.3  Nine basic physical abilities Ability

Description

Strength factors 1. Dynamic strength 2. Trunk strength 3. Static strength 4. Explosive strength

Ability to exert muscular force repeatedly or continuously over time Ability to exert muscular strength using the trunk (particularly abdominal) muscles Ability to exert force against external objects Ability to expend a maximum of energy in one or a series of explosive acts

Flexibility factors 5. Extent flexibility 6. Dynamic flexibility

Ability to move the trunk and back muscles as far as possible Ability to make rapid, repeated flexing movements

Other factors 7. Body coordination 8. Balance 9. Stamina

Ability to coordinate the simultaneous actions of different parts of the body Ability to maintain equilibrium despite forces pulling off balance Ability to continue maximum effort requiring prolonged effort over time

Implementing diversity management strategies   47

The role of disabilities The importance of ability at work obviously creates problems when we attempt to formulate workplace policies that recognize diversity in terms of disability status. As we have noted, recognizing that individuals have different abilities that can be taken into account when making hiring decisions is not problematic. However, it is discriminatory to make blanket assumptions about people on the basis of a disability. It is also possible to make accommodations for disabilities.

Implementing diversity management strategies diversity management The process and programmes by which managers make everyone more aware of and sensitive to the needs and differences of others.

Having discussed a variety of ways in which people differ, we now look at how a manager can and should manage these differences. Diversity management makes everyone more aware of and sensitive to the needs and differences of others. This definition highlights the fact that diversity programmes include and are meant for everyone. Diversity is much more likely to be successful when we see it as everyone’s business than if we believe it helps only certain groups of employees.

Attracting, selecting, developing and retaining diverse employees One method of enhancing workforce diversity is to target recruiting messages to specific demographic groups underrepresented in the workforce. This means placing advertisements in publications geared towards specific demographic groups; recruiting at colleges, universities and other institutions with significant numbers of underrepresented minorities; and forming partnerships with associations like the Society for Women Engineers. Research has shown that women and minorities do have greater interest in employers that make special efforts to highlight a commitment to diversity in their recruiting materials. Diversity advertisements that fail to show women and minorities in positions of organiz­ ational leadership send a negative message about the diversity climate at an organization.61 Of course, in order to show the pictures, organizations must have diversity in their management ranks. Some companies have been actively working towards recruiting less-represented groups. Google, for instance, has been making sure female candidates meet other women during interviews and offering family benefits that may appeal to them.62 Etsy, an online retailer, hosts engineering classes, provides grants for aspiring women coders, then hires the best.63 McKinsey & Co and Bain & Co. have similarly been actively recruiting women who left the workforce to start families by offering phase-in programmes and other benefits.64 The selection process is one of the most important places to apply diversity efforts. Managers who hire need to value fairness and objectivity in selecting employees and focus on the productive potential of new recruits. When managers use a well-defined protocol for assessing applicant talent and the organization clearly prioritizes nondiscrimination policies, qualifications become far more important in determining who gets hired than demographic characteristics.65 Similarity in personality appears to affect career advancement. Those whose personality traits are similar to those of their co-workers are more likely to be promoted than those whose personalities are different.66 There’s an important qualifier to these results: in collectivistic cultures, similarity to supervisors is more important for predicting advancement, whereas in individualistic cultures, similarity to peers is more important. As we mentioned before, individuals who are demographically different from their co-workers may be more likely to feel low commitment and to turn over, but a positive diversity

48  2 Diversity in organizations

climate can be helpful. Many diversity training programmes are available to employers, and research efforts are focusing on identifying the most effective initiatives. It seems that the best programmes are inclusive in their design and implementation.67

Diversity in groups Most contemporary workplaces require extensive work in group settings. When people work in groups, they need to establish a common way of looking at and accomplishing the major tasks, and they need to communicate with one another often. If they feel little sense of membership and cohesion in their groups, all these group attributes are likely to suffer. Does diversity help or hurt group performance? The answer is ‘yes’. In some cases, diversity in traits can hurt team performance, whereas in others it can facilitate it.68 Whether diverse or homogeneous teams are more effective depends on the characteristic of interest. Demographic diversity (in gender and race) does not appear to either help or hurt team performance in general. On the other hand, teams of individuals who are highly intelligent, conscientious and interested in working in team settings are more effective. Thus, diversity on these variables is likely to be a bad thing – it makes little sense to try to form teams that mix in members who are lower in intelligence, conscientiousness and uninterested in teamwork. In other cases, differences can be a strength. Groups of individuals with different types of expertise and education are more effective than homogeneous groups. Similarly, a group made entirely of assertive people who want to be in charge, or a group whose members all prefer to follow the lead of others, will be less effective than a group that mixes leaders and followers. Regardless of the composition of the group, differences can be leveraged to achieve superior performance. The most important way is to emphasize the higher-level similarities among members.69 In other words, groups of diverse individuals will be much more effective if leaders can show how members have a common interest in the group’s success. Evidence also shows transformational leaders (who emphasize higher-order goals and values in their leadership style) are more effective in managing diverse teams.70

Effective diversity programmes 6  Describe how organizations manage diversity effectively.

Organizations use a variety of efforts to capitalize on diversity, including the recruiting and selection policies we have already discussed, as well as training and development practices. Effective, comprehensive workforce programmes encouraging diversity have three distinct components. First, they teach managers about the legal framework and encourage fair treatment of all people regardless of their demographic characteristics. Second, they teach managers how a diverse workforce will be better able to serve a diverse market of customers and clients. Third, they foster personal development practices that bring out the skills and abilities of all workers, acknowledging how differences in perspective can be a valuable way to improve performance for everyone.71 A major study of the consequences of diversity programmes came to what might seem a surprising conclusion.72 Organizations that provided diversity training were not consistently more likely to have women and minorities in upper management positions than organizations that did not. On closer examination though, these results are not surprising. Experts have long known that one-shot training sessions without strategies to encourage effective diversity management back on the job are not likely to be very effective. Some diversity programmes are truly effective in improving representation in management. They include strategies to measure the representation of women and minorities in managerial positions, and they hold managers accountable for achieving more demographically diverse management teams. Researchers also suggest that diversity experiences are more likely to lead to positive adaptation for all parties if (1) the diversity experience undermines stereotypical attitudes, (2) if the perceiver is motivated and able to consider a new perspective on others, (3) if the perceiver engages in stereotype suppression and generative thought in response to the diversity experience, and (4) if the positive experience of stereotype undermining is repeated frequently.73

Implementing diversity management strategies   49

EMPLOYABILITY AND DIVERSITY When seeking employment or looking to further develop your career, employers are increasingly valuing people who understand how to make the most of all employees’ contributions. But what if you experience diversity yourself? Perhaps through ethnicity, age, disability, or something else. The soft skills you gain by managing your experience of diversity are important. It can be valuable to incorporate relevant examples into your job applications or appraisals. But remember it is up to you. Declaring the details of a disability or particular circumstance to an employer is not usually necessary except in specific circumstances. Consider the following story of James describing his lifelong experience of being physically disabled:

others. The day-to-day activities other kids took for granted were all more difficult for me. At first I would try and fail, and then try again. Eventually my days at school were much like the other kids. When I started work, the same rules applied. I learnt to do things for myself. I believe I can bring out the best in my colleagues by showing them that even when something seems hard, it can be done. The work-relevant skills James can demonstrate from his experience are, for example, tenacity, initiative, problem-solving and an ability to inspire others.

From an early age I knew I wanted to do things for myself. Although they didn’t mind, I hated relying on

Diversity programmes based on these principles are likely to be more effective than traditional classroom learning. Organizational leaders should examine their workforce to determine whether target groups have been underutilized. If groups of employees are not proportionally represented in top management, managers should look for any hidden barriers to advancement. They can often improve recruiting practices, make selection systems more transparent and provide training for those employees who have not had adequate exposure to certain material in the past. The organization should also clearly communicate its policies to employees so they can understand how and why certain practices are followed. Communications should focus as much as possible on qualifications and job performance; emphasizing certain groups as needing more assistance could well backfire. A case study of the multinational Finnish company TRANSCO found it was possible to develop a consistent global philosophy for diversity management. However, differences in legal and cultural factors across nations forced TRANSCO to develop unique policies to match the cultural and legal frameworks of each country in which it operated.74

Company diversity policies

FACE THE FACTS an integration of diversity into the company’s overall corporate social responsibility policy (60 per cent), more respectful behaviour patterns (47 per cent), fewer conflicts among staff arising from differences in culture, age, etc. (46 per cent) to attracting and retaining talented people (46 per cent).

According to European Commission Research of 1,826 organizations across the EU: ●

●

The main focus of companies’ diversity initiatives was on gender equality (48 per cent) followed by generations (46  per cent for senior, 45 per cent for young people), ­disability (44 per cent) and racial or ethnic background (28 per cent). However, the priorities change substantially from country to country. Since the implementation of diversity policies most respondents surveyed noticed considerable improvements in different areas. The positive effects range from

●

One out of four companies said that diversity had an impact on their overall business performance.

Source: European Commission, Overview of Diversity Management: implementation and impact amongst Diversity Charter signatories in the European Union (2014), October 2014.

50  2 Diversity in organizations

SUMMARY This chapter looked at diversity from many perspectives. We paid particular attention to three variables – biographical characteristics, ability and diversity programmes. Diversity management must be an ongoing commitment that crosses all levels of the organization. Policies to improve the climate for diversity can be effective, so long as they are designed to acknowledge all employees’ perspectives.

IMPLICATIONS FOR MANAGERS ●

● ●

●

●

Understand your organization’s anti-discrimination policies thoroughly and share them with your employees. Assess and challenge your stereotype beliefs to increase your objectivity. Look beyond readily observable biographical characteristics and consider the individual’s capabilities before making management decisions. Fully evaluate what accommodations a person with disabilities will need and then fine-tune a job to that person’s abilities. Seek to understand and respect the unique biographical characteristics of your employees; a fair but individualistic approach yields the best performance.

Men have more mathematical ability than women

POINT/COUNTERPOINT

POINT Harvard’s Larry Summers was forced to resign from his job as president of the university for claiming that women have different abilities than men, but there is some truth to the claim. Evidence reliability indicates significant gender differences in mathematical test scores. To be sure, there are many, many women whose mathematical and scientific prowess far surpasses that of many men. The distributions overlap to a considerable degree. It is also true that most research shows that overall intelligence doesn’t differ between genders: women are as smart as men. But the fact of the matter is, the way in which men and women are smart is, on average, different. Women tend to have significantly higher scores on verbal ability measures and men tend to have significantly higher scores on measures of mathematical ability. Many sociologists and educational psychologists argue that these differences are explained by socialization: boys are socialized towards and rewarded for mathematical prowess,

whereas girls are pointed towards and expected to excel in writing and reading. These socialization arguments, however, ignore some cold, hard truths that have been uncovered in the latest research. We know from neural imaging research that men’s and women’s brains differ. Men tend to show higher activation in the area of the brain responsible for mathematical and for spatial operations. Women, in contrast, tend to have better bilateral communication (the right and left sides of their brain communicate better), which is vital to reading comprehension and written and oral expression. Do we really think a child’s teacher caused these differences? No reasonable person suggests that boys and girls should be steered into different occupations based on these findings. Men and women should pursue the occupations that suit their abilities and that they will find rewarding. But should our pursuit of egalitarianism blind us to scientific findings that suggest the obvious: men and women are not exactly alike?

experiental exercise   51

COUNTERPOINT Women make up about half the new entrants in the professions of law, medicine and dentistry. They are the vast majority of veterinarians. Yet they remain woefully underrepresented in science, mathematics and technology positions. For example, only about one in five of recent entrants into engineering graduate programmes are women, and in natural sciences and computer science departments at the top universities, fewer than one in ten tenured professors are women. If women are at such a disadvantage in terms of maths and science abilities, why are they better represented in some occupations than others? Differing motivations produced by teacher and parent expectations are the answer. If we think women aren’t natural engineers, then we learn to steer girls away from such career choices. It is true there are gender differences in maths test scores, but those differences are not large. And often ignored is a widely documented phenomenon: among the very young, girls outperform boys on mathematics (as well as on other)

tests. By adolescence, this advantage reverses and boys outperform girls. If socialization and school experiences do not explain this result, what does? Moreover, we know that a large part of the reason fewer women enter science, technology, engineering and mathematical (STEM) positions is not ability but motivation. Research indicates that women perceive careers in STEM fields to be less interpersonally fulfilling, and this explains their gravitation towards other fields. If we are concerned about gender differences in participation in these fields, we need to be concerned with the motivational effects of these perceptions, not with any presumed differences in male and female abilities. Sources: A. B. Diekman, E. R. Brown, A. M. Johnston and E. K. Clark, ‘Seeking congruity between goals and roles: a new look at why women opt out of science, technology, engineering, and mathematics careers’, Psychological Science, 21, 8 (2010), pp. 1051–57; S. J. Ceci and W. Williams, ‘Sex differences in math-intensive fields’, Current Directions in Psychological Science, 19, 5 (2010), pp. 275–79; and J. Tierney, ‘Legislation won’t close gender gap in sciences’, New York Times, 14 June 2010, pp. 1–4.

QUESTIONS FOR REVIEW 1. What are the two major forms of workforce diversity?

4. What is intellectual ability and how is it relevant to OB?

2. What are stereotypes and how do they function in

5. How can you contrast intellectual and physical ability?

organizational settings?

6. How do organizations manage diversity effectively?

3. What are the key biographical characteristics and how

are they relevant to OB?

EXPERIENTIAL EXERCISE FEELING EXCLUDED This six-step exercise takes approximately 20 minutes.

Individual work (Steps 1 and 2) 1. All participants are asked to recall a time when they have

felt uncomfortable or targeted because of their demographic status. Ideally, situations at work should be used, but if no work situations come to mind, any situation will work. Encourage students to use any demographic characteristic they think is most appropriate, so they can write about feeling excluded on the basis of race, ethnicity, gender, age, disability status, religion, or any other characteristic. They should briefly describe the situation, what precipitated the event, how they felt at the time, how they reacted and how they believe the other party could have made the situation better.

2. The instructor asks the students to then think about

a time when they might have either deliberately or accidentally done something that made someone ­ else feel excluded or targeted because of their demographic status. Once again, they should briefly describe the situation, what precipitated the event, how they felt at the time, how the other person reacted and how they could have made the situation better.

Small groups (Steps 3 and 4) 3. Once everyone has written their descriptions, divide the

class into small groups of not more than four people. If at all possible, try to compose groups that are somewhat demographically diverse, to avoid intergroup

52  2 Diversity in organizations

conflicts in the class review discussion. Students should be encouraged to discuss their situations and consider how their experiences were similar or different. 4. After reading through everyone’s reactions, each group

should develop a short list of principles for how they personally can avoid excluding or targeting people in the future. Encourage them to be as specific as possible, and also ask each group to find solutions that work for everyone. Solutions should focus on both avoiding these situations in the first place and resolving them when they do occur.

Class review (Steps 5 and 6) 5. Members of each group are invited to provide a very

brief summary of the major principles of how they’ve felt excluded or targeted, and then to describe their groups’ collective decisions regarding how these situations can be minimized in the future. 6. The instructor should lead a discussion on how

companies might be able to develop comprehensive policies that will encourage people to be sensitive in their interactions with one another.

ETHICAL DILEMMA BOARD QUOTAS That women are underrepresented on boards of directors is an understatement. In the United States, only 15 per cent of board members among the Fortune 500 are women. Among the 100 largest companies in Great Britain, women hold approximately 12 per cent of board seats, a representation that has changed little over the past five years. In the European Union (EU) more generally, only about 10 per cent of the directors of the 300 largest companies are women. In China and India, the figure is roughly half that. In response to such underrepresentation, many EU countries – including France, Spain and Norway – have instituted compulsory quotas for female representation on boards. Great Britain has guidelines and recommendations. A 2011 official British government report recommended that women make up at least 25 per cent of the boards of the largest British companies. Under the recommended guidelines, companies would be required to announce their board composition goals to their shareholders and state clearly how they plan on meeting them. Norway and France have passed laws that require large companies to fill at least 40 per cent

The Flynn effect Given that a substantial amount of intellectual ability is inherited, it might surprise you to learn that intelligence test scores are rising. In fact, scores have risen so dramatically that today’s great-grandparents seem mentally deficient by comparison. First, let’s review the evidence for rising test scores. Then we’ll review explanations for the results. On an IQ scale where 100 is the average, scores have been rising about 3 points per decade, meaning if your g­ randparent

of board seats with female members. Spain has a similar quota in place.

Questions 1. Given that women participate in the labour force in

roughly the same proportion as men, why do you think women occupy so few seats on boards of directors? 2. Do you agree with the quotas established in many EU

countries? Why or why not? 3. Beyond legal remedies, what do you think can be done

to increase women’s representations on boards of directors? 4. One recent study found no link between female

representation on boards of directors and these companies’ corporate sustainability or environmental policies. The study’s author expressed surprise at the findings. Do the findings surprise you? Why or why not? Sources: J. Werdigier, ‘In Britain, a push for more women on boards of large companies’, New York Times, 25 February 2011, p. B3; and J. Galbreath, ‘Are there gender-related influences on corporate sustainability? A study of women on boards of directors’, Journal of Management & Organization, 17, 1 (2011), pp. 17–38.

CASE INCIDENT 1 scored 100, the average score for your generation would be around 115. That’s a pretty big difference – about a standard deviation, meaning someone from your grandparent’s generation whose score was at the 84th percentile would be only average (50th percentile) by today’s norms. James Flynn is a New Zealand researcher credited with first documenting the rising scores. He reported the results in 1984, when he found that almost everyone who took a

Case incident 2   53

well-validated IQ test in the 1970s did better than those who took one in the 1940s. The results appear to hold up across cultures. Test scores are rising in most countries in which the effect has been tested. What explains the Flynn effect? Researchers are not entirely sure, but some of the explanations offered are these:

1. Education. Students today are better educated than their ancestors, and education leads to higher test scores.

2. Smaller families. In 1900, the average couple had four children; today the number is fewer than two. We know firstborns tend to have higher IQs than other children, probably because they receive more attention than their later-born siblings.

­ ominant, they win out, meaning the child’s IQ will be as d high as or higher than those of the parents. Despite the strong heritability of IQ, researchers continue to pursue mechanisms that might raise IQ scores. Factors like brain exercises (even video games) and regular physical exercise seem to at least temporarily boost brain power. Other recent research in neuroscience has had difficulty pinpointing physical mechanisms that can lead to a boost in IQ, although researchers propose that a focus on brain chemicals like dopamine may lead, in time, to drugs that can boost IQ chemically.

Questions

3. Test-taking savvy. Today’s children have been tested so

1. Do you believe people are really getting smarter? Why or

often that they are test-savvy: they know how to take tests and how to do well on them.

2. Which of the factors explaining the Flynn effect do you accept?

4. Genes. Although smart couples tend to have fewer, not

3. If the Flynn effect is true, does this undermine the theory

more, children (which might lead us to expect intelligence in the population to drop over time), it’s possible that due to better education, tracking and testing, those who do have the right genes are better able to exploit those advantages. Some genetics researchers also have argued that if genes for intelligence carried by both parents are

why not?

that IQ is mostly inherited? Why or why not? Sources: Based on S. Begley, ‘Sex, race, and IQ: off limits?’, Newsweek, 20 April 2009, www.newsweek.com; M. A. Mingroni, ‘Resolving the IQ paradox: heterosis as a cause of the Flynn effect and other trends’, Psychological Review, July 2007, pp. 806–29; and S. Begley, ‘Can you build a better brain?’, Newsweek, 10 January 2011, www.newsweek.com.

Increasing age diversity in the workplace Over the past century, the average age of the workforce has continually increased as medical science continues to enhance longevity and vitality. The fastest-growing segment of the workforce is individuals over the age of 55. Recent medical research is exploring techniques that could extend human life to 100 years or more. In addition, the c­ ombination of laws prohibiting age discrimination and elimination of defined-benefit pension plans means that many individuals continue to work well past the traditional age of retirement. Unfortunately, older workers face a variety of discrimin­ atory attitudes in the workplace. Researchers scanned more than 100 publications on age discrimination to determine what types of age stereotypes were most prevalent across studies. They found that stereotypes suggested job performance declined with age, counter to empirical evidence presented earlier in this chapter that relationships between age and core task performance are essentially nil. Stereotypes also suggest that older workers are less adaptable, less flexible and incapable of learning new concepts. Research, on the other hand, suggests they are capable of learning and adapting to new situations when these are framed appropriately. Organizations can take steps to limit age discrimination and ensure that employees are treated fairly regardless of age. Many of the techniques to limit age discrimination come down to fundamentally sound management practices

CASE INCIDENT 2

relevant for all employees: set clear expectations for performance, deal with problems directly, communicate with workers frequently, and follow clear policies and procedures consistently. In particular, management professionals note that clarity and consistency can help ensure all employees are treated equally regardless of age.

Questions 1. What changes in employment relationships are likely to occur as the population ages?

2. Do you think increasing age diversity will create new challenges for managers? What types of challenges do you expect will be most profound?

3. How can organizations cope with differences related to age discrimination in the workplace?

4. What types of policies might lead to charges of age discrimination, and how can they be changed to eliminate these problems? Sources: Based on D. Stipp, ‘The anti-aging revolution’, Fortune, 14 June 2010, pp. 124–30; R. A. Posthuma and M. A. Campion, ‘Age stereotypes in the workplace: common stereotypes, moderators, and future research directions’, Journal of Management, 35 (2009), pp. 158–88; and H. Perlowski, ‘With an aging workforce, a rising risk of discrimination claims’, Workforce Management Online, July 2008, www.workforce.com.

54  2 Diversity in organizations

ENDNOTES  1 Eurofound, Fifth European Working Conditions Survey (Luxembourg: Publications Office of the European Union, 2012); eurostat, http://ec.europa.eu/eurostat/   2 D. A. Harrison, K. H. Price, J. H. Gavin and A. T. Florey, ‘Time, teams, and task performance: changing effects of surface and deep-level diversity on group functioning’, Academy of Management Journal, 45, 5 (2002), pp. 1029–45; and A. H. Eagly and J. L. Chin, ‘Are memberships in race, ethnicity, and gender categories merely surface characteristics?’, American Psychologist, 65 (2010), pp. 934–5.   3 P. Chattopadhyay, M. Tluchowska and E. George, ‘Identifying the ingroup: a closer look at the influence of demographic dissimilarity on employee social identity’, Academy of Management Review, 29, 2 (2004), pp. 180–202; and P. Chattopadhyay, ‘Beyond direct and symmetrical effects: the influence of demographic dissimilarity on organizational citizenship behavior’, Academy of Management Journal, 42, 3 (1999), pp. 273–87.   4 L. M. Cortina, ‘Unseen injustice: incivility as modern discrimination in organizations’, Academy of Management Review, 33, 1 (2008), pp. 55–75.   5 See eurostat, http://ec.europa.eu/eurostat/  6 Max Nisen, ‘Why McDonald’s is recruiting grandparents to work alongside their grandchildren in Europe’, Quartz, 31 March 2014. Available at http://qz.com/193591/mcdonalds-is-recruitinggrandparents-to-work-alongside-their-grandchildren-in-europe/; Jane Simms, ‘Diversity: are you discriminating against older workers?’, People Management CIPD, 29 January 2014. Available at http://www.cipd.co.uk/pm/peoplemanagement/b/weblog/ archive/2014/01/29/diversity-are-you-discriminating-against-­ older-workers.aspx  7 K. A. Wrenn and T. J. Maurer, ‘Beliefs about older workers’ learning and development behavior in relation to beliefs about malleability of skills, age-related decline, and control’, Journal of Applied Social Psychology, 34, 2 (2004), pp. 223–42; and R. A. Posthuma and M. A. Campion, ‘Age stereotypes in the workplace: common stereotypes, moderators, and future research directions’, Journal of Management, 35 (2009), pp. 158–88.   8 T. W. H. Ng and D. C. Feldman, ‘Re-examining the relationship between age and voluntary turnover’, Journal of Vocational Behavior, 74 (2009), pp. 283–94.   9 T. W. H. Ng and D. C. Feldman, ‘The relationship of age to ten dimensions of job performance’, Journal of Applied Psychology, 93 (2008), pp. 392–423. 10 T. W. H. Ng and D. C. Feldman, ‘Evaluating six common stereotypes about older workers with meta-analytical data’, Personnel Psychology, 65 (2012), pp. 821–58.

desire for learning and development’, Research in Personnel and Human Resources Management, 22 (2003), pp. 253–85. 15 J. A. Colquitt, J. A. LePine and R. A. Noe, ‘Toward an integrative theory of training motivation: a meta-analytic path analysis of 20 years of research’, Journal of Applied Psychology, 85, 5 (2000), pp. 678–707. 16 S. Begley, ‘The upside of aging’, New York Times, 16 February 2007, pp. W1, W4. 17 P. L. Roth, K. L. Purvis and P. Bobko, ‘A meta-analysis of gender group differences for measures of job performance in field studies’, Journal of Management, March 2012, pp. 719–39. 18 See E. M. Weiss, G. Kemmler, E. A. Deisenhammer, W. W. Fleischhacker and M. Delazer, ‘Sex differences in cognitive functions’, Personality and Individual Differences, September 2003, pp. 863–75; and A. F. Jorm, K. J. Anstey, H. Christensen and B. Rodgers, ‘Gender differences in cognitive abilities: the mediating role of health state and health habits’, Intelligence, January 2004, pp. 7–23. 19 K. Peters, M. Ryan, S. A. Haslam and H. Fernandes, ‘To belong or not to belong: evidence that women’s occupational disidentification is promoted by lack of fit with masculine occupational prototypes’, Journal of Personnel Psychology, 2 (2012), pp. 148–58. 20 R. E. Silverman, ‘Study suggests fix for gender bias on the job’, Wall Street Journal, 9 January 2013, p. D4. 21 E. B. King et al., ‘Benevolent sexism at work: gender differences in the distribution of challenging developmental experiences’, Journal of Management, November 2012, pp. 1835–66. 22 M. E. Heilman and T. G. Okimoto, ‘Why are women penalized for success at male tasks? The implied communality deficit’, Journal of Applied Psychology 92, 1 (2007), pp. 81–92. 23 See, for instance, J. Bussey, ‘How women can get ahead: advice from female CEOs’, Wall Street Journal, 18 May 2012, pp. B1– B2; T. Gara, ‘Sandberg opens up on women and work’, Wall Street Journal, 6 February 2013; and L. Petrecca, ‘High-paying careers top more young women’s lists’, Wall Street Journal, 20 April 2012, pp. 1A–2A. 24 D. R. Avery, P. F. McKay and D. C. Wilson, ‘What are the odds? How demographic similarity affects the prevalence of perceived employment discrimination’, Journal of Applied Psychology, 93 (2008), pp. 235–49. 25 A. Damast, ‘She works hard for less money’, Bloomberg Businessweek, 24 December 2012–6 January 2013, pp. 31–2. 26 B. Casselman, ‘Male nurses earn more’, Wall Street Journal, 26 February 2013, p. A2.

11 See Ng and Feldman, ‘The relationship of age to ten dimensions of job performance’, Personnel Psychology, 65 (2008), pp. 821–58.

27 M. A. Belliveau, ‘Engendering inequity? How social accounts create vs. merely explain unfavorable pay outcomes for women’, Organization Science, July–August 2012, pp. 1154–74.

12 T. W. H. Ng and D. C. Feldman, ‘The relationship of age with job attitudes: a meta-analysis’, Personnel Psychology, 63 (2010), pp. 677–718.

28 A. J. C. Cuddy, ‘Increasingly, juries are taking the side of women who face workplace discrimination’, Harvard Business Review, September 2012, pp. 95–100.

13 F. Kunze, S. A. Boehm and H. Bruch, ‘Age diversity, age discrimination climate and performance consequences – a cross organizational study’, Journal of Organizational Behavior, 32 (2011), pp. 264–90.

29 J. L. Raver and L. H. Nishii, ‘Once, twice, or three times as harmful? Ethnic harassment, gender harassment, and generalized workplace harassment’, Journal of Applied Psychology, 95 (2010), pp. 236–54.

14 T. Maurer, K. Wrenn and E. Weiss, ‘Toward understanding and managing stereotypical beliefs about older workers’ ability and

30 M. Bamshad and S. Olson, ‘Does race exist?’, Scientific American Magazine, November, 2003, p. 10.

ENDNOTES   55 31 P. Riach and J. Rich, ‘Field experiments of discrimination in the market place’, Economic Journal, November 2002, pp. F480– F518. 32 J. M. Sacco, C. R. Scheu, A. M. Ryan and N. Schmitt, ‘An investigation of race and sex similarity effects in interviews: a multilevel approach to relational demography’, Journal of Applied Psychology, 88, 5 (2003), pp. 852–65; and G. N. Powell and D. A. Butterfield, ‘Exploring the influence of decision makers’ race and gender on actual promotions to top management’, Personnel Psychology, 55, 2 (2002), pp. 397–428. 33 Equal Opportunities Review, ‘Businesses urged to shape up on race’, Equal Opportunities Review, 90 (March–April 2000). 34 National Audit Office, ‘Ethnic minority employment gap costs economy £8.6 billion’, Equal Opportunities Review, 174 (March 2008), p. 44. 35 Avery, McKay and Wilson, ‘What are the odds? How demographic similarity affects the prevalence of perceived employment discrimination’; and Raver and Nishii, ‘Once, twice, or three times as harmful? Ethnic harassment, gender harassment, and generalized workplace harassment.’

49 Fourth European Working Conditions Survey (European Foundation for the Improvement of Living and Working Conditions, 2007). Available at http://www.eurofound.europa.eu; see CIPD, Race, Religion, and Employment Factsheet, 2007; and CIPD, Diversity: An Overview. Available at http://www.cipd.co.uk/ subjects/dvsequl/general. 50 R. Donadio, ‘Stuck in recession, Italy takes on labor laws that divide the generations’, New York Times, 19 March 2012, pp. A4, A6. 51 P. A. Freund and N. Kasten, ‘How smart do you think you are? A meta-analysis of the validity of self-estimates of cognitive ability’, Psychological Bulletin, 138 (2012), pp. 296–321. 52 R. E. Nisbett et al., ‘Intelligence: new findings and theoretical developments’, American Psychologist, February–March 2012, pp. 130–59. 53 L. S. Gottfredson, ‘The challenge and promise of cognitive career assessment’, Journal of Career Assessment, 11, 2 (2003), pp. 115–35. 54 M. D. Dunnette, ‘Aptitudes, abilities, and skills’, in M. D. Dunnette (ed.), Handbook of Industrial and Organizational Psychology (Chicago: Rand McNally, 1976), pp. 478–83.

36 B. R. Ragins, J. A. Gonzalez, K. Ehrhardt and R. Singh, ‘Crossing the threshold: the spillover of community racial diversity and diversity climate to the workplace’, Personnel Psychology, 65 (2012), pp. 755–87.

55 J. W. B. Lang, M. Kersting, U. R. Hülscheger and J. Lang, ‘General mental ability, narrower cognitive abilities, and job performance: the perspective of the nested-factors model of cognitive abilities’, Personnel Psychology, 63 (2010), pp. 595–640.

37 P. F. McKay, D. R. Avery and M. A. Morris, ‘Mean racial–ethnic differences in employee sales performance: the moderating role of diversity climate’, Personnel Psychology, 61, 2 (2008), pp. 349–74.

56 N. Barber, ‘Educational and ecological correlates of IQ: a cross-national investigation’, Intelligence, May–June 2005, pp. 273–84.

38 See European Commission http://ec.europa.eu/ 39 See eurostat http://ec.europa.eu/eurostat/statistics-explained/ index.php/Disability_statistics_-_labour_market_access 40 L. R. Ren, R. L. Paetzold and A. Colella, ‘A meta-analysis of experimental studies on the effects of disability on human resource judgments’, Human Resource Management Review, 18, 3 (2008), pp. 191–203. 41 S. Almond and A. Healey, ‘Mental health and absence from work: new evidence from the UK Quarterly Labour Force Survey’, Work, Employment, and Society, 17, 4 (2003), pp. 731–42. 42 B. S. Bell and K. J. Klein, ‘Effect of disability, gender, and job level on ratings of job applicants’, Rehabilitation Psychology, 46, 3 (2001), pp. 229–46; and E. Louvet, ‘Social judgment toward job applicants with disabilities: perception of personal qualities and competences’, Rehabilitation Psychology, 52, 3 (2007), pp. 297–303. 43 T. W. H. Ng and D. C. Feldman, ‘Organizational tenure and job performance’, Journal of Management, 36 (2010), pp. 1220–50. 44 I. R. Gellatly, ‘Individual and group determinants of employee absenteeism: test of a causal model’, Journal of Organizational Behavior, September 1995, pp. 469–85. 45 R. W. Griffeth, P. W. Hom and S. Gaertner, ‘A meta-analysis of antecedents and correlates of employee turnover: update, moderator tests, and research implications for the next millennium’, Journal of Management, 26, 3 (2000), pp. 463–88. 46 M. R. Barrick and R. D. Zimmerman, ‘Hiring for retention and performance’, Human Resource Management, 48 (2009), pp. 183–206. 47 W. van Breukelen, R. van der Vlist and H. Steensma, ‘Voluntary employee turnover: combining variables from the “traditional” turnover literature with the theory of planned behavior’, Journal of Organizational Behavior, 25,7 (2004), pp. 893–914. 48 M. Murphy, ‘Employers face legal tests over religious beliefs’, Financial Times, 25 May 2008.

57 M. E. Beier and F. L. Oswald, ‘Is cognitive ability a liability? A critique and future research agenda on skilled performance’, Journal of Experimental Psychology: Applied, 18 (2012), pp. 331–45. 58 J. F. Salgado, N. Anderson, S. Moscoso, C. Bertua, F. de Fruyt and J. P. Rolland, ‘A meta-analytic study of general mental ability validity for different occupations in the European Community’, Journal of Applied Psychology, December 2003, pp. 1068–81; and F. L. Schmidt and J. E. Hunter, ‘Select on intelligence’, in E. A. Locke (ed.), Handbook of Principles of Organizational Behavior (Malden, MA: Blackwell, 2004). 59 Y. Ganzach, ‘Intelligence and job satisfaction’, Academy of Management Journal, 41, 5 (1998), pp. 526–39; and Y. Ganzach, ‘Intelligence, education, and facets of job satisfaction’, Work and Occupations, 30, 1 (2003), pp. 97–122. 60 J. J. Caughron, M. D. Mumford and E. A. Fleishman, ‘The Fleishman Job Analysis Survey: development, validation, and applications’, in M. A. Wilson, W. Bennett Jr, S. G. Gibson and G. M. Alliger (eds), The Handbook of Work Analysis: Methods, Systems, Applications and Science of Work Measurement in Organizations (New York: Routledge/Taylor & Francis Group, 2012); P. D. Converse, F. L. Oswald, M. A. Gillespie, K. A. Field and E. B. Bizot, ‘Matching individuals to occupations using abilities and the O*Net: issues and an application in career guidance’, Personnel Psychology, Summer 2004, pp. 451–87; and E. A. Fleishman, ‘Evaluating physical abilities required by jobs’, Personnel Administrator, June 1979, pp. 82–92. 61 D. R. Avery, ‘Reactions to diversity in recruitment advertising: are the differences black and white?’, Journal of Applied Psychology, 88,4 (2003), pp. 672–9; P. F. McKay and D. R. Avery ‘What has race got to do with it? Unraveling the role of racioethnicity in job seekers’ reactions to site visits’, Personnel Psychology, 59, 2 (2006), pp. 395–429; and D. R. Avery and P. F. McKay, ‘Target practice: an organizational impression management approach to attracting minority and female job applicants’, Personnel Psychology, 59, 1 (2006), pp. 157–87.

56  2 Diversity in organizations 62 C. C. Miller, ‘Google search and replace’, New York Times, 23 August 2012, pp. B1, B5. 63 A. Overholt, ‘More women coders’, Fortune, 25 February 2013, p. 14. 64 L. Kwoh, ‘McKinsey tries to recruit mothers who left the fold’, Wall Street Journal, 20 February 2013, pp. B1, B7. 65 M. R. Buckley, K. A. Jackson, M. C. Bolino, J. G. Veres and H. S. Field, ‘The influence of relational demography on panel interview ratings: a field experiment’, Personnel Psychology, 60 (2007), pp. 627–46; J. M. Sacco, C. R. Scheu, A. M. Ryan and N. Schmitt, ‘An investigation of race and sex similarity effects in interviews: a multilevel approach to relational demography’, Journal of Applied Psychology, 88 (2003), pp. 852–65; and J. C. Ziegert and P. J. Hanges, ‘Employment discrimination: the role of implicit attitudes, motivation, and a climate for racial bias’, Journal of Applied Psychology, 90 (2005), pp. 553–62. 66 J. Schaubroeck and S. S. K. Lam, ‘How similarity to peers and supervisor influences organizational advancement in different cultures’, Academy of Management Journal, 45 (2002), pp. 1120–36. 67 K. Bezrukova, K. A. Jehn and C. S. Spell, ‘Reviewing diversity training: where we have been and where we should go’, Academy of Management Learning & Education, 2 (2012), pp. 207–27. 68 S. T. Bell, ‘Deep-level composition variables as predictors of team performance: a meta-analysis’, Journal of Applied Psychology, 92, 3 (2007), pp. 595–615; S. K. Horwitz and I. B. Horwitz, ‘The effects of team diversity on team outcomes: a meta-analytic review of team demography’, Journal of Management, 33, 6 (2007), pp.  987–1015; G. L. Stewart, ‘A meta-analytic review of relationships between team design features and team p ­ erformance’,

Journal of Management, 32, 1 (2006), pp. 29–54; and A. Joshi and H. Roh, ‘The role of context in work team diversity research: a meta-analytic review’, Academy of Management Journal, 52, 3 (2009), pp. 599–627. 69 A. C. Homan, J. R. Hollenbeck, S. E. Humphrey, D. Van Knippenberg, D. R. Ilgen and G. A. Van Kleef, ‘Facing differences with an open mind: openness to experience, salience of intragroup differences, and performance of diverse work groups’, Academy of Management Journal, 51, 6 (2008), pp. 1204–222. 70 E. Kearney and D. Gebert, ‘Managing diversity and enhancing team outcomes: the promise of transformational leadership’, Journal of Applied Psychology, 94, 1 (2009), pp. 77–89. 71 CC. L. Holladay and M. A. Quiñones, ‘The influence of training focus and trainer characteristics on diversity training effectiveness’, Academy of Management Learning and Education, 7, 3 (2008), pp. 343–54; and R. Anand and M. Winters, ‘A retrospective view of corporate diversity training from 1964 to the present’, Academy of Management Learning and Education, 7, 3 (2008), pp. 356–72. 72 A. Kalev, F. Dobbin and E. Kelly, ‘Best practices or best guesses? Assessing the efficacy of corporate affirmative action and diversity policies’, American Sociological Review, 71, 4 (2006), pp. 589–617. 73 R. J. Crisp and R. N. Turner, ‘Cognitive adaptation to the experience of social and cultural diversity’, Psychological Bulletin, 137 (2011), pp. 242–66. 74 A. Sippola and A. Smale, ‘The global integration of diversity management: a longitudinal case study’, International Journal of Human Resource Management, 18, 11 (2007), pp. 1895–916.

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CHAPTER 3 Attitudes and job satisfaction Learning objectives After studying this chapter, you should be able to: 1 Contrast the three components of an attitude. 2 Summarize the relationship between attitudes and behaviour. 3 Compare and contrast the major job attitudes. 4 define job satisfaction and show how it can be measured. 5 Summarize the main causes of job satisfaction. 6 Identify four employee responses to dissatisfaction. 7 Show whether job satisfaction is an important concept globally.

for success, attitude is equally important as ability. Walter Scott

THE MOST SATISFYING JOBS IN THE WORLD?

Shutterstock/Gemenacom

Given that working may take up around one half of our adult waking hours, it might be expected that we would actually be happy and satisfied with what we do. But the statistics seem to say otherwise. Although the figures differ greatly because of differing methodologies, the majority of research points to the fact that most of us are not completely satisfied with our work. Since job satisfaction is related to job performance, organizational citizenship behaviours, customer satisfaction, absenteeism, turnover and workplace deviance behaviours, improving employees’ job satisfaction makes good organizational sense. And for employees themselves, not having to drag ourselves out of bed every morning with a feeling of dread has obvious benefits. So which occupations consistently rate highly in job satisfaction surveys and what can we learn from them to make our own, and others’, jobs more satisfying?

Hair stylist It may be a surprise you that hairdressers regularly appear at, or very near, the top of ‘satisfying jobs’ lists. Interacting with clients, the opportunity to be creative, confidence in their technical skills, and above all, helping others feel good about their appearance, emerge from discussions with hairdressers as reasons why they find their job so satisfying.

Gardener Being outdoors, every day being different, therapeutic, being able to create the landscape, and working in the ‘most beautiful office in the world’ are what gardeners say keeps them happy.

Engineer Coming up with new designs and seeing them to reality, freedom, learning new skills daily, problem-solving, and ‘doing a job that’s also a hobby’ are all aspects of the job that satisfy engineers.

Medical practitioner Some of the responses from medical practitioners when quizzed about job satisfaction were improving patients’ quality of life, exciting, variety, rewarding, and making a difference. Other occupations that regularly appear near the top of job satisfaction lists are farm workers, beauticians, nurses and members of the clergy. But what about the unsatisfying jobs? Which jobs are amongst those with the lowest levels of job satisfaction? Publicans, basic construction jobs, debt collectors, industrial cleaners, and telephone sales people hold that unenviable accolade. But back to the other end of the list. What are the lessons we can learn from the hairstylists, gardeners, engineers and medical practitioners? Amongst others, variety, a sense of meaning in the work, autonomy and growth makes them happy. These are lessons that can be used to redesign jobs and create favourable attitudes. Instead of dreading a day at work and doing it ‘because I need to make a living’, employee’s attitudes can be changed to loving the job and doing it ‘because I want to’. Where is money in all of this? Surely a lot of money would make a job a lot more satisfying? Consider the occupations mentioned so far. The majority are not well paid. When discussing reasons why a job makes the person satisfied, money rarely comes up.

Sources: Barry Schwartz, 8 September 2015, ‘What’s the most satisfying job in the world? You’d be surprised’, see http://ideas.ted.com/whats-the-most-satisfyingjob-in-the-world-youd-be-surprised/; Donna Ferguson, 8 April 2015, ‘The World’s Happiest Jobs’, The Guardian, see http://www.theguardian.com/money/2015/ apr/07/going-to-work-with-a-smile-on-your-face.

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As the opening vignette demonstrates, organizations need to be very concerned with the attitudes of their employees. In this chapter, we look at attitudes, their link to behaviour and how employees’ satisfaction or dissatisfaction with their jobs affects the workplace.

REFLECTION Think about your job or if you currently do not have a job, think about your most recent work experience. How satisfied were you? What factors made the job more or less satisfying?

Attitudes attitudes Evaluative statements or judgements concerning objects, people or events.

Attitudes are evaluative statements – either favourable or unfavourable – about objects, people

or events. They reflect how we feel about something. When I say ‘I like my job’, I am expressing my attitude to my work. Attitudes are complex. If you ask people about their attitude towards religion, their political leaders or the organization they work for, you may get a simple response, but the reasons underlying the response are probably complex. In order to fully understand attitudes, we need to consider their fundamental properties or components.

What are the main components of attitudes? 1  Contrast the three components of an attitude. cognitive component The opinion or belief segment of an attitude. affective component The emotional or feeling segment of an attitude. behavioural component An intention to behave in a certain way towards someone or something.

Typically, researchers have assumed that attitudes have three components: cognition, affect and behaviour.1 Let’s look at each. The statement ‘my pay is low’ is a description. It is the cognitive component of an attitude – the aspect of an attitude that is a description of or belief in the way things are. It sets the stage for the more critical part of an attitude – its affective component. Affect is the emotional or feeling segment of an attitude and is reflected in the statement ‘I am angry over how little I’m paid.’ Finally, and we’ll discuss this issue at considerable length later in this section, affect can lead to behavioural outcomes. The behavioural component of an attitude refers to an intention to behave in a certain way towards someone or something (to continue the example, ‘I’m going to look for another job that pays better.’). Viewing attitudes as being made up of three components – cognition, affect and ­behaviour  – is helpful in understanding their complexity and the potential relationship between attitudes and behaviour. Keep in mind that these components are closely related, and cognition and affect in particular are inseparable in many ways. For example, imagine you concluded that someone had just treated you unfairly. Aren’t you likely to have feelings about that, occurring virtually instantaneously with the thought? Thus, cognition and affect are intertwined. Figure 3.1 illustrates how the three components of an attitude are related. In this example, an employee didn’t get a promotion he thought he deserved; a co-worker got it instead. The employee’s attitude towards his supervisor is illustrated as follows: the employee thought he deserved the promotion (cognition), the employee strongly dislikes his supervisor (affect) and the employee is looking for another job (behaviour). As we previously noted, although we often think that cognition causes affect, which then causes behaviour, in reality these components are often difficult to separate. In organizations, attitudes are important for their behavioural component. If workers believe, for example, that supervisors, auditors and bosses are all in conspiracy to make employees work harder for the same or less money, it makes sense to try to understand how these attitudes formed, their relationship to actual job behaviour and how they might be changed.

Cognition, affect and behaviour are closely related

Attitudes   61

Cognitive = evaluation My supervisor gave a promotion to a co-worker who deserved it less than me. My supervisor is unfair.

Affective = feeling I dislike my supervisor!

Negative attitude towards supervisor

Behavioural = action I’m looking for other work; I’ve complained about my supervisor to anyone who would listen.

Figure 3.1  The components of an attitude

Does behaviour always follow from attitudes? 2  Summarize the relationship between attitudes and behaviour.

cognitive dissonance Any incompatibility between two or more attitudes or between behaviour and attitudes.

Early research on attitudes assumed that they were causally related to behaviour; that is, the attitudes people hold determine what they do. Common sense, too, suggests a relationship. Isn’t it logical that people watch television programmes they like, or that employees try to avoid assignments they find distasteful? However, in the late 1960s, this assumed effect of attitudes on behaviour was challenged by a review of the research.2 One researcher – Leon Festinger – argued that attitudes follow behaviour. Did you ever notice how people change what they say so it doesn’t contradict what they do? Perhaps a friend of yours has consistently argued that the quality of French cars isn’t up to that of German cars. But his dad gives him a late-model Renault, and suddenly French cars aren’t so bad. Festinger argued that these cases of attitude following behaviour illustrate the effects of cognitive dissonance.3 Cognitive dissonance refers to any incompatibility an individual might perceive between two or more attitudes or between behaviour and attitudes. Festinger argued that any form of inconsistency is uncomfortable and that individuals will attempt to reduce the dissonance and, hence, the discomfort. They will seek a stable state, in which there is a minimum of dissonance. Research has generally concluded that people seek consistency among their attitudes and between their attitudes and their behaviour.4 They do this by altering either the attitudes or the behaviour or by developing a rationalisation for the discrepancy. Tobacco executives provide an example.5 How, you might wonder, do these people cope with the ongoing barrage of data linking cigarette smoking and negative health outcomes? They can deny that any clear causation between smoking and cancer, for instance, has been established. They can brainwash themselves by continually articulating the benefits of tobacco. They can acknowledge the negative consequences of smoking but rationalise that people are going to smoke and that tobacco companies merely promote freedom of choice. They can accept the research evidence and begin actively working to make less dangerous cigarettes or at least reduce their ­availability to more vulnerable groups, such as teenagers. Or they can quit their job because the dissonance is too great. No individual, of course, can completely avoid dissonance. You know that cheating on your income tax is wrong, but you ‘fiddle’ the numbers a bit every year and hope you’re not audited. Or you tell your children to floss their teeth every day, but you don’t. So how do people cope? Festinger would propose that the desire to reduce dissonance depends on the importance of the

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elements creating it and the degree of influence the individual believes he has over the elements; individuals will be more motivated to reduce dissonance when the attitudes or behaviour are important or when they believe that the dissonance is due to something they can control. A third factor is the rewards of dissonance; high rewards accompanying high dissonance tend to reduce the tension inherent in the dissonance. These moderating factors suggest that just individuals who experience dissonance will not necessarily move directly towards reducing it. If the issues underlying the dissonance are of minimal importance, if individuals perceive the dissonance is externally imposed and substantially uncontrollable, or if rewards are significant enough to offset it, an individual will not be under great tension to reduce the dissonance. While Festinger questioned the attitudes–behaviour relationship by arguing that, in many cases, attitudes follow behaviour, other researchers asked whether there was any relationship at all. More recent research shows that attitudes predict future behaviour and confirmed Festinger’s original belief that certain ‘moderating variables’ can strengthen the link.6

Moderating variables

lego

The most powerful moderators of the attitudes–behaviour relationship are the importance of the attitude, its correspondence to behaviour, its accessibility, whether there exist social pressures, and whether a person has direct experience with the attitude.7 Important attitudes reflect fundamental values, self-interest, or identification with individuals or groups that a person values. Attitudes that individuals consider important tend to show a strong relationship to behaviour. The more closely the attitude and the behaviour are matched or correspond, the stronger the relationship. Specific attitudes tend to predict specific behaviours, whereas general attitudes tend to best predict general behaviours. For instance, asking someone specifically about their intention to stay with an organization for the next six months is likely to better predict turnover for that person than if you asked them how satisfied they were with their job

The more closely attitudes and behaviour are matched, the stronger the relationship. At LEGO, a Danish company still owned by the family who founded it in 1932 (three generations appear in the photo), they believe that play is a key element in children’s growth and development and stimulates the imagination and the emergence of ideas and creative expression. At LEGO, attitudes are based on this philosophy of learning and development through play and this underpins the behaviours of employees and ultimately on which all LEGO products are based. Source: www.lego.com

Attitudes   63

overall. On the other hand, overall job satisfaction would better predict a general behaviour such as whether the individual was engaged in their work or motivated to contribute to their organization.8 Attitudes we remember easily are more likely to predict our behaviour. Interestingly, you’re more likely to remember attitudes you frequently express. So the more you talk about your attitude on a subject, the more you’re likely to remember it, and the more likely it is to shape your behaviour. Discrepancies between attitudes and behaviour are more likely to occur when social pressures to behave in certain ways hold exceptional power. This situation tends to characterize behaviour in organizations. It may explain why an employee who holds strong anti-union attitudes attends pro-union organizing meetings or why tobacco executives, who are not smokers themselves and who tend to believe the research linking smoking and cancer, don’t actively discourage others from smoking. Finally, the attitude–behaviour relationship is likely to be much stronger if an attitude refers to something with which the individual has direct personal experience. Asking university students with no significant work experience how they would respond to working for an authoritarian supervisor is far less likely to predict actual behaviour than asking that same question of employees who have actually worked for such an individual.

What are the major job attitudes? 3  Compare and contrast the major job attitudes.

A person can have thousands of attitudes, but OB focuses our attention on a very limited number of work-related attitudes. These tap positive or negative evaluations that employees hold about aspects of their work environment. Most of the research in OB has looked at three attitudes: job satisfaction, job involvement and organizational commitment.9 A few other attitudes attracting attention from researchers include perceived organizational support and employee engagement; we’ll also briefly discuss these.

Job satisfaction job satisfaction A positive feeling about one’s job resulting from an evaluation of its characteristics.

The term job satisfaction describes a positive feeling about a job, resulting from an evaluation of its characteristics. A person with a high level of job satisfaction holds positive feelings about their job, while a dissatisfied person holds negative feelings. When people speak of employee attitudes, they usually mean job satisfaction. In fact, the two are frequently used interchangeably. Because of the high importance OB researchers have given to job satisfaction, we’ll review this attitude in detail later in this chapter.

EMPLOYABILITY AND ATTITUDES Leo was excited when he found his ideal job as a medical researcher being advertised. He believed he was guaranteed to get the position since his CV perfectly matched the job description and academic requirements. When the call came for an interview, he saw it as a formality. But Leo was devastated when he learned that he did not get through to the second interview stage. When he phoned the company’s HR department to get feedback, he was told that although the interviewing panel had been impressed with his subject knowledge, they had commented that he seemed to be lacking in enthusiasm and that they were ‘concerned that he would not engage’ with his job, colleagues or the company. Shocked, Leo talked it through with his father. It hadn’t occurred to him that the interview was about anything but

his academic qualifications. He began to understand why the interviewers had thought he was lacking in enthusiasm. He had been focusing on answering the questions slowly and carefully in a technical manner and talking about how he was always ‘top of the class’. It was not surprising that he may have come across as lacking in enthusiasm, aloof and negative about the team he would be working with. Leo looked again at the person specification that lists the skills the job candidate must have to fulfil the role he was sent by the company before the interview. At the top of the list he found, ‘a positive attitude: a “can do” approach and a willingness to learn’. Source: Adapted from http://www.jobs.ac.uk/careers-advice/interview-tips/1515/ employability-what-are-employers-looking-for. Accessed 25 May 2015.

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Job involvement job involvement The degree to which a person identifies with a job, actively participates in it and considers performance important to self-worth. psychological empowerment Employees’ belief in the degree to which they affect their work environment, their competence, the meaningfulness of their job and their perceived autonomy in their work. organizational commitment The degree to which an employee identifies with a particular organization and its goals and wishes to maintain membership in the organization. affective commitment An emotional attachment to an organization and a belief in its values. continuance commitment The perceived economic value of remaining with an organization compared to leaving it. normative commitment An obligation to remain with an organization for moral or ethical reasons.

Related to job satisfaction is job involvement.10 Job involvement measures the degree to which people identify psychologically with their job and consider their perceived performance level important to self-worth.11 Employees with a high level of job involvement strongly identify with and really care about the kind of work they do. Another closely related concept is psychological empowerment, which is employees’ beliefs in the degree to which they influence their work environment, their competence, the meaningfulness of their job and the perceived autonomy in their work.12 For example, one study of nursing managers in Singapore found that good leaders empower their employees by involving them in decisions, making them feel their work is important and giving them discretion to ‘do their own thing’.13 High levels of both job involvement and psychological empowerment are positively related to organizational citizenship and job performance.14 In addition, high job involvement has been found to be related to a reduced number of absences and lower resignation rates.15

Organizational commitment The third job attitude we’ll discuss is organizational commitment, a state in which an employee identifies with a particular organization and its goals and wishes to maintain membership in the organization. So, high job involvement means identifying with your specific job, while high organizational commitment means identifying with your employing organization. There are three separate dimensions to organizational commitment:16 1. Affective commitment. An affective commitment is an emotional attachment to the

­ rganization and a belief in its values. For example, a Royal Society for the Prevention of o Cruelty to Animals employee may be affectively committed to the organization because of its involvement with animals. 2. Continuance commitment. A continuance commitment is the perceived economic value of

remaining with an organization compared to leaving it. An employee may be committed to an employer because they are paid well and feels it would hurt their family to quit. 3. Normative commitment. A normative commitment is an obligation to remain with the

organization for moral or ethical reasons. For example, an employee who is spearheading a new initiative may remain with an employer because they feel they would ‘leave the employer in the lurch’ if they left. A positive relationship appears to exist between organizational commitment and job productivity, but it is a modest one.17 A review of 27 studies suggested that the relationship between commitment and performance is strongest for new employees, and it is considerably weaker for more experienced employees.18 And, as with job involvement, the research evidence demonstrates negative relationships between organizational commitment and both absenteeism and turnover.19 In general, affective commitment seems more strongly related to organizational outcomes such as performance and turnover than the other two commitment dimensions. One study found that affective commitment was a significant predictor of various outcomes (perception of task characteristics, career satisfaction, intent to leave) in 72 per cent of the cases, compared to only 36 per cent for normative commitment and 7 per cent for continuance commitment.20 The weak results for continuance commitment make sense in that it really isn’t a strong commitment at all. Rather than an allegiance (affective commitment) or an obligation (normative commitment) to an employer, a continuance commitment describes an employee who is ‘tethered’ to an employer simply because there isn’t anything better available. There is reason to believe that the concept of commitment may be less important to employers and employees today than it once was. The unwritten loyalty contract that existed 30 years ago between employees and employers has been seriously damaged, and the notion of employees staying with a single organization for most of their career has become increasingly irrelevant. Given that, ‘measures of employee–firm attachment, such as commitment,

Attitudes   65

are problematic for new employment relations.’21 This suggests that organizational commitment is probably less important as a work-related attitude than it once was. In its place, we might expect something akin to occupational commitment to become a more relevant variable because it better reflects today’s fluid workforce.22

Perceived organizational support perceived organizational support (POS) The degree to which employees believe an organization values their contribution and cares about their well-being.

Perceived organizational support (POS) is the degree to which employees believe the organization values their contribution and cares about their well-being (for example, an employee believes their organization would accommodate them if they had a child-care problem or would forgive an honest mistake on their part). Research shows that people perceive their organization as supportive when rewards are deemed fair, when employees have a voice in decisions, and when their supervisors are seen as supportive.23 Employees with strong POS perceptions have been found more likely to have higher levels of organizational citizenship behaviours, lower levels of tardiness and better customer service.24 Though little cross-cultural research has been done, one study found POS predicted only the job performance and citizenship behaviours of ­untraditional or low power-distance Chinese employees – in short, those more likely to think of work as an exchange rather than a moral obligation.25

employee engagement An individual’s involvement and satisfaction with, and enthusiasm for, the work he or she does.

A new concept is employee engagement, an individual’s involvement with, satisfaction with, and enthusiasm for, the work they do. For example, we might ask employees about the availability of resources and the opportunities to learn new skills, whether they feel their work is important and meaningful, and whether their interactions with co-workers and supervisors are rewarding.26 Highly engaged employees have a passion for their work and feel a deep connection to their company, disengaged employees do not. These workers put time but not energy or attention into their work. Employee engagement has become increasingly important over the past decade as research evidence has emerged to strongly support the concept for organizational success. A recent study of nearly 8,000 business units in 36 companies found that compared to other companies, those whose employees had high-average levels of engagement had higher levels of customer satisfaction, were more productive, had higher profits and had lower levels of turnover and accidents.27 Another study of over 664,000 employees from 71 companies around the world found an almost 52 per cent difference in one-year performance improvement in operating income

Pawel Libera/LightRocket via Getty Images

Employee engagement

The luxury hotel operator, Dorchester Collection, places employee engagement at the heart of the company and has won global awards for its employee engagement strategy. The results are impressive. Employee engagement is consistently above 90 per cent and this has a direct correlation with performance, driving additional revenue from guests up 10 per cent to €10 million. It has also saved €2.5 million via reduced attrition rates. Source: Katie Jacobs, ‘Between the sheets: Meet Dorchester Collection’s Eugenio Pirri’, HR Magazine, 29 August 2014 http://www.hrmagazine.co.uk/ hr/features/1146238/sheets-meet-dorchester-collections-eugenio-pirri

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between companies with highly engaged employees as compared to those companies with low engagement scores. Research has also demonstrated that organizations which foster high levels of engagement are more likely to retain high-­performing employees.28 Engagement becomes a real concern for most organizations because surveys indicate that few employees – between 17 per cent and 29 per cent – are highly engaged by their work. Caterpillar set out to increase employee engagement and concluded that its initiative resulted in an 80 per cent drop in grievances and a 34 per cent increase in highly satisfied customers.29 Such promising findings have earned employee engagement a following in many business organizations and management consulting firms. However, the concept is relatively new and still generates active debate about its usefulness. One review of the literature concluded, ‘The meaning of employee engagement is ambiguous among both academic researchers and among practitioners who use it in conversations with clients.’ Another reviewer called engagement ‘an umbrella term for whatever one wants it to be’.30 More recent research has set out to clarify the dimensions of employee engagement. This work has demonstrated that engagement is distinct from job satisfaction and job involvement and incrementally predicts job behaviours after we take these traditional job attitudes into account.

Are these job attitudes really all that distinct? You might wonder whether these job attitudes are really distinct. After all, if people feel deeply involved in their job (high job involvement), isn’t it probable that they like it (high job satisfaction)? Similarly, won’t people who think their organization is supportive (high perceived organizational support) also feel committed to it (strong organizational commitment)? Evidence suggests that these attitudes are highly related, perhaps to a troubling degree. For example, the correlation between perceived organizational support and affective commitment is very strong.31 The problem is that a strong correlation means the variables may be redundant (so, for example, if you know someone’s affective commitment, you basically know their perceived organizational support). But why is this redundancy so troubling? Why have two steering wheels on a car when you need only one? Why have two concepts – going by different labels – when you need only one? Redundancy is inefficient and confusing. Although we OB researchers like proposing new attitudes, often we haven’t been good at showing how they compare and contrast with each other. There is some measure of distinctiveness among these attitudes, but they overlap greatly. The overlap may exist for various reasons, including the employee’s personality. Some people are predisposed to be positive or negative about almost everything. If someone tells you they love

Exodus phenomenon The recent Kelly Global Workforce report on 170,000 employees in 30 countries paints a picture of dissatisfied employees everywhere, with two-thirds expressing the intention to leave their companies for other organizations and more than one-third entertaining the idea of quitting. But a closer look at variations from country to country is surprising. In Brazil and Mexico, for instance, 56 per cent of respondents to a Mercer survey of 30,000 employees at different companies reported seriously considering leaving their organiz­ ations, versus just 28 per cent in the Netherlands. The United States was somewhat in between, at 32 per cent. If US statistics are indicative, almost a quarter of high-­ potential employees are taking the next step and actually looking for new jobs, a significant increase over the 13 per cent who did so in 2005. Even more distressing, employers are not likely to get an opportunity to address employees’ concerns: more than one-third of the individuals contemplating quitting report they are not likely to tell their employers they are

glOBal thinking of leaving. For many reasons, especially lack of job engagement, these individuals are likely to contribute to an upward trend in expensive organizational turnover. Perhaps the most disturbing statistic from an organiz­ ational behaviour perspective is the one-quarter of workers in each country who don’t plan to quit but who are more negative about their work than the potential quit group. As Pete Foley, a principal at Mercer, says, this ‘signals to us we have a fairly big group . . . of apathetic, disaffected, [mentally] checked-out employees.’ It is the express role of organizational behaviour experts to determine what companies can do to alleviate this problem. This chapter offers some suggestions. Sources: ‘Acquisition and retention in the war for talent’, Kelly Global Workforce Index Report, April 2012; K. Gurchiek, ‘Engagement erosion plagues employers worldwide’, HR Magazine, June 2012, p. 17; and G. Kranz, ‘Keeping the keepers’, Workforce Management, April 2012, pp. 34–7.

Job satisfaction   67

their company, it may not mean a lot if they are positive about everything else in their life. Or the overlap may mean that some organizations are just all-around better places to work than others. This may mean that if you as a manager know someone’s level of job satisfaction, you know most of what you need to know about how the person sees the organization.

Job satisfaction We have already discussed job satisfaction briefly. Now let’s dissect the concept more carefully. How do we measure job satisfaction? How satisfied are employees in their jobs? What causes an employee to have a high level of job satisfaction? How do dissatisfied and satisfied employees affect an organization?

Measuring job satisfaction 4 Define job satisfaction and show how it can be measured.

We’ve defined job satisfaction as a positive feeling about a job resulting from an evaluation of its characteristics. This definition is clearly a very broad one.32 Yet breadth is inherent in the concept. Remember, a person’s job is more than just the obvious activities of shuffling papers, writing program code, waiting on customers or driving a lorry. Jobs require interacting with co-workers and bosses, following organizational rules and policies, meeting performance standards, living with working conditions that are often less than ideal and the like.33 This means that an employee’s assessment of how satisfied they are with the job is a complex summation of a number of discrete job elements. How, then, do we measure the concept? The two most widely used approaches are a single global rating and a summation score made up of a number of job facets. The single global rating method is nothing more than a response to one question, such as ‘All things considered, how satisfied are you with your job?’ Respondents circle a number between 1 and 5 that corresponds to answers from ‘highly satisfied’ to ‘highly dissatisfied’. The other approach – a summation of job facets – is more sophisticated. It identifies key elements in a job and asks for the employee’s feelings about each. Typical elements here are the nature of the work, supervision, present pay, promotion opportunities and relations with co-workers.34 Respondents rate them on a standardized scale, and researchers add the ratings to create an overall job satisfaction score. Is one of these approaches superior to the other? Intuitively, summing up responses to a number of job factors seems likely to achieve a more accurate evaluation of job satisfaction. The research, however, doesn’t support the intuition.35 This is one of those rare instances in which simplicity seems to work as well as complexity, and comparisons of the two methods indicate that one is essentially as valid as the other. The best explanation for this outcome is that the concept of job satisfaction is inherently so broad that the single question captures its essence. Another explanation may be that some important facets are left out of the summation of job facets. Both methods are helpful. For example, the single global rating method isn’t very time-consuming, which frees managers to address other workplace issues and problems. And the summation of job facets helps managers zero in on where problems exist, making it easier to deal with unhappy employees and solve problems faster and more accurately.

How satisfied are people in their jobs? Are most people satisfied with their jobs? The answer seems to be a qualified ‘yes’ across Europe and in most other developed countries. European Commission research asserts that a vast majority of European Union workers are satisfied with their jobs. However, there are variations across these countries. The highest levels of job satisfaction are found in the Scandinavian and Continental countries, plus Ireland and the United Kingdom, while lower levels are reported in the southern member states and the eastern new member states. It must also be noted that there is at least some evidence to suggest that there has been a decline in levels of reported job satisfaction since the onset of the financial crisis around 2008. This has put a severe strain on the European economy and labour markets – with repercussions for working conditions and job satisfaction.36

68  3 Attitudes and job satisfaction

OB IN THE NEWS

Unhappy workers feel much of their day is a waste of time by Gill Plimmer Employees have told an international poll that about a third of the time they spend at work is unproductive. A poll of 6,250 workers in 14 countries found that elsewhere in Europe, and in the US, Canada and Australia, they rated themselves more productive. But Britons’ perceptions of their productivity were shared by the Greeks, who felt they wasted 38 per cent of their working day. Only the Spanish and the Italians said they were less productive. In Italy, they believed that more than half their working day could have been better spent. Ian McVey, director of Qualtrics, the software company that carried out the study, said the UK might score poorly because so many work in the services sector, including banking. ‘We’re productive after a fashion,’ he said. ‘But there may be something in the nature of the services industry that means people don’t necessarily feel it. There’s not something tangible in what we produce; there’s just a lot of paperwork.’

In Italy, Greece and Spain, economic crises have also dented productivity. ‘In those countries, they have lost an element of their manufacturing basis and their services sector has been hit, so that will be why they feel that much of their time is wasted,’ Mr McVey said. The study echoes other research that shows UK productivity falling behind. Data from the Office for National Statistics showed output per hour in the UK was 18 percentage points lower than the average in the rest of the Group of Seven economies in 2014 – the widest gap since comparable records began in 1991. The Qualtrics poll also found that UK workers often lacked job satisfaction. Nearly half of Britons were miserable in their work, while the French scored the highest on happiness, closely followed by the Germans and Americans.

Source: Gill Plimmer, ‘Job satisfaction – unhappy workers feel much of their day is waste of time’, Financial Times, 26 March 2016. © The Financial Times Limited. All Rights Reserved. Pearson Education Ltd. is responsible for providing this adaptation of the original article.

Research also shows that satisfaction levels vary a lot, depending on which facet of job satisfaction you’re talking about. For example, British workers are, on average, satisfied with their jobs overall, variety in the job and with their fellow workers. However, they tend to be less satisfied with their pay and with promotion opportunities.37

What causes job satisfaction? Think about the best job you’ve ever had. What made it so? Chances are you probably liked the work you did. In fact, of the major job-satisfaction facets (work itself, pay, advancement opportunities, supervision, co-workers), enjoying the work is almost always the one most strongly correlated with high levels of overall job satisfaction. Interesting jobs that provide training, variety, independence and control satisfy most employees.38 Jobs involving solving unforeseen problems, performing complex tasks and learning new things have been associated with higher levels of work satisfaction. In other words, most people prefer work that is challenging and stimulating over work that is predictable and routine. There is also a strong correspondence between how well people enjoy the social context of their workplace and how satisfied they are overall. Interdependence, feedback, social support and interaction with co-workers outside the workplace are strongly related to job satisfaction even after accounting for characteristics of the work itself.39 A Europe-wide survey demonstrated that education, job security, job autonomy, work–life balance and employee participation are all strongly correlated with increased job satisfaction. Conversely, a clear relation with the level of job satisfaction did not emerge in terms of employment sector, age, gender or marital status. However, other studies demonstrate that

Job satisfaction   69

5  Summarize the main causes of job satisfaction.

core self-evaluations Bottom-line conclusions individuals have about their capabilities, competence and worth as a person.

these factors may have an influence on job satisfaction at a national level. Which jobs have the highest levels of satisfaction? One study claimed that around 70 per cent of hairdressers record high overall job satisfaction scores, yet only around 25 per cent of bus drivers do so.40 You’ve probably noticed that pay comes up often when people discuss job satisfaction. There is an interesting relationship between salary and job satisfaction. For people who are poor (for example, living below the poverty line) or who live in poor countries, pay does correlate with job satisfaction and with overall happiness. There is some discussion surrounding whether people in low paid jobs are less satisfied than those in high paid jobs, but this does appear to be the case. Interestingly, a study of 14 countries in the EU supported this relationship in all countries apart from the United Kingdom where lower paid workers were more satisfied than higher paid workers. The implication was that British low pay workers may obtain compensating differences in the form of non-monetary benefits.41 But, once an individual reaches a level of comfortable living, the relationship virtually disappears. In other words, people who earn €40,000 are, on average, no happier with their jobs than those who earn close to €20,000. Jobs that are compensated handsomely have average job satisfaction levels no higher than those that are paid much less.42 To further illustrate this point, one researcher even found no significant difference when he compared the overall well-being of the richest people on the Forbes 400 list with that of Maasai herdsmen in East Africa.43 Money does motivate people (as we will discover in Chapter 6). But what motivates us is not necessarily the same as what makes us happy. Career changes are becoming more common where workers will exchange a high-paying job for a lesser paying job that gives them greater job satisfaction, for example, bankers retraining as teachers, journalists turned gym instructors and TV producers as forest rangers. A senior analyst for an investment fund who quit to become an acupuncturist commented that, ‘I had a job that paid me very well, good friends, paid back my student loan, wasn’t working long hours, had pretty nice colleagues, but I got to the point where I never wanted to get up to go to work, so I thought something needed to change, and work seemed to be the obvious thing to change’.44 Maybe your goal isn’t to be happy. But if it is, money’s probably not going to do much to get you there.45 Job satisfaction is not just about job conditions. Personality also plays a role. People who are less positive about themselves are less likely to like their jobs. Research has shown that people who have positive core self-evaluations – who believe in their inner worth and basic competence – are more satisfied with their jobs than those with negative core self-evaluations. Not only do they see their work as more fulfilling and challenging, they are more likely to gravitate towards challenging jobs in the first place. Those with negative core self-evaluations set less ambitious goals and are more likely to give up when confronting difficulties. Thus, they’re more likely to be stuck in boring, repetitive jobs than those with positive core self-evaluations.46

‘Happy workers are productive workers’ This statement is generally true. The idea that ‘happy workers are productive workers’ developed in the 1930s and 1940s, largely as a result of findings drawn by researchers conducting the Hawthorne studies at Western Electric. Based on those conclusions, managers worked to make their employees happier by focusing on working conditions and the work environment. Then, in the 1980s, an influential review of the research suggested that the relationship between job satisfaction and job performance was not particularly high. The authors of that review even went so far as to label the relationship as ‘illusory’.47 More recently, a review of more than 300 studies corrected some errors in that earlier review. It estimated that the correlation between job satisfaction and job performance is

MYTH OR SCIENCE?

moderately strong. This conclusion also appears to be generalizable across international contexts. The correlation is higher for complex jobs that provide employees with more discretion to act on their attitudes.48 The reverse causality might be true: productive workers are likely to be happy workers, or productivity might lead to satisfaction.49 In other words, if you do a good job, you intrinsically feel good about it. In addition, your higher productivity should increase your recognition, your pay level and your likelihood of promotion. Cumulatively, these rewards, in turn, increase your level of satisfaction with the job. Both arguments are probably right. Satisfaction can lead to high levels of performance for some people, while for others, high performance is satisfying.

70  3 Attitudes and job satisfaction

The impact of satisfied and dissatisfied employees on the workplace 6  Identify four employee responses to dissatisfaction.

exit Dissatisfaction expressed through behaviour directed towards leaving the organization. voice Dissatisfaction expressed through active and constructive attempts to improve conditions. loyalty Dissatisfaction expressed by passively waiting for conditions to improve. neglect Dissatisfaction expressed through allowing conditions to worsen.

There are consequences when employees like their jobs and when they dislike their jobs. One theoretical model – the exit–voice–loyalty–neglect framework – is helpful in understanding the consequences of dissatisfaction. Figure 3.2 illustrates the framework’s four responses, which differ from one another along two dimensions: constructive/destructive and active/passive. The responses are defined as follows:50 ●

●

●

●

Exit. The exit response involves directing behaviour towards leaving the organization, including looking for a new position as well as resigning. Voice. The voice response involves actively and constructively attempting to improve conditions, including suggesting improvements, discussing problems with superiors and undertaking some forms of union activity. Loyalty. The loyalty response involves passively but optimistically waiting for conditions to improve, including speaking up for the organization in the face of external criticism and trusting the organization and its management to ‘do the right thing’. Neglect. The neglect response involves passively allowing conditions to worsen, including chronic absenteeism or lateness, reduced effort and increased error rate.

Exit and neglect behaviours encompass our performance variables – productivity, absenteeism and turnover. But this model expands employee response to include voice and loyalty – constructive behaviours that allow individuals to tolerate unpleasant situations or to revive satisfactory working conditions. It helps us to understand situations, such as those sometimes found among unionized workers, for whom low job satisfaction is coupled with low turnover.51 Union members often express dissatisfaction through the grievance procedure or through formal contract negotiations. These voice mechanisms allow them to continue in their jobs while convincing themselves that they are acting to improve the situation. As helpful as this framework is in presenting the possible consequences of job dissatisfaction, it’s quite general. We now discuss more specific outcomes of job satisfaction and dissatisfaction in the workplace.

Job satisfaction and job performance As the ‘Myth or Science?’ box concludes, happy workers are more likely to be productive workers, although it’s hard to tell which way the causality runs. Some researchers used to believe that the relationship between job satisfaction and job performance was a management Active

EXIT

VOICE

Destructive

Constructive

NEGLECT

LOYALTY

Passive

Figure 3.2  Responses to job satisfaction Source: When bureaucrats get the blues: Responses to dissatisfaction among federal employees, Journal of Applied Social ­Psychology, 15, No. 1, July, p.83 (Rusbult, C. and Lowery, B. 2006).

Job satisfaction   71

myth. But a review of 300 studies suggested that the correlation is pretty strong.52 As we move from the individual level to that of the organization, we also find support for the ­­satisfaction– performance relationship.53 When satisfaction and productivity data are gathered for the organization as a whole, we find that organizations with more satisfied employees tend to be more effective than organizations with fewer satisfied employees.

Job satisfaction and OCB It seems logical to assume job satisfaction should be a major determinant of an employee’s organizational citizenship behaviour (OCB).54 Satisfied employees would seem more likely to talk positively about the organization, help others and go beyond the normal expectations in their job, perhaps because they want to reciprocate their positive experiences. Consistent with this thinking, evidence suggests job satisfaction is moderately correlated with OCBs; people who are more satisfied with their jobs are more likely to engage in OCBs.55 Why? Fairness perceptions help explain the relationship.56 Those who feel their co-workers support them are more likely to engage in helpful behaviours, whereas those who have antagonistic relationships with co-workers are less likely to do so.57 Individuals with certain personality traits are also more satisfied with their work, which in turns leads them to engage in more OCBs.58 Finally, research shows that when people are in a good mood, they are more likely to engage in OCBs.59

Job satisfaction and customer satisfaction

Wouter Van Vooren

Employees in service jobs often interact with customers (as we noted in Chapter 1). Since the management of service organizations should be concerned with pleasing those customers, it is reasonable to ask: Is employee satisfaction related to positive customer outcomes? For frontline employees who have regular contact with customers, the answer is ‘yes’. The evidence indicates that satisfied employees increase customer satisfaction and loyalty.60 Why? In service organizations, customer retention and defection are highly dependent on how frontline employees deal with customers. Satisfied employees are more likely to be friendly,

For the sixth year Schoenen Torfs, named after CEO and founder Wouter Torfs (pictured), was named the Best Employer in Belgium in the category of 500 or more employees. The shoe shop chain, based in Sint-Niklaas, has more than 80 outlets in Brussels and Flanders. Torfs is well-known throughout the retail industry for its people-oriented policies and there is good reason for this. According to Torfs’ philosophy, the quickest way to customer satisfaction is to present them with a model of staff satisfaction. Source: Based on Alan Hope, ‘ Torfs wins best employer for sixth time’, Flanders Today, 11 March 2015.

72  3 Attitudes and job satisfaction

upbeat and responsive – which customers appreciate. And because satisfied employees are less prone to turnover, customers are more likely to encounter familiar faces and receive experienced service. These qualities build customer satisfaction and loyalty. The relationship also seems to apply in reverse: dissatisfied customers can increase an employee’s job dissatisfaction. Employees who have regular contact with customers report that rude, thoughtless or unreasonably demanding customers adversely affect the employees’ job satisfaction.61 A number of companies are acting on this evidence. Businesses such as Virgin Atlantic, Enterprise Rent-A-Car, Ritz-Carlton Hotels, Lexus and John Lewis fixate on pleasing their customers. Towards that end, they also focus on building employee satisfaction – recognizing that employee satisfaction will go a long way towards contributing to their goal of having happy customers. These firms seek to hire upbeat and friendly employees, train employees in the importance of customer service, reward customer service, provide positive employee work climates and regularly track employee satisfaction through attitude surveys.

Job satisfaction and absenteeism We find a consistent negative relationship between satisfaction and absenteeism, but the correlation is moderate to weak.62 While it certainly makes sense that dissatisfied employees are more likely to miss work, other factors have an impact on the relationship and reduce the correlation coefficient. For example, organizations that provide liberal sick leave benefits are encouraging all their employees – including those who are highly satisfied – to take days off. Assuming that you have a reasonable number of varied interests, you can find work satisfying and yet still want to take off to enjoy a three-day weekend or relax on a warm summer day if those days come free with no penalties. When numerous alternative jobs are available, dissatisfied employees have high absence rates, but when there are few they have the same (low) rate of absence as satisfied employees.63

Job satisfaction and turnover The relationship between job satisfaction and turnover is stronger than between satisfaction and absenteeism.64 The satisfaction–turnover relationship also is affected by alternative job prospects. If an employee is presented with an unsolicited job offer, job dissatisfaction is less predictive of turnover because the employee is more likely leaving in response to ‘pull’ (the lure of the other job) than ‘push’ (the unattractiveness of the current job). Similarly, job dissatisfaction is more likely to translate into turnover when employment opportunities are plentiful because employees perceive it is easy to move. Finally, when employees have high ‘human capital’ (high education, high ability), job dissatisfaction is more likely to translate into turnover because they have, or perceive, many available alternatives.65

Job satisfaction and workplace deviance Job dissatisfaction predicts a lot of specific behaviours, including substance abuse, stealing at work, undue socialising and tardiness. Researchers argue that these behaviours are indicators of a broader syndrome that we would term deviant behaviour in the workplace (or employee withdrawal).66 The key is that if employees don’t like their work environment, they’ll respond somehow. It is not always easy to forecast exactly how they’ll respond. One worker’s response might be to quit. Another might take work time to surf the internet, take work supplies home for personal use, and so on. In short, evidence indicates that workers who don’t like their jobs ‘get even’ in various ways – and because employees can be quite creative in the ways they do that, controlling one behaviour, such as having an absence control policy, leaves the root cause untouched. If employers want to control the undesirable consequences of job dissatisfaction, they should attack the source of the problem – the dissatisfaction – rather than try to control the different responses.

Managers often ‘don’t get it’ Given the evidence we’ve just reviewed, it should come as no surprise that job satisfaction can affect the bottom line. One study by a management consulting firm separated large organi­ zations into high morale (where more than 70 per cent of employees expressed overall job

Global implications   73

satisfaction) and medium or low morale (where fewer than 70 per cent did so). The share prices of companies in the high morale group grew 19.4 per cent, compared to 10 per cent for the medium or low morale group. Despite these results, many managers are unconcerned about job satisfaction of their employees. Still others overestimate the degree to which their employees are satisfied with their jobs, so they don’t think there’s a problem when there is. One study of 262 large employers found that 86 per cent of senior managers believed their ­organization treated its employees well, but only 55 per cent of the employees agreed. Another study found 55 per cent of managers thought morale was good in their organization, compared to only 38 per cent of employees.67 Managers first need to care about job satisfaction, and then they need to measure it, rather than just assume that everything is going well. Regular surveys can reduce gaps between what managers think employees feel and what they really feel. Jonathan McDaniel, manager of a KFC restaurant, surveys his employees every three months. Some results led him to make changes, such as giving employees greater say about which workdays they have off. However, McDaniel believes the process itself is valuable. ‘They really love giving their opinions,’ he says. ‘That’s the most important part of it – that they have a voice and that they’re heard.’ Surveys are no panacea, but if job attitudes are as important as we believe, organizations need to find out where they can be improved.68

Global implications 7  Show whether job satisfaction is an important concept globally.

Most of the research on job satisfaction has been conducted in the United States and to a lesser extent western Europe. So, we might ask: Is job satisfaction a Western concept? The evidence strongly suggests that this is not the case; people in other cultures can and do form judgements of job satisfaction. Moreover, it appears that similar factors cause, and result from, job satisfaction across cultures. For example, we noted earlier that pay is positively, but relatively weakly, related to job satisfaction. This relationship appears to hold in all industrialized nations. Although job satisfaction appears to be a relevant concept across cultures, that doesn’t mean there are no cultural differences in job satisfaction. Evidence suggests that employees in Western cultures have higher levels of job satisfaction than those in Eastern cultures.69 Is the reason that employees in Western cultures have better jobs? Or are individuals in Western cultures simply more positive (and less self-critical)? Although both factors are probably at play, evidence suggests that individuals in Eastern cultures value negative emotions more than do individuals in Western cultures, whereas those in Western cultures tend to emphasize positive emotions and individual happiness.70 That may be why employees in Western cultures are more likely to have higher levels of satisfaction.

Job satisfaction ●

●

One study of UK employees in 2014 found that 38 per cent considered themselves engaged, 59 per cent neutral and 4 per cent disengaged. The highest percentage of engaged employees are found in the voluntary sector, followed by the private, then public sectors. A similar survey by the same organization in 2006 (before the financial crisis) reported 52 per cent of employees were engaged. The iOpener Institute reported that Dutch employees are the happiest in Europe. Workers in the Netherlands spent 57 per cent of their time happy, far more than the British

FACE THE FACTS (42 per cent), Swiss (36 per cent), Italians (37 per cent) or Germans (37 per cent). ●

According to ‘Great Place to Work’ the five best multinational workplaces in Europe in 2015 were NetApp, EMC, W. L. Gore and Associates, Admiral Group and Microsoft.

Sources: How Engaged are British Employees? CIPD Annual Survey Report 2006; Employee Outlook Autumn 2014, CIPD; iOpener Institute see https://www.iopenerinstitute.com/

74  3 Attitudes and job satisfaction

SUMMARY Managers should be interested in their employees’ attitudes because attitudes give warnings of potential problems and influence behaviour. Creating a satisfied workforce is hardly a guarantee of successful organizational performance, but evidence strongly suggests that whatever managers can do to improve employee attitudes will likely result in heightened organizational effectiveness.

IMPLICATIONS FOR MANAGERS ●

●

●

●

Satisfied and committed employees have lower rates of turnover, absenteeism and withdrawal behaviours. They also perform better on the job. Given that managers want to keep resignations and absences down – especially among their most productive employees – they’ll want to do things that generate positive job attitudes. Managers will also want to measure job attitudes effectively so they can tell how employees are reacting to their work. As one review put it, ‘A sound measurement of overall job attitude is one of the most useful pieces of information an organization can have about its employees.’71 The most important thing managers can do to raise employee satisfaction is focus on the intrinsic parts of the job, such as making the work challenging and interesting. Although paying employees poorly will likely not attract high-quality employees to the organization or keep high performers, managers should realize that high pay alone is unlikely to create a satisfying work environment.

Managers can create satisfied employees

POINT/COUNTERPOINT

POINT A review of the evidence has identified four factors conducive to high levels of employee job satisfaction: mentally challenging work, equitable rewards, supportive working conditions and supportive colleagues.72 Management is able to control each of these factors:

Supportive working conditions. Employees want their work environment both to be safe and personally comfortable and to facilitate their doing a good job. In addition, most prefer working relatively close to home, in clean and relatively modern facilities, with adequate tools and equipment.

Mentally challenging work. Generally, people prefer jobs that give them opportunities to use their skills and abilities and offer a variety of tasks, freedom and feedback on how well they’re doing. These characteristics make work mentally challenging.

Supportive colleagues. People get more out of work than merely money and other tangible achievements. For most employees, work also fulfils the need for social interaction. Not surprisingly, therefore, having friendly and supportive co-workers leads to increased job satisfaction. The boss’s behaviour is also a major determinant of satisfaction. Studies find that employee satisfaction is increased when the immediate supervisor is understanding and friendly, offers praise for good performance, listens to employees’ opinions and shows a personal interest in employees.

Equitable rewards. Employees want pay systems that they perceive as just, unambiguous and in line with their expectations. When pay is seen as fair – based on job ­ demands, individual skill level and community pay ­standards – s­ atisfaction is likely to result.

COUNTERPOINT The notion that managers and organizations can control the level of employee job satisfaction is inherently attractive. It fits nicely with the view that managers directly influence organizational processes and outcomes. Unfortunately,

a body of evidence challenges the notion that managers control the factors that influence employee job satisfaction including findings that indicate that it is largely genetically determined.73

EXPERIENTIAL EXERCISE   75

Whether a person is happy or not is essentially determined by gene structure. Approximately 50 to 80 per cent of people’s differences in happiness, or subjective well-being, has been found to be attributable to their genes. Identical twins, for example, tend to have very similar careers, report similar levels of job satisfaction and change jobs at similar rates. Analysis of satisfaction data for a selected sample of individuals over a 50-year period found that individual results were stable over time, even when the subjects changed employers and occupations. This and other research suggests that an individual’s disposition towards life – positive or negative – is established by genetic makeup, holds over time and carries over into a disposition towards work.

Given these findings, there is probably little most managers can do to influence employee satisfaction. Despite the fact that managers and organizations go to extensive lengths to try to improve employee job satisfaction by manipulating job characteristics, working conditions and rewards, people will inevitably return to their own ‘set point’. A bonus may temporarily increase the satisfaction level of a negatively disposed worker, but it is unlikely to sustain it. Sooner or later, a dissatisfied worker will find new areas of fault with the job. The only place managers will have any significant influence is in the selection process. If managers want satisfied workers, they need to screen out negative people who derive little satisfaction from their jobs, irrespective of work conditions.

QUESTIONS FOR REVIEW 1. What are the main components of attitudes? Are these

components related or unrelated? 2. Does behaviour always follow from attitudes? Why or

why not? Discuss the factors that affect whether behaviour follows from attitudes. 3. What are the major job attitudes? In what ways are

these attitudes alike? What is unique about each?

4. How do we measure job satisfaction? 5. What causes job satisfaction? For most people, is pay

or the work itself more important? 6. What outcomes does job satisfaction influence? What

implications does this have for management? 7. Does job satisfaction appear to vary by country?

EXPERIENTIAL EXERCISE WHAT FACTORS ARE MOST IMPORTANT TO YOUR JOB SATISFACTION? Most of us probably want a job we think will satisfy us. But because no job is perfect, we often have to trade off job attributes. One job may pay well but provide limited

opportunities for advancement or skill development. Another may offer work we enjoy but have poor benefits. The following is a list of 21 job factors or attributes:

Autonomy and independence

Management recognition of employee job performance

Benefits

Meaningfulness of job

Career advancement opportunities

Networking

Career development opportunities

Opportunities to use skills/abilities

Compensation/pay

Organization’s commitment to professional development

Communication between employees and management

Overall corporate culture

Contribution of work to organization’s business goals

Relationship with co-workers

Feeling safe in the work environment

Relationship with immediate supervisor

Flexibility to balance life and work issues

The work itself

Job security

The variety of work

Job-specific training

76  3 Attitudes and job satisfaction

On a sheet of paper, rank-order these job factors from top to bottom, so that number 1 is the job factor you think is most important to your job satisfaction, number 2 is the second most important factor to your job ­satisfaction, and so on. Now gather in teams of three or four people and try the following: 1. Appoint a spokesperson who will take notes and report

the answers to the following questions, on behalf of your group, back to the class. 2. Averaging across all members in your group, generate a

list of the top five job factors.

4. Your instructor will provide you with the results of a

study of a random sample of 600 employees conducted by the Society for Human Resource Management (SHRM). How do your group’s rankings compare to the SHRM results? 5. The chapter says that pay doesn’t correlate all that well

with job satisfaction, but in the SHRM survey, people say it is relatively important. Can your group suggest a reason for the apparent discrepancy? 6. Now examine your own list again. Does your list

agree with the group list? Does your list agree with the SHRM study?

3. Did most people in your group seem to value the same

job factors? Why or why not?

ETHICAL DILEMMA THE INSPECTOR’S DILEMMA A newly promoted inspector of police is appointed to a post in a British urban police station. The inspector is a graduate and subscribes wholeheartedly to the police force’s adoption of ‘Fair treatment and equal opportunities for all’. In the new job, the inspector has the management of a shift of 10 constables and two sergeants. Both the latter are older than the inspector and have been police officers for longer. About half the constables have served for longer, but the other five include two probationer-constables. Each of these probationer-constables is being mentored by a long-serving constable. Shifts work closely together. There is a culture of mutual support. The bulk of the area’s older inhabitants are migrants from the Indian sub-continent or from the Caribbean, though the younger people are likely to have been born in the UK. All the officers in the station are white. The inspector notices that dismissive, derogatory remarks

Money isn’t everything in life Changing attitudes towards salaries and job satisfaction When Monster, the employment and careers website, polled users as to whether they would ‘take a pay cut for the job of [their] dreams’, they received more than 34,000 responses from 18 countries in Europe and North America. The sample is by definition self-selecting rather than scientific – Monster reckons its identikit user is 34 years old, has 13 years’ work experience and earns €40,000 annually – but since 87 per cent of their users are seeking new employment, it is a fair

about ethnic groups are part of the common currency of the station. The superintendent in charge of the station is within five years of retirement and is proud of being ‘of the old school’.

Questions 1. What factors do you think may have caused these atti-

tudes towards migrants to have developed? 2. Do you think these attitudes may affect the officers

behaviour? What factors may moderate this? 3. Do you think age is a factor in the development of

these attitudes? 4. Suggest methods that the inspector can use to help change

the attitudes of the officers. Source: Open University. Available at the Institute of Business Ethics, http:// www.ibe.org.uk/teaching/The%20Inspectordilemma.pdf.

CASE INCIDENT 1 assumption that such questions are uppermost in their minds. ‘Dream job’ is also a matter of definition. Nevertheless it was intriguing to note that the vast majority of respondents (76  per cent) said ‘yes’. There were variations across the sample, however, with 84 per cent in Ireland responding ‘yes’ and Switzerland, Italy and the US close behind at 82 per cent. Whereas workers in Germany (73 per cent), France (66 per cent) and Hungary (62 per cent) were the most cautious. Andrea Bertone, co-head of Monster Europe, says: ‘The countries where the “yes” score was highest were those with

CASE INCIDENT 2   77

very flexible labour markets and low unemployment rates [at the time of the survey], where people are willing to take more risks in order to go for a new opportunity.’ He would expect to see higher scores in future: ‘Over the next nine years we will see the baby boomers reaching retirement age and the workforce will then be dominated by Generations X and Y, who look at work less as a life focus than as a life enriching experience.’ These insights are reflected in Sir George Bain’s comment when he moved from heading the London Business School to become vice chancellor of Queen’s University, Belfast, taking a pay cut of around a quarter. Sir George said then: ‘I have always taken the view that you are a fool if you change jobs or refuse them, purely on the grounds of money. But I’m well aware that attitude is a middle-class luxury. My father could not possibly have taken a substantial pay cut or given up one job with no certainty of another.’ Palle Ellemann, managing director of Great Place to Work (GPTW) Institute Europe, suggests that the emphasis on money is greatest in the first two years of an appointment: ‘After that, other things about the job matter more.’ Nor are winners in the GPTW Europe awards necessarily the highest payers. Artti Aurasmaa, chief executive of Finland’s 3 Step IT, reckons its basic rates ‘would not be above average rates. In some cases they may be below.’ Guido Wallraff, human resources manager for Cisco Germany, says his company’s pay rates may be slightly above average, because it benchmarks against comparable employers. What they share

is a philosophy emphasizing fairness, transparency and rewarding good work. Each also acknowledges wider influences – Mr Wallraff at Cisco Germany says that much of its practice echoes that elsewhere in Cisco and that Germany’s system of works councils encourages fairness and openness. Meanwhile Mr Aurasmaa has his own theory for Finnish traditions: ‘Where it is cold, people had to make sure they looked after each other in order to survive, and that has remained part of our culture.’ Mr Wallraff suggests: ‘We don’t have much in the way of fixed assets. Our main asset is our people and their ideas, so we have to look after them.’

Questions 1. Do you think you would take a pay cut for your dream job? Why? Why not?

2. What other factors are important to you? 3. Pay doesn’t seem to be a major reason for the satisfaction of workers at 3 Step IT and Cisco, what other factors might be important to workers in these companies?

4. How generalizable is the relationship between job satisfaction and productivity? Source: Adapted from H. Richards, ‘Money isn’t everything in life’, in ‘Best workplaces’, Financial Times, 28 May 2008; Monster, ‘Monster poll reports majority of workers worldwide willing to take a pay cut for their “dream job”’, 15 May 2008. Available at http://www.about-monster.com/content/monster-pollreports-majority-workers-worldwide-willing-take-pay-cut-their-dream-job. Accessed 11 July 2009.

Extreme jobs You’ve probably heard of extreme sports; snowboarding, freestyle skiing, skydiving. Activities that attract admiration, demand the ultimate in endurance, deliver an adrenaline rush. Well, make way for ‘extreme jobs’, a similar phenomenon taking place in offices across the globe. The word was first coined in 2002 by a senior banker in London who worked a 70-hour week with frequent travel requirements across time zones and constant pressure on performance. Rather than resent her hours in the office, however, she felt as exhilarated by it, as if she were bungee jumping or mountaineering. ‘Work hard, play hard’ is an awful cliché. Yet lots of people in the financial industry use it as a great accolade. Add on ambitious professionals in the media, medicine, law and consulting, and you will gather that a lot of people are holding down extreme jobs. Sylvia Ann Hewlett, a professor at Columbia University, New York, spent a year ‘mapping’ the world of extreme workers, with two surveys of high-earning professionals, one in large multinational corporations in Europe, India and China and another in the US. She defines an extreme job as a job that entails at least 60 hours a week and at least five of the following characteristics:

CASE INCIDENT 2 ●

Physical presence at the office at least 10 hours a day

●

Tight deadlines and a fast pace

● Unpredictable

flow of work

●

Inordinate scope of responsibility

●

Large amount of travel

●

After-hours work events

●

24/7 availability to clients

●

Responsibility for profit and loss

●

Responsibility for mentoring and recruiting

What does a 60-hour week mean? With an hour-long commute each way, it means leaving the house at 7am and returning at 9pm, five days a week. She concludes that extreme jobs are dangerously alluring. ‘We didn’t find it unexpected that jobs have become more intense. The surprise was that people love their jobs to death. They really do feel fulfilled by them’. And yet, she says, extreme jobs come at a price, ‘. . . the fallout is wreaking havoc in private lives’. Relationships with partners and children are suffering, and particularly women are leaving extreme jobs in droves.

78  3 Attitudes and job satisfaction

Questions 1. Do you think only certain individuals are attracted to these types of jobs, or is it the characteristics of the jobs themselves that are satisfying?

2. What characteristics of these jobs might contribute to increased levels of job satisfaction?

3. Would you be satisfied in an extreme job? Why or why not? Would it depend on the stage of your career and/or personal life?

4. How might extreme jobs relate to job performance, citizenship behaviour, customer satisfaction and turnover? Source: Adapted from R. Millard, ‘Drawing back from extreme jobs’, The Sunday Times, 3 December 2006. © The Sunday Times 3 December 2006 nisyndication.com

ENDNOTES   1 S. J. Breckler, ‘Empirical validation of affect, behavior, and cognition as distinct components of attitude’, Journal of Personality and Social Psychology, May 1984, pp. 1191–205; and S. L. Crites, Jr., L. R. Fabrigar and R. E. Petty, ‘Measuring the affective and cognitive properties of attitudes: conceptual and methodological issues’, Personality and Social Psychology Bulletin, December 1994, pp. 619–34.   2 A. W. Wicker, ‘Attitude versus action: The relationship of verbal and overt behavioral responses to attitude objects’, Journal of Social Issues, Autumn 1969, pp. 41–78.   3 L. Festinger, A Theory of Cognitive Dissonance (Stanford, CA: Stanford University Press, 1957).  4 See, for instance, I. R. Newby-Clark, I. McGregor and M. P. Zanna, ‘Thinking and caring about cognitive consistency: when and for whom does attitudinal ambivalence feel uncomfortable?’, Journal of Personality & Social Psychology, February 2002, pp. 157–66; and D. J. Schleicher, J. D. Watt and G. J. Greguras, ‘Reexamining the job satisfaction-performance relationship: the complexity of attitudes’, Journal of Applied Psychology, 89, 1 (2004), pp. 165–77.   5 See, for instance, J. Nocera, ‘If it’s good for Philip Morris, can it also be good for public health?’, New York Times, 18 June 2006 (www.nytimes.com).   6 See L. R. Glasman and D. Albarracín, ‘Forming attitudes that predict future behavior: a meta-analysis of the attitude–behavior relation’, Psychological Bulletin, September 2006, pp. 778–822; I. Ajzen, ‘The directive influence of attitudes on behavior’, in M. Gollwitzer and J. A. Bargh (eds), The Psychology of Action: Linking Cognition and Motivation to Behavior (New York: Guilford, 1996), pp. 385–403; and I. Ajzen, ‘Nature and operation of attitudes’, in S. T. Fiske, D. L. Schacter and C. ZahnWaxler (eds), Annual Review of Psychology, vol. 52 (Palo Alto, CA: Annual Reviews, Inc., 2001), pp. 27–58.  7 Ibid.  8 D. A. Harrison, D. A. Newman and P. L. Roth, ‘How important are job attitudes? Meta-analytic comparisons of integrative behavioral outcomes and time sequences’, Academy of Management Journal, 49, 2 (2006), pp. 305–25.   9 P. P. Brooke, Jr, D. W. Russell and J. L. Price, ‘Discriminant validation of measures of job satisfaction, job involvement, and organizational commitment’, Journal of Applied Psychology, May 1988, pp. 139–45; and R. T. Keller, ‘Job involvement and organizational commitment as longitudinal predictors of job performance: a study of scientists and engineers’, Journal of Applied Psychology, August 1997, pp. 539–45.

10 See, for example, S. Rabinowitz and D. T. Hall, ‘Organizational research in job involvement’, Psychological Bulletin, March 1977, pp. 265–88; G. J. Blau, ‘A multiple study investigation of the dimensionality of job involvement’, Journal of Vocational Behavior, August 1985, pp. 19–36; C. L. Reeve and C. S. Smith, ‘Refining Lodahl and Kejner’s job involvement scale with a convergent evidence approach: applying multiple methods to multiple samples’, Organizational Research Methods, April 2000, pp. 91–111; and J. M. Diefendorff, D. J. Brown and A. M. Kamin, ‘Examining the roles of job involvement and work centrality in predicting organizational citizenship behaviors and job performance’, Journal of Organizational Behavior, February 2002, pp. 93–108. 11 Based on G. J. Blau and K. R. Boal, ‘Conceptualizing how job involvement and organizational commitment affect turnover and absenteeism’, Academy of Management Review, April 1987, p. 290. 12 K. W. Thomas and B. A. Velthouse, ‘Cognitive elements of empowerment: an “interpretive” model of intrinsic task motivation’, Academy of Management Review, 15, 4 (1990), pp. 666–81; G. M. Spreitzer, ‘Psychological empowerment in the workplace: dimensions, measurement, and validation’, Academy of Management Journal, 38, 5 (1995), pp. 1442–65; G. Chen and R. J. Klimoski, ‘The impact of expectations on newcomer performance in teams as mediated by work characteristics, social exchanges, and empowerment’, Academy of Management Journal, 46, 5 (2003), pp. 591–607; A. Ergeneli, G. Saglam and S. Metin, ‘Psychological empowerment and its relationship to trust in immediate managers’, Journal of Business Research, January 2007, pp. 41–49; and S. E. Seibert, S. R. Silver and W. A. Randolph, ‘Taking empowerment to the next level: a m ­ ultiple-level model of empowerment, performance, and satisfaction’, Academy of Management Journal, 47, 3 (2004), pp. 332–49. 13 B. J. Avolio, W. Zhu, W. Koh and P. Bhatia, ‘Transformational leadership and organizational commitment: mediating role of psychological empowerment and moderating role of structural distance’, Journal of Organizational Behavior, 25, 8 (2004), pp. 951–68. 14 J. M. Diefendorff, D. J. Brown, A. M. Kamin and R. G. Lord, ‘Examining the roles of job involvement and work centrality in predicting organizational citizenship behaviors and job performance’, Journal of Organizational Behavior, February 2002, pp. 93–108; S. Zhang, ‘Impact of job involvement on ­organizational citizenship behaviors in China’, Journal of Business Ethics, 120, 2 (2014), pp. 165–74. 15 G. J. Blau, ‘Job involvement and organizational commitment as interactive predictors of tardiness and absenteeism’, Journal

ENDNOTES   79 of Management, Winter 1986, pp. 577–84; M. R. Barrick, M. K. Mount and J. P. Strauss, ‘Antecedents of involuntary turnover due to a reduction in force’, Personnel Psychology, 47, 3 (1994), pp. 515–35; and F. Scrima, L. Lorito, E. Parry and G. Falgares, ‘The mediating role of work engagement on the relationship between job involvement and affective commitment’, International Journal of Human Resource Management, 25, 15 (2013), pp. 1–15. 16 J. P. Meyer, N. J. Allen and C. A. Smith, ‘Commitment to organizations and occupations: extension and test of a three-component conceptualization’, Journal of Applied Psychology, 78, 4 (1993), pp. 538–51. 17 M. Riketta, ‘Attitudinal organizational commitment and job performance: a meta-analysis’, Journal of Organizational Behavior, March 2002, pp. 257–66; B. J. Hoffman, C. A. Blair, J. P. Meriac and D. J. Woehr, ‘Expanding the criterion domain? A quantitative review of the OCB literature’, Journal of Applied Psychology, 92, 2 (2007), pp. 555–66. 18 T. A. Wright and D. G. Bonett, ‘The moderating effects of employee tenure on the relation between organizational commitment and job performance: a meta-analysis’, Journal of Applied Psychology, December 2002, pp. 1183–90. 19 See, for instance, K. Bentein, C. Vandenberghe, R. Vandenberg and F. Stinglhamber, ‘The role of change in the relationship between commitment and turnover: a latent growth modeling approach’, Journal of Applied Psychology, 90 (2005), pp. 468–82; and J. D. Kammeyer-Mueller, C. R. Wanberg T. M. Glomb and D. Ahlburg, ‘The role of temporal shifts in turnover processes: it’s about time’, Journal of Applied Psychology, 90 (2005), pp. 644–58. 20 R. B. Dunham, J. A. Grube and M. B. Castañeda, ‘Organizational commitment: the utility of an integrative definition’, Journal of Applied Psychology, 79, 3 (1994), pp. 370–80. 21 D. M. Rousseau, ‘Organizational behavior in the new ­organizational era’, in J. T. Spence, J. M. Darley and D. J. Foss (eds), Annual Review of Psychology, vol. 48 (Palo Alto, CA: Annual Reviews, 1997), p. 523. 22 Ibid.; K. Lee, J. J. Carswell and N. J. Allen, ‘A meta-analytic review of occupational commitment: relations with person- and work-related variables’, Journal of Applied Psychology, October 2000, pp. 799–811; G. Blau, ‘On assessing the construct validity of two multidimensional constructs: occupational commitment and occupational entrenchment’, Human Resource Management Review, Autumn 2001, pp. 279–98; and E. Snape and T. Redman, ‘An evaluation of a three-component model of occupational commitment: dimensionality and consequences among United Kingdom human resource management specialists’, Journal of Applied Psychology, 88, 1 (2003), pp. 152–9. 23 L. Rhoades, R. Eisenberger and S. Armeli, ‘Affective commitment to the organization: the contribution of perceived organizational support’, Journal of Applied Psychology, 86, 5 (2001), pp. 825–36. 24 C. Vandenberghe, K. Bentein, R. Michon, J. Chebat, M. Tremblay and J. Fils, ‘An examination of the role of perceived support and employee commitment in employee–customer encounters’, Journal of Applied Psychology, 92, 4 (2007), pp. 1177–87; and P. Eder and R. Eisenberger, ‘Perceived organizational support: reducing the negative influence of coworker withdrawal behavior’, Journal of Management, 34, 1 (2008), pp. 55–68. 25 J. Farh, R. D. Hackett and J. Liang, ‘Individual-level cultural values as moderators of perceived organizational

support-employee outcome relationships in China: comparing the effects of power distance and traditionality,’ Academy of Management Journal, 50, 3 (2007), pp. 715–29. 26 D. R. May, R. L. Gilson and L. M. Harter, ‘The psychological conditions of meaningfulness, safety and availability and the engagement of the human spirit at work’, Journal of Occupational and Organizational Psychology, 77, 1 (2004), pp. 11–37. 27 J. K. Harter, F. L. Schmidt and T. L. Hayes, ‘Business-unit-level relationship between employee satisfaction, employee engagement, and business outcomes: a meta-analysis’, Journal of Applied Psychology, 87, 2 (2002), pp. 268–79. 28 See V. Furness ‘Employee management: engagement defined’, Employee Benefits, (London: Centaur Media, 2008), p. 56; Chartered Institute of Personnel and Development (CIPD), How Engaged are British Employees?, November 2006; ‘Engaged employees help boost the bottom line: ISR study reveals that employers with an engaged workforce deliver improved financial results’, Washington DC, SHRM conference, 27 June 2006 www. isrinsight.com. 29 N. R. Lockwood, Leveraging Employee Engagement for Competitive Advantage (Alexandria, VA: Society for Human Resource Management, 2007); and R. J. Vance, Employee Engagement and Commitment (Alexandria, VA: Society for Human Resource Management, 2006). 30 W. H. Macey and B. Schneider, ‘The meaning of employee engagement’, Industrial and Organizational Psychology, 1 (2008), pp. 3–30; A. Saks, ‘The meaning and bleeding of employee engagement: how muddy is the water?’, Industrial and Organizational Psychology, 1 (2008), pp. 40–3. 31 L. Rhoades and R. Eisenberger, ‘Perceived organizational support: a review of the literature’, Journal of Applied Psychology, 87, 4 (2002), pp. 698–714; and R. L. Payne and D. Morrison, ‘The differential effects of negative affectivity on measures of well-­ being versus job satisfaction and organizational commitment’, Anxiety, Stress & Coping: An International Journal, 15, 3 (2002), pp. 231–44. 32 For problems with the concept of job satisfaction, see R. Hodson, ‘Workplace behaviors’, Work and Occupations, August 1991, pp.  271–90; and H. M. Weiss and R. Cropanzano, ‘Affective events theory: a theoretical discussion of the structure, causes and consequences of affective experiences at work’, in B. M. Staw and L. L. Cummings (eds), Research in Organizational Behavior, vol. 18 (Greenwich, CT: JAI Press, 1996), pp. 1–3. 33 The Wyatt Company’s 1989 national WorkAmerica study identified 12 dimensions of satisfaction: work organization, working conditions, communications, job performance and performance review, co-workers, supervision, company management, pay, benefits, career development and training, job content and satisfaction, and company image and change. 34 See E. Spector, Job Satisfaction: Application, Assessment, Causes, and Consequences (Thousand Oaks, CA: Sage, 1997), p. 3. 35 J. Wanous, A. E. Reichers and M. J. Hudy, ‘Overall job satisfaction: how good are single-item measures?’, Journal of Applied Psychology, April 1997, pp. 247–52. 36 European Foundation for the Improvement of Living and Working Conditions, ‘Impact of the crisis on working conditions in Europe’, 8 July 2013, http://www.eurofound.europa.eu/publications/executive-summary/2013/working-conditions/impact-ofthe-crisis-on-working-conditions-in-europe-executive-summary 37 Chartered Institute of Personnel and Development (CIPD) How Engaged are British Employees?, November 2006.

80  3 Attitudes and job satisfaction 38 J. Barling, E. K. Kelloway and R. D. Iverson, ‘High-quality work, job satisfaction, and occupational injuries’, Journal of Applied Psychology, 88, 2 (2003), pp. 276–83; F. W. Bond and D. Bunce, ‘The role of acceptance and job control in mental health, job satisfaction, and work performance’, Journal of Applied Psychology, 88, 6 (2003), pp. 1057–67. 39 S. E. Humphrey, J. D. Nahrgang and F. P. Morgeson, ‘Integrating motivational, social, and contextual work design features: a meta-analytic summary and theoretical extension of the work design literature’, Journal of Applied Psychology, 92, 5 (2007), pp. 1332–56; and D. S. Chiaburu and D. A. Harrison, ‘Do peers make the place? Conceptual synthesis and meta-­analysis of coworker effect on perceptions, attitudes, OCBs, and performance’, Journal of Applied Psychology, 93, 5 (2008), pp. 1082–103. 40 See Fourth European Working Conditions Survey, European Foundation for the Improvement of Living and Working Conditions, 2007; Measuring job satisfaction in surveys – Comparative analytical report European Foundation for the Improvement of Living and Working Conditions, 2007; M. Rose, ‘Good deal, bad deal? Job satisfaction in occupations’, Work Employment Society, 17 (2003) pp. 503–30; and N. Ahn and J. Garcia ‘Job satisfaction in Europe’, FEDEA working paper series 2004–16, (2004). Available at http://www.fedea.es/pub/ Papers/2004/dt2004–16.pdf. 41 J. Vieira and L. Diaz-Serrano, ‘Low pay, higher pay and job satisfaction within the European Union: empirical evidence from fourteen countries’, Discussion Paper No. 1558, Institute for the Study of Labor (2005). Available at ftp://repec.iza.org/RePEc/ Discussion paper/dp1558.pdf. 42 See, for example, T. A. Judge, R. F. Piccolo, N. P. Podsakoff, J. C. Shaw and B. L. Rich, ‘Can happiness be “earned”?: The relationship between pay and job satisfaction’, working paper, University of Florida, 2005. 43 E. Diener, E. Sandvik, L. Seidlitz and M. Diener, ‘The relationship between income and subjective well-being: relative or absolute?’, Social Indicators Research, 28 (1993), pp. 195–223. 44 See careershifters.org http://www.careershifters.org/node/513. Accessed 19 June 2008. 45 E. Diener and M. E. P. Seligman, ‘Beyond money: toward an economy of well-being’, Psychological Science in the Public Interest, 5, 1 (2004), pp. 1–31; and A. Grant, ‘Money=happiness? That’s rich: here’s the science behind the axiom’, The (South Mississippi) Sun Herald, 8 January 2005. 46 T. A. Judge and C. Hurst, ‘The benefits and possible costs of positive core self-evaluations: a review and agenda for future research’, in D. Nelson and C. L. Cooper (eds), Positive Organizational Behaviour (London, UK: Sage Publications, 2007), pp. 159–74. 47 M. T. Iaffaldano and M. Muchinsky, ‘Job satisfaction and job performance: a meta-analysis’, Psychological Bulletin, March 1985, pp. 251–73. 48 T. A. Judge, C. J. Thoresen, J. E. Bono and G. K. Patton, ‘The job satisfaction–job performance relationship: a qualitative and quantitative review’, Psychological Bulletin, May 2001, pp. 376–407; T. Judge, S. Parker, A. E. Colbert, D. Heller and R. Ilies, ‘Job satisfaction: a cross-cultural review’, in N. Anderson, D. S. Ones, H. K. Sinangil and C. Viswesvaran (eds), Handbook of Industrial, Work, & Organizational Psychology, vol. 2 (Thousand Oaks, CA: Sage, 2001), p. 41. 49 C. N. Greene, ‘The satisfaction–performance controversy’, Business Horizons, February 1972, pp. 31–41; E. E. Lawler, III, Motivation in Organizations (Monterey, CA: Brooks/Cole,

1973); and M. M. Petty, G. W. McGee and J. W. Cavender, ‘A meta-analysis of the relationship between individual job satisfaction and individual performance’, Academy of Management Review, October 1984, pp. 712–21. 50 See D. Farrell, ‘Exit, voice, loyalty, and neglect as responses to job dissatisfaction: a multidimensional scaling study’, Academy of Management Journal, December 1983, pp. 596–606; C. E. Rusbult, D. Farrell, G. Rogers and A. G. Mainous, III, ‘Impact of exchange variables on exit, voice, loyalty, and neglect: an integrative model of responses to declining job satisfaction’, Academy of Management Journal, September 1988, pp. 599–627; M. J. Withey and W. H. Cooper, ‘Predicting exit, voice, loyalty, and neglect’, Administrative Science Quarterly, December 1989, pp. 521–39; J. Zhou and J. M. George, ‘When job dissatisfaction leads to creativity: encouraging the expression of voice’, Academy of Management Journal, August 2001, pp. 682–96; J. B. Olson-Buchanan and W. R. Boswell, ‘The role of employee loyalty and formality in voicing discontent’, Journal of Applied Psychology, December 2002, pp. 1167–74; and A. Davis-Blake, J. P. Broschak and E. George, ‘Happy together? How using nonstandard workers affects exit, voice, and loyalty among standard employees’, Academy of Management Journal, 46, 4 (2003), pp. 475–85. 51 R. B. Freeman, ‘Job satisfaction as an economic variable’, American Economic Review, January 1978, pp. 135–41. 52 T. A. Judge, C. J. Thoresen, J. E. Bono and G. K. Patton, ‘The job satisfaction–job performance relationship: a qualitative and quantitative review’, Psychological Bulletin, May 2001, pp. 376–407. 53 C. Ostroff, ‘The relationship between satisfaction, attitudes, and performance: an organizational level analysis’, Journal of Applied Psychology, December 1992, pp. 963–74; A. M. Ryan, M. J. Schmit and R. Johnson, ‘Attitudes and effectiveness: examining relations at an organizational level’, Personnel Psychology, Winter 1996, pp. 853–82; and J. K. Harter, F. L. Schmidt and T. L. Hayes, ‘Business-unit level relationship between employee satisfaction, employee engagement, and business outcomes: a meta-analysis’, Journal of Applied Psychology, April 2002, pp. 268–79. 54 See P. Podsakoff, S. B. MacKenzie, J. B. Paine and D. G. Bachrach, ‘Organizational citizenship behaviors: a critical review of the theoretical and empirical literature and suggestions for future research’, Journal of Management, 26, 3 (2000), pp. 513–563. 55 B. J. Hoffman, C. A. Blair, J. P. Maeriac and D. J. Woehr, ‘Expanding the criterion domain? A quantitative review of the OCB literature’, Journal of Applied Psychology, 92, 2 (2007), pp. 555–66. 56 S. L. Blader and T. R. Tyler, ‘Testing and extending the group engagement model: linkages between social identity, procedural justice, economic outcomes, and extrarole behavior’, Journal of Applied Psychology, 94, 2 (2009), pp. 445–64. 57 D. S. Chiaburu and D. A. Harrison, ‘Do peers make the place? conceptual synthesis and meta-analysis of coworker effect on perceptions, attitudes, OCBs, and performance’, Journal of Applied Psychology, 93, 5 (2008), pp. 1082–103. 58 R. Ilies, I. S. Fulmer, M. Spitzmuller and M. D. Johnson, ‘Personality and citizenship behavior: the mediating role of job satisfaction’, Journal of Applied Psychology, 94 (2009), pp. 945–59. 59 R. Ilies, B. A. Scott and T. A. Judge, ‘The interactive effects of personal traits and experienced states on intraindividual patterns of citizenship behavior’, Academy of Management Journal, 49 (2006), pp. 561–75.

ENDNOTES   81 60 See, for instance, B. Schneider and D. E. Bowen, ‘Employee and customer perceptions of service in banks: replication and extension’, Journal of Applied Psychology, August 1985, pp. 423–33; D. J. Koys, ‘The effects of employee satisfaction, organizational citizenship behavior, and turnover on organizational effectiveness: a unit-level, longitudinal study’, Personnel Psychology, Spring 2001, pp. 101–14; and J. Griffith, ‘Do satisfied employees satisfy customers? support-services staff morale and satisfaction among public school administrators, students, and parents’, Journal of Applied Social Psychology, August 2001, pp. 1627–58. 61 M. J. Bitner, B. H. Booms and L. A. Mohr, ‘Critical service encounters: the employee’s viewpoint’, Journal of Marketing, October 1994, pp. 95–106. 62 E. A. Locke, ‘The nature and causes of job satisfaction’, in M. D. Dunnette (ed.), Handbook of Industrial and Organizational Psychology (Chicago, IL: Rand McNally, 1976), p. 1331; R. D. Hackett and R. M. Guion, ‘A reevaluation of the absenteeism–job satisfaction relationship’, Organizational Behavior and Human Decision Processes, June 1985, pp. 340–81; K. D. Scott and G. S. Taylor, ‘An examination of conflicting findings on the relationship between job satisfaction and absenteeism: a meta-­ analysis’, Academy of Management Journal, September 1985, pp. 599–612; R. Steel and J. R. Rentsch, ‘Influence of cumulation strategies on the long-range prediction of absenteeism’, Academy of Management Journal, December 1995, pp. 1616–34; and Johns, ‘The psychology of lateness, absenteeism, and turnover’, p. 237. 63 J. P. Hausknecht, N. J. Hiller and R. J. Vance, ‘Work-unit absenteeism: effects of satisfaction, commitment, labor market conditions, and time’, Academy of Management Journal, 51, 6 (2008), pp. 1123–245. 64 W. Hom and R. W. Griffeth, Employee Turnover (Cincinnati, OH: South-Western Publishing, 1995); R. W. Griffeth, P. W. Hom and S. Gaertner, ‘A meta-analysis of antecedents and correlates of employee turnover: update, moderator tests, and research implications for the next millennium’, Journal of Management, 26, 3 (2000), p. 479. 65 T. H. Lee, B. Gerhart, I. Weller and C. O. Trevor, ‘Understanding voluntary turnover: path-specific job satisfaction effects and the importance of unsolicited job offers’, Academy of Management Journal, 51, 4 (2008), pp. 651–71. 66 K. A. Hanisch, C. L. Hulin and M. Roznowski, ‘The importance of individuals’ repertoires of behaviors: the scientific

appropriateness of studying multiple behaviors and general attitudes’, Journal of Organizational Behavior, 19, 5 (1998), pp. 463–80. 67 K. Holland, ‘Inside the minds of your employees’, New York Times, 28 January 2007, p. B1; ‘Study sees link between morale and stock price’, Workforce Management, 27 February 2006, p. 15; and ‘The workplace as a solar system’, New York Times, 28 October 2006, p. B5. 68 E. White, ‘How surveying workers can pay off’, Wall Street Journal, 18 June 2007, p. B3. 69 M. J. Gelfand, M. Erez and Z. Aycan, ‘Cross-cultural ­organizational behavior’, Annual Review of Psychology, 58 (2007), pp.  479–514; A. S. Tsui, S. S. Nifadkar and A. Y. Ou, ‘Cross-national, cross-cultural organizational behavior research: advances, gaps, and recommendations’, Journal of Management, June 2007, pp. 426–78. 70 M. Benz and B. S. Frey, ‘The value of autonomy: evidence from the self-employed in 23 countries’, Working paper 173, Institute for Empirical Research in Economics, University of Zurich, November 2003. (http://ssrn.com/abstract=475140); and P. Warr, Work, Happ­iness, and Unhappiness (Mahwah, NJ: Laurence Erlbaum, 2007). 71 Harrison, Newman, and Roth, ‘How important are job ­attitudes?, Meta-analytic comparisons of integrative behavioral outcomes and time sequences’, Academy of Management Journal, 49, 2 (2006), pp. 320–321. 72 T. A. Judge, et al., ‘Job satisfaction: a cross-cultural review’; T. A. Judge and A. H. Church, ‘Job satisfaction: research and practice’, in C. L. Cooper and E. A. Locke (eds), Industrial and Organizational Psychology: Linking Theory with Practice (Oxford, UK: Blackwell, 2000), pp. 166–98; L. Saari and T. A. Judge, ‘Employee attitudes and job satisfaction’, Human Resource Management, 43, 4 (2004), pp. 395–407. 73 See, for instance, R. D. Arvey, B. McCall, T. J. Bouchard, Jr and P. Taubman, ‘Genetic influences on job satisfaction and work values’, Personality and Individual Differences, July 1994, pp. 21–33; D. Lykken and A. Tellegen, ‘Happiness is a stochastic phenomenon’, Psychological Science, May 1996, pp. 186–89; and D. Lykken and M. Csikszentmihalyi, ‘Happiness – stuck with what you’ve got?’, Psychologist, September 2001, pp. 470–72; and ‘double take,’ UNH Magazine, Spring 2000 (www.unhmagazine. unh.edu/sp00/twinssp00.html).

CHAPTER 4 Personality and values Learning objectives After studying this chapter, you should be able to: 1 Define personality, describe how it is measured and explain the factors that determine an individual’s personality. 2 Describe the Myers-Briggs Type Indicator personality framework and assess its strengths and weaknesses. 3 Identify the key traits in the Big Five personality model. 4 Demonstrate how the Big Five traits predict behaviour at work. 5 Identify other personality traits relevant to oB. 6 Describe how the situation affects whether personality predicts behaviour. 7 Define values, demonstrate the importance of values and contrast terminal and instrumental values. 8 Identify the dominant values in today’s workforce. 9 Identify Hofstede’s five value dimensions of national culture.

It’s not hard to make decisions when you know what your values are. Roy Disney, senior executive of the Walt Disney Company and nephew of Walt Disney

Banker to the poorest of the poor

Roberto Serra - Iguana Press/Getty Images

In the wake of the financial crisis and a series of scandals and reputational blows, bankers have been singled out as lacking positive values such as accountability, integrity, trust, care and fairness. However, there is one banker in particular who has demonstrated these values, and plenty more, all along. When Bangladesh suffered a famine in 1974, Muhammad Yunus (a professor of economics at the University of Chittagong) felt that he needed to do something more for the poor. He began a research project to study how to lend to the rural poor who did not qualify for traditional bank loans and were forced to deal with predatory lenders charging exorbitant interest. The result of this work was the establishment of the Grameen Bank in 1983 that ‘has reversed conventional banking practice by removing the need for collateral and created a banking system based on mutual trust, accountability, participation and creativity. Grameen Bank provides credit to the poorest of the poor in rural Bangladesh, without any collateral.’

According to Yunus, poverty means being deprived of all human value. He regards micro-credit (small loans) both as a human right and as an effective means of emerging from poverty: lend the poor money in amounts which suit them, teach them a few basic financial principles, and they generally manage on their own, Yunus claims. The bank, the ideas and Yunus himself have faced some criticism, but the values that have driven Yunus and the bank have been recognized at the highest levels. Muhammad Yunus and Grameen Bank were awarded the Nobel Peace Prize for their work to ‘create economic and social development from below’. And what of the traditional banks? There is evidence they are addressing the issue of values. The Financial Times reported that all 98,000 employees of Deutsche Bank, about 13,000 senior bankers at Goldman Sachs, and Barclays’ 140,000 staff have been or are being taken through programmes aimed at reinforcing codes, values, behaviour and a strong, positive corporate culture.

Sources: ‘Muhammad Yunus – Facts’. Nobelprize.org. Nobel Media AB 2014, 4 June 2015. http://www.nobelprize.org/nobel_prizes/peace/laureates/2006/yunusfacts.html; A. Hill, ‘Bankers back in the classroom’, Financial Times, 16 October 2013; www.grameen.com

84  4 Personality and values

Our personalities shape our behaviours. So if we want to better understand the behaviour of someone in an organization, it helps if we know something about their personality. In the first half of this chapter, we review the research on personality and its relationship to behaviour. In the latter half, we look at how values shape many of our work-related behaviours and even entire organizations such as Muhammad Yunus and the Grameen Bank.

REFLECTION Describe your personality. How does your personality influence how you behave?

Personality 1 Define personality, describe how it is measured and explain the factors that determine an individual’s personality.

Why are some people quiet and passive, while others are loud and aggressive? Are certain personality types better adapted than others for certain job types? Before we can answer these questions, we need to address a more basic one: What is personality?

What is personality? When we talk of personality, we don’t mean that a person has charm, a positive attitude towards life or a smiling face. When psychologists talk of personality, they mean a dynamic concept describing the growth and development of a person’s whole psychological system.

Defining personality

personality The sum total of ways in which an individual reacts and interacts with others.

The definition of personality we most frequently use was produced by Gordon Allport nearly 70 years ago. He said personality is ‘the dynamic organization within the individual of those psychophysical systems that determine his unique adjustments to his environment’.1 For our purposes, you should think of personality as the sum total of ways in which an individual reacts to and interacts with others. We most often describe it in terms of the measurable traits a person exhibits.

Measuring personality The most important reason managers need to know how to measure personality is that research has shown personality tests are useful in hiring decisions and help managers forecast who is best for a job.2 The most common means of measuring personality is through self-report surveys, with which individuals evaluate themselves on a series of factors, such as ‘I worry a lot about the future.’ Though self-report measures work well when well constructed, one weakness is that the respondent might lie or practise impression management to create a good impression. When people know their personality scores are going to be used for hiring decisions, they rate themselves as about half a standard deviation more conscientious and emotionally stable than if they are taking the test just to learn more about themselves.3 Another problem is accuracy. A perfectly good candidate could have been in a bad mood when taking the survey, and that will make the scores less accurate. Observer-ratings surveys provide an independent assessment of personality. Here, a co-worker or another observer does the rating (sometimes with the subject’s knowledge and sometimes not). Though the results of self-report surveys and observer-ratings surveys are strongly correlated, research suggests observer-ratings surveys are a better predictor of success on the job.4 However, each can tell us something unique about an individual’s behaviour in the workplace. An analysis of a large number of observer-reported personality studies shows that a combination of self-report and observer-reports predicts performance better than any one type of information. The implication is clear: use both observer ratings and self-report ratings of personality when making important employment decisions.

Kiyoshi Ota/Bloomberg via Getty Images

Personality   85

Personality traits are enduring characteristics that describe an individual’s behaviour. Niklas Zennström, considered a role model for entrepreneurs, is described as energetic, enthusiastic, ambitious, courageous and determined. These traits have helped Zennström to be successful with many ventures including co-founding Skype (a project more than two dozen venture capitalists turned down), the online video distribution service Joost, and the technology company investment firm Atomico.

Personality determinants

heredity Factors determined at conception, one’s biological, physiological and inherent psychological makeup.

An early debate in personality research centered on whether an individual’s personality was the result of heredity or of environment. It appears to be a result of both. However, it might surprise you that research tends to support the importance of heredity over the environment. Heredity refers to factors determined at conception. Physical stature, facial attractiveness, gender, temperament, muscle composition and reflexes, energy levels and biological rhythms are generally considered to be either completely or substantially influenced by who your parents are – that is, by their biological, physiological and inherent psychological makeup. The heredity approach argues that the ultimate explanation of an individual’s personality is the molecular structure of the genes, located in the chromosomes. Researchers in many different countries have studied thousands of sets of identical twins who were separated at birth and raised separately.5 If heredity played little or no part in determining personality, you would expect to find few similarities between the separated twins. But the researchers found a lot in common. For almost every behavioural trait, a significant part of the variation between the twins turned out to be associated with genetic factors. For instance, one set of twins who had been separated for 39 years and raised 70 kilometres apart were found to drive the same model and colour car. They chain-smoked the same brand of cigarette, owned dogs with the same name, and regularly holidayed within a few kilometres of each other in a beach community 2,500 kilometres away. Researchers have found that genetics accounts for about 50 per cent of the personality differences and more than 30 per cent of the variation in occupational and leisure interests. Interestingly, the twin studies have suggested the parental environment doesn’t add much to our personality development. In other words, the personalities of identical twins raised in different households are more similar to each other than to the personalities of the siblings they were actually raised with. Ironically, the most important contribution our parents may have made to our personalities is giving us their genes!

86  4 Personality and values

personality traits Enduring characteristics that describe an individual’s behaviour.

This is not to suggest that personality never changes. Over periods of time, people’s personalities do change. Most research in this area suggests that while some aspects of our personalities do change over time, the rank orderings do not change very much. For example, people’s scores on measures of dependability tend to increase over time. However, there are still strong individual differences in dependability, and despite the fact that most of us become more responsible over time, people tend to change by about the same amount so that the rank order stays roughly the same.6 An analogy to intelligence may make this clearer. Children become smarter as they age so that nearly everyone is smarter at age 20 than they were at age 10. Still, if Sam is smarter than Leo at age 10, he is likely to be so at age 20, too. The same holds true with personality: if you are more dependable than your sibling now, that is likely to be true in 20 years, even though you both should become more dependable over time. Early work on the structure of personality tried to identify and label enduring characteristics that describe an individual’s behaviour. Popular characteristics include shy, aggressive, submissive, lazy, ambitious, loyal and timid. When someone exhibits these characteristics in a large number of situations, we call them personality traits.7 The more consistent the characteristic and the more frequently a trait occurs in diverse situations, the more important that trait is in describing the individual. A number of early efforts tried to identify the primary traits that govern behaviour.8 However, for the most part, they resulted in long lists of traits that were difficult to generalize from and provided little practical guidance to organizational decision makers. Two exceptions are the Myers-Briggs Type Indicator and the Big Five model, now the dominant frameworks for identifying and classifying traits.

The Myers-Briggs Type Indicator Myers-Briggs Type Indicator (MBTI) A personality test that taps four characteristics and classifies people into 1 of 16 personality types.

2  Describe the MyersBriggs Type Indicator personality framework and assess its strengths and weaknesses.

The Myers-Briggs Type Indicator (MBTI) is claimed to be the most widely used personality-­ assessment instrument in the world.9 More than 3.5 million questionnaires are completed worldwide every year, it is available in 19 languages and there are over 13,000 qualified users in Europe.10 It’s a 100-question personality test that asks people how they usually feel or act in particular situations. On the basis of their answers, individuals are classified as extroverted or introverted (E or I), sensing or intuitive (S or N), thinking or feeling (T or F) and judging or perceiving (J or P). These terms are defined as follows: ●

●

●

●

Extroverted versus introverted. Extroverted individuals are outgoing, sociable and assertive. Introverts are quiet and shy. Sensing versus intuitive. Sensing types are practical and prefer routine and order. They focus on details. Intuitives rely on unconscious processes and look at the ‘big picture’. Thinking versus feeling. Thinking types use reason and logic to handle problems. Feeling types rely on their personal values and emotions. Judging versus perceiving. Judging types want control and prefer their world to be ordered and structured. Perceiving types are flexible and spontaneous.

These classifications together describe 16 personality types, identifying every person by one trait from each of the four pairs. To illustrate, let’s take several examples. Introverted/Intuitive/ Thinking/Judging people (INTJs) are visionaries. They usually have original minds and great drive for their own ideas and purposes. They are sceptical, critical, independent, determined and often stubborn. ESTJs are organizers. They are realistic, logical, analytical and decisive and have a natural head for business or mechanics. They like to organize and run activities. The ENTP type is a conceptualizer. He or she is innovative, individualistic, versatile and attracted to entrepreneurial ideas. This person tends to be resourceful in solving challenging problems but may neglect routine assignments. The MBTI is widely used in practice by organizations including Siemans, Unipart, Ernst & Young, NXP and many hospitals and educational institutions. In spite of its popularity, the evidence is mixed as to whether the MBTI is a valid measure of personality – with most of the evidence suggesting that it isn’t.11 One problem is that it forces a person into either one type

Personality   87

OB IN THE NEWS

Facebook reveals secrets you haven’t shared by Bede McCarthy and Robert Cookson The increasing amount of personal information that can be gleaned by computer programs that track how people use Facebook has been revealed by an extensive academic study. Such programs can discern undisclosed private information such as Facebook users’ sexuality, drug-use habits and even whether their parents separated when they were young, according to the study by the University of Cambridge academics. In one of the biggest studies of its kind, scientists from the university’s psychometrics team and a Microsoftfunded research centre analysed data from 58,000 Facebook users to predict traits and other information

that were not provided in their profiles. As well as information such as sexuality and race, the algorithms were also accurate in predicting personality types and emotional stability. Facebook declined to comment. The study highlights growing concerns about social networks and how data trails can be mined for sensitive information, even when people attempt to keep information about themselves private. What could a company do with information about your personality? You may need to forget about that job you applied for … the company may have already decided your personality doesn’t fit.

Source: Adapted from Bede McCarthy and Robert Cookson, ‘Facebook reveals secrets you haven’t shared’, Financial Times, 11 March 2013. © The Financial Times Limited. All Rights Reserved. Pearson Education Ltd. is responsible for providing this ­adaptation of the original article.

3  Identify the key traits in the Big Five personality model.

Big Five model A personality assessment model that taps five basic dimensions. extroversion A personality dimension that describes someone who is sociable, gregarious and assertive. agreeableness A personality dimension that describes someone who is good-natured, cooperative and trusting.

or another (that is, you’re either introverted or extroverted). There is no in-between, though people can be both extroverted and introverted to some degree. The best we can say is that the MBTI can be a valuable tool for increasing self-awareness and providing career guidance. But because results tend to be unrelated to job performance, managers probably shouldn’t use it as a selection test for job candidates.

The Big Five personality model The MBTI may lack for strong supporting evidence, but the same can’t be said for the fivefactor model of personality typically called the Big Five model, or the ‘Big Five’. An impressive body of research supports its thesis that five basic dimensions underlie all others and encompass most of the significant variation in human personality.12 Moreover, test scores of these traits do a very good job of predicting how people behave in a variety of real-life situations.13 The Big Five factors are: ●

●

●

conscientiousness A personality dimension that describes someone who is responsible, dependable, persistent and organized.

●

Extroversion. The extroversion dimension captures one’s comfort level with relationships. Extroverts tend to be gregarious, assertive and sociable. Introverts tend to be reserved, timid and quiet. Agreeableness. The agreeableness dimension refers to an individual’s propensity to defer to others. Highly agreeable people are cooperative, warm and trusting. People who score low on agreeableness are cold, disagreeable and antagonistic. Conscientiousness. The conscientiousness dimension is a measure of reliability. A highly conscientious person is responsible, organized, dependable and persistent. Those who score low on this dimension are easily distracted, disorganized and unreliable. Emotional stability. The emotional stability dimension – often labelled by its converse, neuroticism – taps a person’s ability to withstand stress. People with positive emotional stability tend to be calm, self-confident and secure. Those with high negative scores tend to be nervous, anxious, depressed and insecure.

88  4 Personality and values emotional stability A personality dimension that characterizes someone as calm, self-confident, secure (positive) versus nervous, depressed and insecure (negative). openness to experience A personality dimension that characterizes someone in terms of imagination, sensitivity and curiosity.

4  Demonstrate how the Big Five traits predict behaviour at work.

●

Openness to experience. The openness to experience dimension addresses one’s range of interests and fascination with novelty. Extremely open people are creative, curious and artistically sensitive. Those at the other end of the openness category are conventional and find comfort in the familiar.

How do the Big Five traits predict behaviour at work? Research on the Big Five has found relationships between these personality dimensions and job performance.14 As the authors of the most-cited review put it: ‘The preponderance of evidence shows that individuals who are dependable, reliable, careful, thorough, able to plan, organized, hardworking, persistent, and achievement-oriented tend to have higher job performance in most if not all occupations.’15 In addition, employees who score higher in conscientiousness develop higher levels of job knowledge, probably because highly conscientious people learn more (a review of 138 studies revealed conscientiousness was rather strongly related to a student’s grade average).16 Higher levels of job knowledge then contribute to higher levels of job performance. Conscientious individuals who are more interested in learning than in just performing on the job are also exceptionally good at maintaining performance in the face of negative feedback.17 There can be ‘too much of a good thing’, however, as extremely conscientious individuals typically do not perform better than those who are simply above average in conscientiousness.18 Interestingly, conscientious people live longer because they take better care of themselves (they eat better and exercise more) and engage in fewer risky behaviours.19 Still, probably because they’re so organized and structured, conscientious people don’t adapt as well to changing contexts. Finally, they are often less creative than less conscientious people, especially artistically.20 Although conscientiousness is the Big Five trait most consistently related to job performance, the other traits are related to aspects of performance in some situation. All five traits also have other implications for work and for life. Let’s look at the implications of these traits one at a time. Figure 4.1 summarizes the discussion.

Big Five trait

Why it is relevant?

What does it affect?

• Less negative thinking and fewer negative emotions • Less hyper-vigilant

• Higher job & life satisfaction • Lower stress levels

Extroversion

• Better interpersonal skills • Greater social dominance • More emotionally expressive

• Higher performance* • Enhanced leadership • Higher job & life satisfaction

Openness

• Increased learning • More creative • More flexible & autonomous

• Training performance • Enhanced leadership • More adaptable to change

• Better liked • More compliant and conforming

• Higher performance* • Lower levels of deviant behaviour

• Greater effort & persistence • More drive and discipline • Better organized & planning

• Higher performance • Enhanced leadership • Greater longevity

Emotional stability

Agreeableness

Conscientiousness

* In jobs requiring significant teamwork or frequent interpersonal interactions.

Figure 4.1  Model of how Big Five traits influence OB criteria

Personality   89

Of the Big Five traits, emotional stability is most strongly related to life satisfaction, job satisfaction and low stress levels. This is probably true because high scorers are more likely to be positive and optimistic and experience fewer negative emotions. They are happier than those who score low. People low on emotional stability are hypervigilant (looking for problems or impending signs of danger) and are especially vulnerable to the physical and psychological effects of stress. Extroverts tend to be happier in their jobs and in their lives as a whole. They experience more positive emotions than do introverts, and they more freely express these feelings. They also tend to perform better in jobs that require significant interpersonal interaction, perhaps because they have more social skills – they usually have more friends and spend more time in social situations than introverts. Finally, extroversion is a relatively strong predictor of leadership emergence in groups; extroverts are more socially dominant, ‘take charge’ sorts of people, and they are generally more assertive than introverts.21 One downside is that extroverts are more impulsive than introverts; they are more likely to be absent from work and engage in risky behaviour.22 One study also found extroverts were more likely than introverts to lie during job interviews.23 Individuals who score high on openness to experience are more creative in science and art than those who score low. Because creativity is important to leadership, open people are more likely to be effective leaders, and more comfortable with ambiguity and change. They cope better with organizational change and are more adaptable in changing contexts. Recent evidence also suggests, however, that they are especially susceptible to workplace accidents.24 You might expect agreeable people to be happier than disagreeable people, and they are, but only slightly. When people choose romantic partners, friends or organizational team members, agreeable individuals are usually their first choice. Thus, agreeable individuals are better liked than disagreeable people, which explains why they tend to do better in interpersonally oriented jobs such as customer service. Agreeable people also are more compliant and rule-abiding. Agreeable children do better in school and as adults are less likely to get involved in drugs or excessive drinking.25 Thus, agreeable individuals are less likely to engage in organizational deviance. One downside of agreeableness is that it is associated with lower levels of career success (especially earnings). This may occur because agreeable individuals are poorer negotiators; they are so concerned with pleasing others that they often don’t negotiate as much for themselves as do others.26

Other personality traits relevant to OB 5  Identify other personality traits relevant to OB.

Although the Big Five traits have proven to be highly relevant to OB, they don’t exhaust the range of traits we can use to describe someone’s personality. Now we’ll look at other, more specific, personality attributes that have been found to be powerful predictors of behaviour in organizations. The first relates to one’s core self-evaluation. The others are Machiavellianism, narcissism, self-monitoring, propensity for risk taking and the Type A and proactive personalities and other-orientation.

Personality ●

A research study looking at managerial level and personality revealed that conscientiousness, extroversion and intuition were positively correlated with the respondent’s managerial level.

●

A survey of 2,195 UK employees concluded that, by a clear margin, the single most common cause of workplace conflict is differences in personality or styles of working.

FACE THE FACTS ●

Interviews with 1,000 managers in charge of recruitment revealed personality as the most important factor in graduate selection.

Source: See J. Moutafi, A. Furnham and J. Crump, ‘Is managerial level related to personality?’, British Journal of Management, 18, 3 (2007), p. 272; Getting under the skin of workplace conflict: tracing the experiences of employees, CIPD, April 2015; Q. Reade, ‘Employers look at personality when hiring graduates’, Personnel Today, 21 May 2002.

Krisztian Bocsi/Bloomberg via Getty Images

90  4 Personality and values

People with positive core self-evaluations perform better than others because they set more ambitious goals, are more committed to their goals and persist longer at attempting to reach these goals. There are few people that demonstrate what a positive core self-evaluation can help to achieve more than Angela Merkel, Germany’s first woman Chancellor. Described as having a no-frills confidence and competence, since claiming victory in the German elections in 2005, she has played a crucial role in navigating the financial crisis, became the longest-serving elected European Union head of state and immensely influential in Europe, and has been named the most powerful women in the world by Forbes.

Core self-evaluation core self-evaluation The degree to which an individual likes or dislikes himself or herself, whether the person sees himself or herself as capable and effective, and whether the person feels in control of his or her environment or powerless over the environment.

People differ in the degree to which they like or dislike themselves and whether they see themselves as capable and effective. This self-perspective is the concept of core self-evaluation. People who have positive core self-evaluations like themselves and see themselves as effective, capable and in control of their environment. Those with negative core self-evaluations tend to dislike themselves, question their capabilities and view themselves as powerless over their environment.27 Core self-evaluations relate to job satisfaction because people with positive core self-evaluations see more challenge in their job and actually attain more complex jobs (see discussion in Chapter 3). But what about job performance? People with positive core self-evaluations perform better than others because they set more ambitious goals, are more committed to their goals and persist longer at attempting to reach these goals. For example, one study of life insurance agents found that core self-evaluations were critical predictors of performance. In life insurance sales, 90 per cent of sales calls end in rejection, so agents have to believe in themselves to persist. In fact, this study showed that the majority of successful salespersons had positive core self-evaluations.28 Such people also provide better customer service, are more popular co-workers, and have careers that both begin on better footing and ascend more rapidly over time.29 Some evidence suggests that individuals high in core self-evaluations perform especially well if they also feel their work provides meaning and is helpful to others.30 You might wonder whether someone can be too positive. In other words, what happens when someone thinks he is capable, but he is actually incompetent? One study of Fortune 500 CEOs, for example, showed that many are overconfident, and their perceived infallibility often causes them to make bad decisions.31 Teddy Forstmann, chairman of the global sports marketing giant IMG, said of himself, ‘I know God gave me an unusual brain. I can’t deny that. I have a God-given talent for seeing potential.’32 One might say that people like Forstmann are overconfident, but very often we humans sell ourselves short and are less happy and effective

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than we could be because of it. If we decide we can’t do something, for example, we won’t try, and not doing it only reinforces our self-doubts.

Machiavellianism

Machiavellianism The degree to which an individual is pragmatic, maintains emotional distance and believes that ends can justify means.

Kuzi is a young bank manager in Taiwan. He’s had three promotions in the past four years. Kuzi makes no apologies for the aggressive tactics he’s used to propel his career upwards. ‘I’m prepared to do whatever I have to do to get ahead,’ he says. Kuzi would properly be called Machiavellian. Marie led her Brussels-based company last year in sales performance. She’s assertive and persuasive, and she’s effective at manipulating customers to buy her product line. Many of her colleagues, including her boss, also consider Marie as Machiavellian. The personality characteristic of Machiavellianism (often abbreviated Mach) is named after Niccolo Machiavelli, who wrote in the sixteenth century on how to gain and use power. An individual high in Machiavellianism is pragmatic, maintains emotional distance and believes that ends can justify means. ‘If it works, use it’, is consistent with a high-Mach perspective. A considerable amount of research has been directed towards relating high- and low-Mach personalities to certain behavioural outcomes.33 High Machs manipulate more, win more, are persuaded less and persuade others more than do low Machs.34 They like their jobs less, are more stressed by their work, and engage in more deviant work behaviours.35 Yet high-Mach outcomes are moderated by situational factors. It has been found that high Machs flourish (1) when they interact face-to-face with others rather than indirectly; (2) when the situation has a minimal number of rules and regulations, thus allowing latitude for improvization; and (3) when emotional involvement with details irrelevant to winning distracts low Machs.36 Thus, whether high Machs make good employees depends on the type of job. In jobs that require bargaining skills (such as labour negotiation) or that offer substantial rewards for winning (such as commissioned sales), high Machs will be productive. But if the ends can’t justify the means, if there are absolute standards of behaviour, or if the three situational factors we noted are not in evidence, our ability to predict a high Mach’s performance will be severely curtailed.

Narcissism

narcissism The tendency to be arrogant, have a grandiose sense of self-importance, require excessive admiration and have a sense of entitlement.

Hans likes to be the centre of attention. He likes to look at himself in the mirror a lot. He has extravagant dreams and seems to consider himself a person of many talents. Hans is a narcissist. The term is from the Greek myth of Narcissus, the story of a man so vain and proud that he fell in love with his own image. In psychology, narcissism describes a person who has a grandiose sense of self-importance, requires excessive admiration, has a sense of entitlement and is arrogant. Evidence suggests that narcissists are more charismatic and thus more likely to emerge as leaders, and they may even display better psychological health (at least as they self-report).37 An example of narcissistic personality might be Volvo’s Pehr Gyllenhammar. His visionary leadership was initially very popular; however, over time Gyllenhammar felt he could ignore the concerns of his operational managers. He pursued risky and expensive business deals, which he publicized on television and in the press. On one level, you can ascribe Gyllenhammar’s falling out of touch with his workforce simply to poor strategy. But it is also possible to attribute it to his narcissistic personality. His overestimation of himself led him to believe that others would want him to be the leader of a multinational enterprise. In turn, these fantasies led him to pursue a merger with Renault, which was tremendously unpopular with Swedish employees. In the end, Gyllenhammar had no option but to resign. Despite having some advantages, most evidence suggests that narcissism is undesirable. A study found that while narcissists thought they were better leaders than their colleagues, their supervisors actually rated them as worse leaders. For example, an Oracle executive described that company’s CEO Larry Ellison as follows: ‘The difference between God and Larry is that God does not believe he is Larry.’38 Because narcissists often want to gain the admiration of others and receive affirmation of their superiority, they tend to ‘talk down’ to those who threaten them, treating others as if they were inferior. Narcissists also tend to be selfish and exploitive, and they often carry the attitude that others exist for their benefit.39 Studies indicate that narcissists are rated by their bosses as less effective at their jobs than others, particularly when it comes to helping other people.40

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Self-monitoring Joyce McIntyre is always in trouble at work. Though she’s competent, hardworking and productive, her performance reviews tend to rate her no better than average, and she seems to have made a career of irritating bosses. Joyce’s problem is that she’s politically inept. She’s unable to adjust her behaviour to fit changing situations. As she puts it, ‘I’m true to myself. I don’t remake myself to please others.’ We would be correct in describing Joyce as a low self-monitor. Self-monitoring refers to an individual’s ability to adjust their behaviour to external, situational factors.41 Individuals high in self-monitoring show considerable adaptability in adjusting their behaviour to external situational factors. They are highly sensitive to external cues and can behave differently in different situations. High self-monitors are capable of presenting striking contradictions between their public persona and their private self. Low self-monitors, like Joyce, can’t disguise themselves in that way. They tend to display their true dispositions and attitudes in every situation; hence, there is high behavioural consistency between who they are and what they do. The evidence indicates that high self-monitors tend to pay closer attention to the behaviour of others and are more capable of conforming than are low self-monitors.42 They also receive better performance ratings, are more likely to emerge as leaders and show less commitment to their organizations.43 In addition, high self-monitoring managers tend to be more mobile in their careers, receive more promotions (both internal and cross-organizational) and are more likely to occupy central positions in an organization.44

self-monitoring A personality trait that measures an individual’s ability to adjust his or her behaviour to external, situational factors.

Risk taking

John MacDougall/AFP/Getty Images

Rogue traders stand out for their willingness to take risks. Jerome Kerviel’s highly speculative and unauthorized trading lost the French bank, Société Générale, almost €5 billion. In 1995, Nick Leeson’s unsupervised risky trading caused the collapse of Barings Bank, the United Kingdom’s oldest investment bank. People differ in their willingness to take chances. This propensity to assume or avoid risk has been shown to have an impact on how long it takes managers to make a decision and how

The rogue trade, Nick Leeson, caused the collapse of the United Kingdom’s oldest investment bank with unsupervised, unauthorized and highly speculative trading working at its office in Singapore. Leeson caused the collapse of Barings Bank, founded in 1762, in just a few months having generated losses of over €1 billion. As the losses grew, rather than admit the financial problems at a time when the bank could have recovered, Leeson requested extra funds to continue trading, hoping to extricate himself from the mess by more risky deals.

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much information they require before making a choice. For instance, 79 managers worked on simulated personnel exercises that required them to make hiring decisions.45 High risktaking managers made more rapid decisions and used less information in making their choices than did the low risk-taking managers. Interestingly, decision accuracy was the same for both groups. Although previous studies have shown managers in large organizations to be more risk averse than growth-oriented entrepreneurs who actively manage small businesses, recent findings suggest that managers in large organizations may actually be more willing to take risks than entrepreneurs.46 For the work population as a whole, there are also differences in risk propensity.47 As a result, it makes sense to recognize these differences and even to consider aligning risk-taking propensity with specific job demands. For instance, a willingness to take risks might prove a major obstacle to an accountant who performs auditing activities. This job might be better filled by someone with a low risk-taking propensity.

Type A personality Type A personality Aggressive involvement in a chronic, incessant struggle to achieve more and more in less and less time and, if necessary, against the opposing efforts of other things or other people.

Do you know people who are excessively competitive and always seem to be experiencing a sense of time urgency? If you do, it’s a good bet those people have Type A personalities. A person with a Type A personality is ‘aggressively involved in a chronic, incessant struggle to achieve more and more in less and less time, and, if required to do so, against the opposing efforts of other things or other persons’.48 Type A’s: 1. are always moving, walking and eating rapidly; 2. feel impatient with the rate at which most events take place; 3. strive to think or do two or more things at once; 4. cannot cope with leisure time; 5. are obsessed with numbers, measuring their success in terms of how many or how much of

everything they acquire. In contrast to the Type A personality is the Type B, who is exactly opposite. Type B’s are ‘rarely harried by the desire to obtain a wildly increasing number of things or participate in an endless growing series of events in an ever-decreasing amount of time’.49 Type B’s never suffer from a sense of time urgency with its accompanying impatience, can relax without guilt, and so on. Type A’s operate under moderate to high levels of stress. They subject themselves to more or less continuous time pressure, creating for themselves a life of deadlines. These characteristics result in some rather specific behavioural outcomes. For example, Type A’s are fast workers because they emphasize quantity over quality. In managerial positions, Type A’s demonstrate their competitiveness by working long hours and, not infrequently, making poor decisions because they make them too fast. Type A’s are also rarely creative. Because of their concern with quantity and speed, they rely on past experiences when faced with problems. They will not allocate the time necessary to develop unique solutions to new problems. They rarely vary in their responses to specific challenges in their milieu; hence, their behaviour is easier to predict than that of Type B’s. Do Type A’s differ from Type B’s in their ability to get hired? The answer appears to be ‘yes’.50 Type A’s do better than Type B’s in job interviews because they are more likely to be judged as having desirable traits such as high drive, competence, aggressiveness and success motivation.

Proactive personality proactive personality People who identify opportunities, show initiative, take action and persevere until meaningful change occurs.

Did you ever notice that some people actively take the initiative to improve their current circumstances or create new ones? These are proactive personalities.51 Those with a proactive personality identify opportunities, show initiative, take action and persevere until meaningful change occurs, compared to others who passively react to situations. Not surprisingly, proactive individuals have many desirable behaviours that organizations covet. They also have higher levels of job performance and career success.52 Are there downsides to having a proactive personality?

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A recent study of 231 Flemish unemployed individuals found that proactive personality was negatively related to persistence in job searching; proactive individuals abandoned their job searches sooner. However, it may be that proactivity includes knowing when to step back and reconsider alternatives in the face of failure.53 Proactive personality may be important for work teams. One study of 95 R&D teams in 33 Chinese companies revealed that teams with high-average levels of proactive personality were more innovative.54 Like other traits, proactive personality is affected by the context. One study of bank branch teams in China found that if a team’s leader was not proactive, the benefits of the team’s proactivity will lie dormant or, worse, be suppressed by the leader.55 In short, while proactive personality may be important to individual and team performance, like all traits it may have downsides and its effectiveness may depend on the context.

Personality and situations 6  Describe how the situation affects whether personality predicts behaviour.

Earlier we discussed how research shows that heredity is more important than the environment in developing our personalities. The environment is not irrelevant, though. Some personality traits like the Big Five tend to be effective to almost any environment or situation. For example, research indicates that conscientiousness is helpful to the performance of most jobs, and extroversion is related to emergence as a leader in most situations. Increasingly, we are learning that the effect of particular traits on organizational behaviour depends on the situation. Two theoretical frameworks help explain how this works.

Situation strength

Situation-strength theory A theory indicating that the way personality translates into behaviour depends on the strength of the situation.

Imagine you are in a meeting with your department. How likely are you to walk out in the middle of the meeting, shout at someone, turn your back on the group or fall asleep? Probably highly unlikely. Now consider that you are working from home. You might work in your nightwear, listen to loud music or take a short sleep. Situation-strength theory proposes that the way personality translates into behaviour depends on the strength of the situation. By situation strength, we mean the degree to which norms, cues or standards dictate appropriate behaviour. Strong situations pressure us to exhibit the right behaviour, clearly show us what that behaviour is and discourage the wrong behaviour. In weak situations, conversely, ‘anything goes’, and thus we are freer to express our personality in behaviour. Thus, research suggests that personality traits better predict behaviour in weak situations than in strong ones.

‘We can accurately judge individuals’ personalities a few seconds after meeting them’ Surprisingly, this statement appears to be true. Research indicates that individuals can accurately appraise others’ personalities only a few seconds after first meeting them. This ‘zero acquaintance’ approach shows that regardless of the way in which people first meet someone, whether in person or online, their first judgements about the other’s personality have validity. In one study, for example, individuals were asked to introduce themselves in, on average, 7.4 seconds. Observers’ ratings of those individuals’ extroversion were significantly correlated with the individuals’ self-reported extroversion. While some factors make these first impressions, or ‘thin slices’, more accurate, they have only a modest effect. For example, some traits like extroversion are easier to perceive than others upon initial acquaintance, but less obvious traits

MYTH OR SCIENCE?

like self-esteem and emotional stability are also often judged fairly accurately by others. Even being forced to make intuitive, quick judgements rather than deliberate evaluations does not seem to undermine the accuracy of the appraisals. The moderate accuracy of ‘thin slices’ helps to explain the moderate validity of employment interviews. Specifically, research shows that interviewers make up their minds about candidates within two minutes of first meeting them. While this is hardly an ideal way to make important employment decisions, the research on personality also shows that these judgements do have some level of validity. Source: S. Hirschmüller, B. Egloff, S. Nestler and D. Mitja, ‘The dual lens model: a comprehensive framework for understanding self–other agreement of personality judgments at zero acquaintance’, Journal of Personality and Social Psychology, 104 (2013), pp. 335–53.

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Researchers have analysed situation strength in organizations in terms of four elements:56 1. Clarity, or the degree to which cues about work duties and responsibilities are available and

clear. Jobs high in clarity produce strong situations because individuals can readily determine what to do, thus increasing the chances that everyone behaves similarly. For example, the job of janitor probably provides higher clarity about what needs to be done than the job of nanny. 2. Consistency, or the extent to which cues regarding work duties and responsibilities are

compatible with one another. Jobs with high consistency represent strong situations because all the cues point towards the same desired behaviour. The job of acute care nurse, for example, probably has higher consistency than the job of manager. 3. Constraints, or the extent to which individuals’ freedom to decide or act is limited by forces

outside their control. Jobs with many constraints represent strong situations because an individual has limited individual discretion. Bank examiner, for example, is probably a job with stronger constraints than forest ranger. 4. Consequences, or the degree to which decisions or actions have important implications for

the organization or its members, clients, supplies, and so on. Jobs with important consequences represent strong situations because the environment is probably heavily structured to guard against mistakes. A surgeon’s job, for example, has higher consequences than a foreign-language teacher’s. Some researchers have speculated that organizations are, by definition, strong situations because they impose rules, norms and standards that govern behaviour. These constraints are usually appropriate. For example, we would not want an employee to feel free to engage in sexual harassment, to follow questionable accounting procedures, or to come to work only when the mood strikes. But that does not mean it is always desirable for organizations to create strong situations for their employees. First, jobs with myriad rules and tightly controlled processes can be dull or demotivating. Imagine that all work was executed with an assembly-line approach. Most of us prefer having some freedom to decide how to do our work. Second, people do differ, so what works well for one person might work poorly for another. Third, strong situations might suppress the creativity, initiative and discretion prized by some cultures. One recent study, for example, found that in weak organizational situations, employees were more likely to behave proactively in accordance with their values.57 Finally, work is increasingly complex and interrelated globally. Creating strong rules to govern complex, interrelated and culturally diverse systems might be not only difficult but unwise. Managers need to recognize the role of situation strength in the workplace and find the appropriate balance.

Trait activation theory trait activation theory (TAT) A theory that predicts that some situations, events or interventions ‘activate’ a trait more than others.

Another important theoretical framework towards understanding situational activators for personality is trait activation theory (TAT). TAT predicts that some situations, events or interventions ‘activate’ a trait more than others. For example, a commission-based compensation plan would likely activate individual differences in extroversion because extroversion is more reward-sensitive, than, say, openness. Conversely, in jobs that allow expression of individual creativity, individual differences in openness may better predict creative behaviour than individual differences in extroversion would. See Table 4.1 for specific examples. A recent study found that people learning online responded differently when their behaviour was being electronically monitored. Those who had high fear of failure had higher evaluation apprehension than others and learned significantly less. In this case, a feature of the environment (electronic monitoring) activated a trait (fear of failing), and the combination of the two meant lowered job performance.58 TAT can also work in a positive way. A recent study applying TAT found that individual differences in the tendency to behave pro-socially mattered more when co-workers were not supportive. In other words, in a supportive environment, everyone behaves pro-socially, but in an environment that is not so nice, whether an individual has the personality to behave pro-socially makes a major difference.59 Together, situation strength and trait activation theories show that the debate over nature versus nurture might best be framed as nature and nurture. Not only does each affect behaviour,

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Table 4.1  Trait activation theory: jobs in which certain Big Five traits are more relevant Detail orientation required

Social skills required

Competitive work

Innovation required

Dealing with angry people

Time pressure (deadlines)

Correctional officer Telemarketer Flight attendant

Broadcast news analyst Editor Airline pilot

Composer Biologist Statistician

Skincare specialist Mathematician Fitness trainer

Jobs scoring high (the traits listed here should predict behaviour in these jobs) Air traffic controller Accountant Legal secretary

Clergy Therapist Concierge

Coach/scout Financial manager Sales representative

Actor Systems analyst Advertising writer

Jobs scoring low (the traits listed here should not predict behaviour in these jobs) Forester Masseuse Model

Software engineer Pump operator Broadcast technician

Postal clerk Historian Nuclear reactor operator

Court reporter Archivist Medical technician

Jobs that score high activate these traits (make them more relevant to predicting behaviour) Conscientiousness (+)

Extroversion (+) Agreeableness (+)

Extroversion (+) Agreeableness (−)

Openness (+)

Extroversion (+) Agreeableness (+) Neuroticism (−)

Conscientiousness (+) Neuroticism (−)

Note: A plus (1) sign means individuals who score high on this trait should do better in this job. A minus (2) sign means individuals who score low on this trait should do better in this job.

but they interact with one another. Put another way, personality affects work behaviour and the situation affects work behaviour, but when the situation is right, the power of personality to predict behaviour is even higher. Having discussed personality traits – the enduring characteristics that describe a person’s behaviour – we now turn to values. Although personality and values are related, they’re not the same. Values are often very specific and describe belief systems rather than behavioural tendencies. Some beliefs or values don’t say much about a person’s personality, and we don’t always act in ways that are consistent with our values.

Values Is capital punishment right or wrong? If a person likes power, is that good or bad? The answers to these questions are value-laden.

An expat personality Determining which employees will succeed on overseas business assignments is often difficult for an organization’s managers because the same qualities that predict success in one culture may not in another. However, researchers are naming personality traits that can help managers zero in on which employees would be suited for foreign assignments. You might think that of the Big Five traits, openness to experience would be most important to effectiveness in international assignments. Open people are more likely to be culturally flexible – to ‘go with the flow’ when things are different in another country. Although research is not fully consistent on the issue, most does suggest that managers who score high on openness perform better than others in international assignments.

glOBal Among numerous other findings evident in expatriate research, extroversion, agreeableness and emotional stability have been demonstrated as being negatively related to the expatriates desire to terminate the assignment. Conscientiousness has been found to be positively related to performance ratings by supervisors. What does the research mean for organizations? When it comes to choosing employees for global assignments, personality can make a difference. Source: Based on M. A. Shaffer, D. A. Harrison and H. Gregersen, ‘You can take it with you: individual differences and expatriate effectiveness’, Journal of Applied Psychology, January 2006, pp. 109–25; E. Silverman, ‘The global test’, Human Resource Executive Online, 16 June 2006, www.hreonline.com/HRE/story.jsp?sto ryId=5669803; and P. M. Caligiuri, ‘The Big Five personality characteristics as predictors of expatriate’s desire to terminate the assignment and ­supervisor-rated performance’, Personnel Psychology, 53 (2000), pp. 67–88.

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7 Define values, demonstrate the importance of values and contrast terminal and instrumental values. values Basic convictions that a specific mode of conduct or end-state of existence is personally or socially preferable to an opposite or converse mode of conduct or end-state of existence. value system A hierarchy based on a ranking of an individual’s values in terms of their intensity.

Values represent basic convictions that ‘a specific mode of conduct or end-state of existence is personally or socially preferable to an opposite or converse mode of conduct or end-state of existence.’60 They contain a judgemental element in that they carry an individual’s ideas as to what is right, good or desirable. Values have both content and intensity attributes. The content attribute says that a mode of conduct or an end-state of existence is important. The intensity attribute specifies how important it is. When we rank an individual’s values in terms of their intensity, we obtain that person’s value system. All of us have a hierarchy of values that forms our value system. This system is identified by the relative importance we assign to values such as freedom, pleasure, self-respect, honesty, obedience and equality. Are values fluid and flexible? Generally speaking, no. They tend to be relatively stable and enduring.61 A significant portion of the values we hold are established in our early years – from parents, teachers, friends and others. As children, we are told that certain behaviours or outcomes are always desirable or always undesirable, with few grey areas. You were told, for example, that you should be honest and responsible. You were probably never taught to be just a little bit honest or a little bit responsible. It is this absolute, or ‘black-or-white’, learning of values that more or less ensures their stability and endurance. The process of questioning our values, of course, may result in a change. More often, our questioning merely acts to reinforce the values we hold.

The importance of values Values are important to the study of organizational behaviour because they lay the foundation for our understanding of people’s attitudes and motivation and because they influence our perceptions. Individuals enter an organization with preconceived notions of what ‘ought’ and ‘ought not’ to be. Of course, these notions are not value-free. On the contrary, they contain interpretations of right and wrong. Furthermore, they imply that certain behaviours or outcomes are preferred over others. As a result, values cloud objectivity and rationality; they influence attitudes and behaviour.62 Suppose you enter an organization with the view that allocating pay on the basis of performance is right, while allocating pay on the basis of seniority is wrong. How are you going to react if you find that the organization you’ve just joined rewards seniority and not performance? You’re likely to be disappointed – and this can lead to job dissatisfaction and a decision not to exert a high level of effort because ‘it’s probably not going to lead to more money anyway’. Would your attitudes and behaviour be different if your values aligned with the organization’s pay policies? Most likely.

EMPLOYABILITY AND VALUES Want a happy and fulfilling career? Then maybe you should consider a job in the voluntary sector. A recent survey reveals interesting results about employees in the private, public and voluntary sectors: ●

Voluntary sector employees are the most satisfied (52 per cent), with job satisfaction scores in the private sector at 44 per cent and 39 per cent in the public sector.

●

Employees in the voluntary sector are the most engaged (55 per cent), compared with 38 per cent and 30 per cent in the private and public sectors respectively.

●

38 per cent of voluntary sector employees think it is likely that they will be able to fulfil their career aspiration in their current organization compared with 31 per cent of

private sector employees and 28 per cent of public sector employees. ●

Employees from the voluntary sector (54 per cent) are most likely to feel they receive the right coaching and training to achieve their career goals, followed by employees in the public sector (48 per cent) and those in the private sector (44 per cent).

Why does the voluntary sector perform so well comparatively? It is due in a large part to the fact that the voluntary organizations often have strong values that fit well with those of the individuals who seek employment there. Source: CIPD/Halogen, Employee Outlook, Autumn 2014.

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Classifying values terminal values Desirable end-states of existence; the goals a person would like to achieve during their lifetime. instrumental values Preferable modes of behaviour or means of achieving one’s terminal values.

Milton Rokeach created the Rokeach Value Survey (RVS).63 It consists of two sets of values, each containing 18 individual value items. One set, called terminal values, refers to desirable end-states. These are the goals a person would like to achieve during his or her lifetime. These include values such as a comfortable life, a sense of accomplishment, equality and wisdom. The other set, called instrumental values, refers to preferable modes of behaviour or means of achieving the terminal values. Some examples of these are intellectual, ambitious, courageous and responsible. Several studies confirm that RVS values vary among groups.64 People in the same occupations or categories (for example, corporate managers, union members, parents, students) tend to hold similar values. For instance, one study compared corporate executives, members of a steelworkers’ union, and members of a community activist group. Although there was a good deal of overlap among the three groups,65 there were also some very significant differences (see Table 4.2). The activists had value preferences that were quite different from those of the other two groups. They ranked ‘equality’ as their most important terminal value; executives and union members ranked this value 12 and 13, respectively. Activists ranked ‘helpful’ as their second-highest instrumental value. The other two groups both ranked it 14. These differences are important, because executives, union members and activists all have a vested interest in what corporations do. These differences make things difficult for groups that have to negotiate with each other and can create serious conflicts when they contend with each other over an organization’s economic and social policies.66 Begun in 1981, and still going, the European Values Study (EVS) is a large-scale research programme designed to better understand the values of European people. Insights were gained into how people value, for example, friendship, human rights, hard work, tolerance and honesty. An interesting result was the difference across Europe regarding work ethos (or work ethic) (see Figure 4.2). This represents the degree to which individuals place work at or near the centre of their lives. Persons with a strong work ethic regard hard work as intrinsically good and as almost a moral duty. In contrast, they regard leisure somewhat suspiciously because of its potential to harm both persons and society as a whole.67 These results have implications for such topics as job satisfaction, commitment, motivation, work/life balance and cross-cultural management. Data from the EVS has now been incorporated into the World Values Survey to assess global values and how they change over time.

Contemporary work values Contemporary work cohorts As we will see, people’s values differ depending on, for example, generation and culture, so it is difficult to give a blanket list of common contemporary work values. However, it is useful to review some recent national research to shed some light on what values are important for today’s workers and how they vary between demographic groups. A UK study revealed cooperation was the most highly rated value overall. The research then looked at differences between Table 4.2  Mean value ranking of executives, union members and activists (top five only) Executives

Union Members

Activists

Terminal

Instrumental

Terminal

Instrumental

Terminal

Instrumental

1. Self-respect

1. Honest

1. Family security

1. Responsible

1. Equality

1. Honest

2. Family security

2. Responsible

2. Freedom

2. Honest

2. A world of peace 2. Helpful

3. Freedom

3. Capable

3. Happiness

3. Courageous

3. Family security

3. Courageous

4. A sense of accomplishment

4. Ambitious

4. Self-respect

4. Independent

4. Self-respect

4. Responsible

5. Happiness

5. Independent

5. Mature love

5. Capable

5. Freedom

5. Capable

Source: Adapted from W. C. Frederick and J. Weber, ‘The values of corporate managers and their critics: an empirical description and normative implications’, in W. C. Frederick and L. E. Preston (eds), Business Ethics: Research Issues and Empirical Studies (Greenwich, CT: JAI Press, 1990), pp. 123–44.

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0.00 –1.00 – –0.76 0.25 –0.75 – –0.49 0.50 –0.50 – –0.24 0.75 –0.25 – –0.01 Scale –1 (Low ethos) to 1 (High ethos)

– – – –

0.24 0.49 0.74 1.00

is

fi

se

ru

no es lv dk

nir ie

lt by

gb pl

nl be

lu

de

ua cz

sk

at

fr

md

hu

sl hr

it

ba

ser

al

es

az am

mon pt

ge

ca

bg mk

te

gr

mt

Figure 4.2  European work ethos

Source: Atlas of European Values, Brill (Halman, L. ed. 2005) p.55.

8  Identify the dominant values in today’s workforce.

gender, age, education and occupation. Men saw prosperity as relatively more important, while women prioritized working relationships. In terms of age, progression and personal growth declined in importance with age while younger workers were the most change-oriented and career-driven. Graduates place relatively more importance on work values linked to challenge and advancement such as career progression, job satisfaction, personal growth and autonomy. In contrast, non-graduate employees place importance on more tangible, immediate factors such as salary and rewards, line manager relationships, loyalty and trust. Strong leadership and clear communication are of most importance to managerial, professional and sales groups, with sales groups also prioritizing loyalty and trust more than other occupational groups.68 Studies in other contexts have revealed that male Norwegian business school students are more oriented towards prosperity than females. A comparison of Polish and German secondary school students also revealed gender differences. The males were more inclined to look for work that was demanding in terms of time and personal commitment and that involved some degree of risk-taking. However, it does seem that gender differences in terms of values are decreasing.69 Perhaps the most research into the differences in generational values has been conducted in the United States. These findings suggest that older workers (65+) are hardworking, conservative and conforming. The dominant values of those aged mid-40 to mid-60 include achievement, ambition and dislike of authority. Late-20s to early-40s value work–life balance, relationship, dislike of rules. Whereas under-30s value financial success, confidence and loyalty to self and to relationships. While it must be recognized that there will be significant variations within groups, it is useful to recognize that groups tend to reflect similar values and this can be a valuable aid in explaining and predicting behaviour.70

100  4 Personality and values

Linking an individual’s personality and values to the workplace Thirty years ago, organizations were concerned only with personality because their primary focus was to match individuals to specific jobs. That concern still exists. But, in recent years, that interest has expanded to include how well the individual’s personality and values match the organization. Why? Because managers today are less interested in an applicant’s ability to perform a specific job than with the flexibility to meet changing situations and commitment to the organization. We’ll now discuss person–job fit and person–organization fit in more detail.

Person–job fit personality–job fit theory A theory that identifies six personality types and proposes that the fit between personality type and occupational environment determines satisfaction and turnover.

The effort to match job requirements with personality characteristics is best articulated in John Holland’s personality–job fit theory.71 Holland presents six personality types and proposes that satisfaction and the propensity to leave a position depend on the degree to which individuals successfully match their personalities to a job. Each one of the six personality types has a congruent occupation. Table 4.3 describes the six types and their personality characteristics and gives examples of congruent occupations. Holland developed the Vocational Preference Inventory questionnaire, which contains 160 occupational titles. Respondents indicate which of these occupations they like or dislike and their answers form personality profiles. Research strongly supports the resulting hexagonal diagram shown in Figure 4.3.72 The closer two fields or orientations are in the hexagon, the more compatible they are. Adjacent categories are quite similar, whereas diagonally opposite ones are highly dissimilar. What does all this mean? The theory argues that satisfaction is highest and turnover is lowest when personality and occupation are in agreement. Social individuals should be in social jobs, conventional people in conventional jobs, and so forth. A realistic person in a realistic job is in a more congruent situation than a realistic person in an investigative job. A realistic person in a social job is in the most incongruent situation possible. The key points of this model are that (1) there do appear to be intrinsic differences in personality among individuals, (2) there are different types of jobs, and (3) people in jobs congruent with their personality should be more satisfied and less likely to voluntarily resign than people in incongruent jobs.

Person–organization fit We’ve noted that researchers in recent years have looked at matching people to organiz­ ations as well as to jobs. If an organization faces a dynamic and changing environment Table 4.3  Holland’s typology of personality and congruent occupations Type

Personality characteristics

Congruent occupations

Realistic: Prefers physical activities that require skill, strength and coordination

Shy, genuine, persistent, stable, conforming, practical

Mechanic, drill press operator, assembly-line worker, farmer

Investigative: Prefers activities that involve thinking, organizing and understanding

Analytical, original, curious, independent Biologist, economist, mathematician, news reporter

Social: Prefers activities that involve helping and developing others

Sociable, friendly, cooperative, understanding

Social worker, teacher, counsellor, clinical psychologist

Conventional: Prefers rule-regulated, orderly and unambiguous activities

Conforming, efficient, practical, unimaginative, inflexible

Accountant, corporate manager, bank teller, file clerk

Enterprising: Prefers verbal activities in which there are opportunities to influence others and attain power

Self-confident, ambitious, energetic, domineering

Lawyer, real estate agent, public relations specialist, small business manager

Artistic: Prefers ambiguous activities that allow creative expression

Imaginative, disorderly, idealistic, emotional, impractical

Painter, musician, writer, interior unsystematic decorator

Global implications   101

and requires employees who are able to readily change tasks and move easily between teams, it’s more important that employees’ personalities fit with the overall organization’s culture than with the characteristics of any specific job. The person–organization fit essentially argues that people are attracted to and selected by organizations that match their values, and they leave organizations that are not compatible with their personalities.73 Using the Big Five terminology, for instance, we could expect that people high on extroversion fit well with aggressive and team-oriented cultures, that people high on agreeableness En match up better with a supportive organizational climate than one ter l pri cia that focuses on aggressiveness, and that people high on openness to So ) (E) sing (S experience fit better into organizations that emphasize innovation Figure 4.3  Relationships among rather than standardization.74 Following these guidelines at the time occupational personality types of hiring should lead to selecting new employees who fit better with Source: Reproduced by special permission of the the organization’s culture, which should, in turn, result in higher Publisher, Psychological Assessment Resources, Inc., from Making Vocational Choices, 3rd edn, copyright employee satisfaction and reduced turnover. Research on person–­ 1973, 1985, 1992, 1997 by Psychological Assessment organization fit has also looked at people’s values and whether they Resources, Inc. All rights reserved. match the organization’s culture. The fit of employees’ values with the culture of their organization predicts job satisfaction, commitment to the organiz­ ation and low turnover.75 Inv est iga (I) tive

Artistic (A)

Conventional (C)

stic ali Re (R)

Global implications Personality 9  Identify Hofstede’s five value dimensions of national culture.

Do personality frameworks transfer across cultures? Let’s look at the Big Five model to try help answer this question. The five personality factors identified in the Big Five model appear in almost all cross-­ cultural studies.76 These studies have included a wide variety of diverse cultures – such as China, Israel, Germany, Japan, Spain, Nigeria, Norway, Pakistan and the United States. Differences are complex but tend to be primarily about whether countries are predominantly individualistic or collectivistic. Chinese managers use the category of conscientiousness more often and agreeableness less often than do US managers. And the Big Five appear to predict a bit better in individualistic than in collectivist cultures.77 But there is a surprisingly high amount of agreement, especially across individuals from developed countries. A comprehensive review of studies covering people from what was then the 15-nation European Community found conscientiousness a valid predictor of performance across jobs and occupational groups.78

Values Because values differ across cultures, an understanding of these differences should be helpful in explaining and predicting behaviour of employees from different countries. power distance A national culture attribute that describes the extent to which a society accepts that power in institutions and organizations is distributed unequally.

Hofstede’s framework for assessing cultures One of the most widely referenced approaches for analysing variations among cultures was done in the late 1970s by the Dutch writer Geert Hofstede.79 He surveyed more than 116,000 IBM employees in 40 countries about their work-related values and found that managers and employees vary on five value dimensions of national culture: ●

Power distance. Power distance describes the degree to which people in a country accept that power in institutions and organizations is distributed unequally. A high rating on power

102  4 Personality and values individualism A national culture attribute that describes the degree to which people prefer to act as individuals rather than as members of groups. collectivism A national culture attribute that describes a tight social framework in which people expect others in groups of which they are a part to look after them and protect them. masculinity A national culture attribute that describes the extent to which the culture favours traditional masculine work roles of achievement, power and control. Societal values are characterized by assertiveness and materialism. femininity A national culture attribute that has little differentiation between male and female roles, where women are treated as the equals of men in all aspects of the society. uncertainty avoidance A national culture attribute that describes the extent to which a society feels threatened by uncertain and ambiguous situations and tries to avoid them. long-term orientation A national culture attribute that emphasizes the future, thrift and persistence. short-term orientation A national culture attribute that emphasizes the past and present, respect for tradition and fulfilment of social obligations.

distance means that large inequalities of power and wealth exist and are tolerated in the culture, as in a class or caste system that discourages upward mobility of its citizens. A low power distance rating characterizes societies that stress equality and opportunity. ●

●

●

●

Individualism versus collectivism. Individualism is the degree to which people prefer to act as individuals rather than as members of groups and believe in individual rights above all else. Collectivism emphasizes a tight social framework in which people expect others in groups of which they are a part to look after them and protect them. Masculinity versus femininity. Hofstede’s construct of masculinity is the degree to which the culture favours traditional masculine roles such as achievement, power and control, as opposed to viewing men and women as equals. A high masculinity rating indicates the culture has separate roles for men and women, with men dominating the society. A high femininity rating means the culture sees little differentiation between male and female roles and treats women as the equals of men in all respects. Uncertainty avoidance. The degree to which people in a country prefer structured over unstructured situations defines their uncertainty avoidance. In cultures that score high on uncertainty avoidance, people have an increased level of anxiety about uncertainty and ambiguity and use laws and controls to reduce uncertainty. Cultures low on uncertainty avoidance are more accepting of ambiguity and are less rule oriented, take more risks and more readily accept change. Long-term versus short-term orientation. This is the newest addition to Hofstede’s typology. It focuses on the degree of a society’s long-term devotion to traditional values. People in a culture with long-term orientation look to the future and value thrift, persistence and tradition. In a short-term orientation, people value the here and now; they accept change more readily and don’t see commitments as impediments to change.

How do different countries score on Hofstede’s dimensions? Table 4.4 shows the ratings for the countries for which data are available. For example, power distance is higher in Malaysia than in any other country. Great Britain is very individualistic. Great Britain also tends to be short term in orientation and is low in power distance (people in Great Britain tend not to accept built-in class differences between people). Sweden, Denmark and Ireland are relatively low on uncertainty avoidance, meaning that most adults are relatively tolerant of uncertainty and ambiguity. Germany scores relatively high on masculinity, meaning that most people emphasize traditional gender roles (at least relative to countries such as Denmark, Finland, Norway and Sweden). You’ll notice regional differences. Western and Northern nations such as Canada and the Netherlands tend to be more individualistic. Compared to other countries, poorer countries such as Mexico and the Philippines tend to be higher on power distance. South American nations tend to be higher than other countries on uncertainty avoidance and Asian countries tend to have a long-term orientation. Hofstede’s culture dimensions have been enormously influential on OB researchers and managers. Nevertheless, his research has been criticized. First, although the data have since been updated, the original work is more than 30 years old and was based on a single company (IBM). A lot has happened on the world scene since then. Some of the most obvious changes include the fall of the Soviet Union, the transformation of central and eastern Europe, the end of apartheid in South Africa, and the rise of China as a global power. Second, few researchers have read the details of Hofstede’s methodology closely and are therefore unaware of the many decisions and judgement calls he had to make (for example, reducing the number of cultural values to just five). Despite these concerns, Hofstede has been one of the most widely cited social scientists ever, and his framework has left a lasting mark on OB. Recent research across 598 studies with more than 200,000 respondents has investigated the relationship of Hofstede’s cultural values and a variety of organizational criteria at both the individual and national level of analysis.80 Overall, the five original culture dimensions were equally strong predictors of relevant outcomes, meaning researchers and practising managers need to think about culture holistically and not just focus on one or two d ­ imensions.

Table 4.4  Hofstede’s cultural values by nation Power distance Rank

Individualism versus collectivism

Country

Index

Argentina

49

35–36

Index 46

Australia

36

41

Austria

11

53

Belgium

65

20

Rank

Masculinity versus femininity

Uncertainty avoidance Rank

Long- versus short-term orientation

Index

Rank

Index

22–23

56

20–21

86

Index

Rank

90

2

61

16

51

37

31

22–24

55

18

79

2

70

24–25

31

22–24

75

8

54

22

94

5–6

38

18

10–15

Brazil

69

14

38

26–27

49

27

76

21–22

65

6

Canada

39

39

80

4–5

52

24

48

41–42

23

30

Chile

63

24–25

23

38

28

46

86

10–15

Colombia

67

17

13

49

64

11–12

80

20 46

10

41

14

Costa Rica

35

42–44

15

46

21

48–49

86

10–15

Denmark

18

51

74

9

16

50

23

51

Ecuador

78

8–9

8

52

63

13–14

67

28

El Salvador

66

18–19

19

42

40

40

94

5–6

Finland

33

46

63

17

26

47

59

31–32

France

68

15–16

71

10–11

43

35–36

86

10–15

39

17

Germany

35

42–44

67

15

66

9–10

65

29

31

22–24

Great Britain

35

42–44

89

3

66

9–10

35

47–48

25

28–29

Greece

60

27–28

35

30

57

18–19

112

1

95

2–3

6

53

37

43

101

3

68

15–16

25

37

57

18–19

29

49–50

96

2

India

77

10–11

48

21

56

20–21

40

45

61

61

43

13

34

19

Indonesia

78

8–9

14

47–48

46

30–31

48

41–42

Iran

58

29–30

41

24

43

35–36

59

31–32

Ireland

28

49

70

12

68

7–8

35

47–48

Israel

13

52

54

19

47

29

81

19

Italy

50

34

76

7

70

4–5

75

23

Jamaica

45

37

39

25

68

7–8

13

52

Japan

54

33

46

22–23

95

1

92

7

80

4

Korea (South)

60

27–28

18

43

39

41

85

16–17

75

5 (continued)

Global implications   103

Guatemala Hong Kong

Individualism versus collectivism

Power distance Country

Index

Rank

Index

Rank

Masculinity versus femininity Index

Rank

Uncertainty avoidance Index

Rank

Long- versus short-term orientation Index

Rank

Malaysia

104

1

26

36

50

25–26

36

46

Mexico

81

5–6

30

32

69

6

82

18

The Netherlands

38

40

80

4–5

14

51

53

35

44

11–12

New Zealand

22

50

79

6

58

17

49

39–40

30

25–26

Norway

31

47–48

69

13

8

52

50

38

44

11–12

Pakistan

55

32

14

47–48

50

25–26

70

24–25

0

34

Panama

95

2–3

11

51

44

34

86

10–15

Peru

64

21–23

16

45

42

37–38

87

9

Philippines

94

4

32

31

64

11–12

44

44

19

31–32

Portugal

63

24–25

27

33–35

31

45

104

2

30

25–26

Singapore

74

13

20

39–41

48

28

8

53

48

9

South Africa

49

35–36

65

16

63

13–14

49

39–40

Spain

57

31

51

20

42

37–38

86

10–15

19

31–32

Sweden

31

47–48

71

10–11

5

53

29

49–50

33

20

Switzerland

34

45

68

14

70

4–5

58

33

40

15–16

Taiwan

58

29–30

17

44

45

32–33

69

26

87

3

56

8

29

27

Thailand

64

21–23

20

39–41

34

44

64

30

Turkey

66

18–19

37

28

45

32–33

85

16–17

United States

40

38

91

1

62

15

46

43

Uruguay

61

61

36

29

38

42

100

4

Venezuela

81

5–6

12

50

73

3

76

21–22

Yugoslavia

76

12

27

33–35

21

48–49

88

8

Regions: Arab countries

80

7

38

26–27

53

53

68

68

East Africa

64

21–23

27

33–35

41

39

52

36

25

28–29

West Africa

77

10–11

20

39–41

46

30–31

54

34

16

33

Scores range from 0 = extremely low on dimension to 100 = extremely high. Note: 1 = highest rank. LTO ranks: 1 = China; 15–16 = Bangladesh; 21 = Poland; 34 = lowest. Source: from Geert Hofstede, Culture’s Consequences: Comparing Values, Behaviors, Institutions and Organizations Across Nations, 2nd edn (Thousand Oaks, California: Sage Publications, 2001). Copyright © Geert Hofstede BV, reproduced with permission.

104  4 Personality and values

Table 4.4  continued

implications for managers   105

The researchers also found that measuring individual scores resulted in much better predictions of most outcomes than assigning all people in a country the same cultural values. In sum, this research suggests that Hofstede’s value framework may be a valuable way of thinking about differences among people, but we should be cautious about assuming all people from a country have the same values.

The GLOBE framework for assessing cultures Begun in 1993, the Global Leadership and Organizational Behaviour Effectiveness (GLOBE) research programme is an ongoing cross-cultural investigation of leadership and national culture. Using data from 825 organizations in 62 countries, the GLOBE team identified nine dimensions on which national cultures differ.81 Some of these – such as power distance, individualism/collectivism, uncertainty avoidance, gender differentiation (similar to masculinity versus femininity), and future orientation (similar to long-term versus short-term ­orientation) – resemble the Hofstede dimensions. The main difference in the GLOBE framework is that it added dimensions, such as humane orientation (the degree to which a society rewards individuals for being altruistic, generous and kind to others) and performance orientation (the degree to which a society encourages and rewards group members for performance improvement and excellence). Which framework is better? That’s hard to say, and each has its adherents. We give more emphasis to Hofstede’s dimensions here because they have stood the test of time and the GLOBE study confirmed them. For example, a review of the organizational commitment literature shows that both the Hofstede and GLOBE individualism/collectivism dimensions operated similarly. Specifically, both frameworks showed that organizational commitment tends to be lower in individualistic countries.82 This study shows that too often, we make false choices – both frameworks have a great deal in common, and each has something to offer.

SUMMARY Personality matters to organizational behaviour. It does not explain all behaviour, but it sets the stage. Emerging theory and research reveal how personality matters more in some situations than others. The Big Five has been a particularly important advancement, though other traits matter as well. Moreover, every trait has advantages and disadvantages for work behaviour. There is no perfect constellation of traits that is ideal in every situation. Personality can help you to understand why people (including yourself!) act, think and feel the way we do, and the astute manager can put that understanding to use by taking care to place employees in situations that best fit their personality. Why is it important to know an individual’s values? Values often underlie and explain attitudes, behaviours and perceptions. So knowledge of an individual’s value system can provide insight into what makes the person ‘tick’.

IMPLICATIONS FOR MANAGERS ●

●

●

As a manager, you are more likely to appreciate, evaluate positively and allocate rewards to employees who fit in, and your employees are more likely to be satisfied if they perceive they do fit in. Plan to objectively consider your employees’ performance accordingly. Consider screening job candidates for high conscientiousness – as well as the other Big Five traits, depending on the criteria your organization finds most important. Other traits, such as core self-evaluation or narcissism, may be relevant in certain situations. You need to evaluate your employees’ jobs, their work groups and your organization to determine the optimal personality fit.

106  4 Personality and values ●

●

Take into account employees’ situational factors when evaluating their observable personality traits, and lower the situation strength to better ascertain personality characteristics. Although the MBTI has been widely criticized, it may have a place in organizations. You may consider the results helpful for training and development; the results can also help employees better understand themselves, help team members better understand each other, open up communication in work groups and possibly reduce conflicts.

Traits are powerful predictors of behaviour

POINT/COUNTERPOINT

POINT The essence of trait approaches in OB is that employees possess stable personality characteristics that significantly influence their attitudes towards, and behavioural reactions to, organizational settings. People with particular traits tend to be relatively consistent in their attitudes and behaviour over time and across situations. Of course, trait theorists recognize that all traits are not equally powerful. They tend to put them into one of three categories. Cardinal traits are those so strong and generalized that they influence every act a person performs. Primary traits are generally consistent influences on behaviour, but they may not show up in all situations. Finally, secondary traits are attributes that do not form a vital part of the personality but come into play only in particular situations. For the most part, trait theories have focused on the power of primary traits to predict employee behaviour. Trait theorists do a fairly good job of meeting the average person’s face-validity test. Think of friends, relatives and

acquaintances you have known for a number of years. Do they have traits that have remained essentially stable over time? Most of us would answer that question in the affirmative. If Cousin Ann was shy and nervous when we last saw her 10 years ago, we would be surprised to find her outgoing and relaxed now. Managers seem to have a strong belief in the power of traits to predict behaviour. If managers believed that situations determined behaviour, they would hire people almost at random and structure the situation properly. But the employee selection process in most organizations places a great deal of emphasis on how applicants perform in interviews and on tests. Assume that you’re an interviewer and ask yourself, ‘What am I looking for in job candidates?’ If you answered with terms such as conscientious, hardworking, persistent, confident and dependable, you’re a trait theorist.

COUNTERPOINT Few people would dispute that some stable individual attributes affect reactions to the workplace. But trait theorists go beyond that and argue that individual behaviour consistencies are widespread and account for much of the differences in behaviour among people. Two problems with using traits to explain a large proportion of behaviour in organizations are that the evidence isn’t all that impressive, and individuals are highly adaptive so that personality traits change in response to organizational ­situations. First, though personality does influence workplace attitudes and behaviours, the effects aren’t all that strong; traits explain a minority of the variance in attitudes and behaviour. Why is this so? The effects of traits are likely to be strongest in relatively weak situations and weakest in relatively strong situations. Organizational settings tend to be strong situations because they have rules and other formal regulations that define acceptable behaviour and punish deviant behaviour; and they have informal norms that dictate appropriate behaviours. These formal and informal constraints minimize the effects of personality traits.

By arguing that employees possess stable traits that lead to cross-situational consistencies in behaviours, trait theorists imply that individuals don’t really adapt to different situations. But a growing body of evidence suggests that an individual’s traits are changed by the organizations the individual participates in. If the individual’s personality changes as a result of exposure to organizational settings, in what sense can that individual be said to have traits that persistently and consistently affect their reactions to those very settings? Moreover, people typically belong to multiple organizations that often include very different kinds of members. And they adapt to those different situations, too. Instead of being prisoners of a rigid and stable personality framework, as trait theorists propose, people regularly adjust their behaviour to reflect the requirements of various situations. Sources: R. Hogan, ‘In defense of personality measurement: new wine for old whiners’, Human Performance, 18, 4 (2005), pp. 331–41; and N. Schmitt, ‘Beyond the Big Five: increases in understanding and practical utility’, Human Performance, 17, 3 (2004), pp. 347–57.

ETHical dilemma   107

QUESTIONS FOR REVIEW 1. What is personality? How do we typically measure it?

6. How does the situation or environment affect the

degree to which personality predicts behaviour?

What factors determine personality? 2. What is the Myers-Briggs Type Indicator (MBTI), and

7. What are values, why are they important, and what is the

difference between terminal and instrumental values?

what does it measure? 3. What are the Big Five personality traits?

8. Do values differ across cultures? How so?

4. How do the Big Five traits predict work behaviour? 5. Besides the Big Five, what other personality traits are

relevant to OB?

EXPERIENTIAL EXERCISE WHAT ORGANIZATIONAL CULTURE DO YOU PREFER? preferred values are similar to those of other class or group members? b. Do you think there are generational differences in the most preferred and least preferred values? c. Research has shown that individuals tend to be happier, and perform better, when their OCP values match those of their employer. How important do you think a ‘values match’ is when you’re deciding where you want to work?

The Organizational Culture Profile (OCP) can help assess whether an individual’s values match the organization’s.83 The OCP helps individuals sort their characteristics in terms of importance, which indicates what a person values. 1. Working on your own, complete the OCP that your

instructor will provide you with. 2. Your instructor may ask you the following questions individ-

ually or as a group of three or four students (with a spokesperson appointed to speak to the class for each group): a. What were your most preferred and least preferred values? Do you think your most preferred and least

ETHICAL DILEMMA DO YOU HAVE A CHEATING PERSONALITY? Stories of widespread cheating have been on the rise, leading many experts to conclude that the incidence of cheating is increasing. Recently a major cheating scandal was uncovered at Harvard University, where more than 125 students (roughly half of whom were eventually expelled) were found to be involved in an organized cheating scheme. Harvard administrators took the scandal seriously – maybe too seriously. In 2013, the Boston Globe reported that administrators had secretly downloaded university emails in an effort to get to the bottom of the scandal, including the email accounts of 16 deans. Like most complex behaviours, cheating in school, at work and in life is a product of the person and the situation. As for the person, research reveals that certain traits are related to the tendency to cheat, including high levels of narcissism, low levels of conscientiousness and agree­ ableness and high levels of competitiveness. As for the situation, experts find cheating increases when it is easier to cheat (such as on take-home exams), when there is greater pressure to cheat, and when clear standards are lacking or are not reinforced. Surveys

reveal, for example, that most employees have never read their organization’s policies on ethical conduct.

Questions 1. By examining the relationship between personality and

behaviour discussed in this chapter, how strong an influence do you believe personality is on whether a student decides to cheat or not? 2. If you score high on certain traits that predispose you to

cheat, does that mean you are destined to cheat? 3. How can the research in this article be used to help inform

students and employees on how to avoid cheating? Sources: H. E. Hershfield, T. R. Cohen and L. Thompson, ‘Short horizons and tempting situations: lack of continuity to our future selves leads to unethical decision making and behavior’, Organizational Behavior and Human Decision Processes, 117 (2012), pp. 298–310; M. Carmichael, ‘Secret e-mail searches on Harvard cheating scandal broader than initially described’, Boston Globe, 2 April 2013, www.boston.com/ metrodesk/2013/04/02/secret-mail-searches-harvard-cheatingscandal-broaderthan-initially-described/Mgz0mc8hSk3IgWGjxLwsJP/story.html; P. E. Mudrack, J. M. Bloodgood and W. H. Turnley, ‘Some ethical implications of individual competitiveness’, Journal of Business Ethics, 108 (2012), pp. 347–59; and R. Pérez-Peña, ‘Studies find more students cheating, with high achievers no exception’, New York Times, 8 September 2012, p. A13.

108  4 Personality and values

Style and substance had German and French leaders at odds When former French President Jacques Chirac would come calling on Chancellor Angela Merkel, she seemed charmed by his gallant style, old world sensibility and those light kisses on the hand that got so much media play. But his successor, Nicolas Sarkozy, had a habit of familiarly kissing and hugging the German leader at their meetings that left her cold, even annoyed, according to reports, and this did not help strengthen a relationship that was seen as pivotal within the European Union. Were it just a matter of where to place a kiss, the issue might be solved with the intervention of a protocol officer. But the differences between the two leaders are ones of both style and substance, which make them more difficult to bridge. When Sarkozy was president from 2007 until 2012, it was thought he and Merkel would be the perfect couple. Both came from parties on the right of the political spectrum, both had an interest in economic reform and getting an EU reform treaty back on track. They were even born just six months apart. But, on closer examination, the fact that they did not hit it off personally might not be surprising. Their styles could not be more different. Angela Merkel, a pastor’s daughter who grew up in East Germany, is cautious and reserved. She has a down-to-earth style that dispenses with all flash. But she has succeeded in finding a way to communicate her positions – even to foreign leaders on controversial topics like human rights in China or Russian democracy – in a low-key but effective manner. She is the quintessential team player. Nicolas Sarkozy is a near opposite of that. Brash and in constant movement, he has been called hyperactive by many. Comparisons to Bonaparte have been frequent,

Bankers back in the classroom The opening vignette touched upon traditional banking staff undergoing training to better understand positive values with the ultimate aim of improving behaviour. This case takes a closer look at the issue. Ask people outside financial services what bankers have been doing for the past few years and you will probably receive an unprintable response. Ask bankers themselves and they may reply: training. In the wake of the financial crisis and a series of scandals and reputational blows, for instance, all 98,000 employees of Deutsche Bank, about 13,000 senior bankers at Goldman Sachs and Barclays’ 140,000 staff have been or are being taken through programmes aimed at reinforcing codes, values, behaviour and a strong, positive corporate culture.

CASE INCIDENT 1

given his dismissive behaviour towards his cabinet and his apparent love for showmanship and the spotlight. He had frequent spats with EU leaders and his sometimes contrarian views were a combination of his wanting to score political points at home, but at a more fundamental level, reflections of his own personality. Having returned to politics in 2014, Sarkozy and Merkel may well find themselves being reacquainted.

Questions 1. How do you believe Merkel and Sarkozy would score on the Big Five dimensions of personality (extroversion, agreeableness, conscientiousness, emotional stability, openness to experience)? Which ones would they score high on? Which ones might they score low on?

2. What other personality traits do you believe Merkel and Sarkozy exhibit? On what information did you base your decision?

3. Do you think it is possible for the two leaders to work together effectively? How? Source: Adapted from K. James ‘Style and substance have German, French leaders at odds’, European Ties, 18 September 2007, http://www.dw-world.de/ dw/article/0,2144,2786049,00.html.

CASE INCIDENT 2 At Barclays, at the end of a half-day workshop in groups of 20 or 30, staff are asked to commit to one thing they would change to reflect the bank’s values of ‘respect, integrity’ to their team leader and their career and pay opportunities are affected. At Goldman, senior bankers, starting with the chairman, have spent hours debating a fictional case study about ‘Diversified Financial’, an important institution on the brink of collapse. Given the recent record of the banks, such programmes invite scepticism. Even assuming the companies can cement good behaviour, it is hard to guarantee their managers will successfully monitor, measure and maintain adherence to the values, particularly when competitive pressure mounts as markets revive.

EndNotes   109

The fact such retraining is necessary is in itself an indictment of the banks’ past performance in this area. Goldman, for instance, has had a set of business principles since 1979, and boasted of a famously strong corporate culture. Yet it still fell into a foul-smelling tangle in 2007 over the so-called Abacus deal, after which it was accused of knowingly marketing doomed mortgage products to clients. The ensuing political and public relations disaster sent Goldman back to review its standards and practices, as part of a three-year effort that includes the case study training. Judging from a recent session for 100 vice-presidents in London, one of the lessons is that even applying the first business principle – ‘Our clients’ interests always come first’ – is difficult when, as in the

original Abacus deal, Goldman has many clients with conflicting interests. Philippa Foster Back, director of the UK-based Institute of Business Ethics since 2001, says the current commitment to improved behaviour – not just in financial services but across business – looks more robust than flimsier efforts in the early 2000s, when companies often issued a code of conduct and left it at that. The newer programmes begin at board level; they involve intensive training and continued engagement; and they are global. So when the next Diversified Financial looms into view, the question will not be whether bankers completed their training – they all will have – but whether they absorbed enough of the lessons to avoid the pitfalls many fell into last time.

Source: Adapted from A. Hill, ‘Bankers back in the classroom’, Financial Times, 16 October 2013. © The Financial Times Limited. All Rights Reserved. Pearson Education Ltd. is responsible for providing this adaptation of the original article.

Questions 1. List the values that the banks want their staff to demonstrate. 2. What methods are the banks using to train their staff in understanding these values and how do they apply in ­practice?

3. Is it possible that individual’s values that contradict those of

4. Do you think that personality traits may have also played a part in unethical behaviour at the banks? Is so, which traits?

5. As well as training, what else could the banks do to help improve ethical decision making?

the bank will be changed by using these methods?

ENDNOTES   1 G. W. Allport, Personality: A Psychological Interpretation (New York: Holt, Rinehart & Winston, 1937), p. 48. For a brief critique of current views on the meaning of personality, see R. T. Hogan and B. W. Roberts, ‘Introduction: personality and industrial and organizational psychology’, in B. W. Roberts and R. Hogan (eds), Personality Psychology in the Workplace (Washington, DC: American Psychological Association, 2001), pp. 11–12.   2 K. I. van der Zee, J. N. Zaal and J. Piekstra, ‘Validation of the multicultural personality questionnaire in the context of personnel selection’, European Journal of Personality, 17, S1 (2003), pp. S77–S100.   3 S. A. Birkeland, T. M. Manson, J. L. Kisamore, M. T. Brannick and M. A. Smith, ‘A meta-analytic investigation of job applicant faking on personality measures’, International Journal of Selection and Assessment, 14, 14 (2006), pp. 317–35.   4 T. A. Judge, C. A. Higgins, C. J. Thoresen and M. R. Barrick, ‘The Big Five personality traits, general mental ability, and career success across the life span’, Personnel Psychology, 52, 3 (1999), pp. 621–52; I. Oh, G. Wang and M. K. Mount, ‘Validity of observer ratings of the Five-Factor model of personality traits: a meta-analysis’, Journal of Applied Psychology, 96, 4 (2011), pp. 762–73.  5 See R. D. Arvey and T. J. Bouchard, Jr, ‘Genetics, twins, and organizational behavior’, in B. M. Staw and L. L. Cummings (eds), Research in Organizational Behavior, vol. 16 (Greenwich, CT: JAI Press, 1994), pp. 65–6; W. Wright, Born That Way: Genes, Behavior, Personality (New York: Knopf, 1998); and T. J. Bouchard, Jr and J. C. Loehlin, ‘Genes, evolution, and personality’, Behavior Genetics, May 2001, pp. 243–73.

  6 S. Srivastava, O. P. John and S. D. Gosling, ‘Development of personality in early and middle adulthood: set like plaster or persistent change?’, Journal of Personality and Social Psychology, May 2003, pp. 1041–53.   7 See A. H. Buss, ‘Personality as traits’, American Psychologist, November 1989, pp. 1378–88; R. R. McCrae, ‘Trait psychology and the revival of personality and culture studies’, American Behavioral Scientist, September 2000, pp. 10–31; and L. R. James and M. D. Mazerolle, Personality in Work Organizations (Thousand Oaks, CA: Sage, 2002).   8 See, for instance, G. W. Allport and H. S. Odbert, ‘Trait names, a psycholexical study’, Psychological Monographs, 47 (1936); and R. B. Cattell, ‘Personality pinned down,’ Psychology Today, July 1973, pp. 40–46.  9 R. B. Kennedy and D. A. Kennedy, ‘Using the Myers-Briggs Type Indicator in career counseling’, Journal of Employment Counseling, March 2004, pp. 38–44. 10 OPP consultancy, http://www.opp.co.uk/MBTI_step_I.aspx. Accessed 23 June 2008. 11 See, for instance, D. J. Pittenger, ‘Cautionary comments regarding the Myers-Briggs Type Indicator’, Consulting Psychology Journal: Practice and Research, Summer 2005, pp. 210–21; L. Bess and R. J. Harvey, ‘Bimodal score distributions and the Myers-Briggs Type Indicator: fact or artifact?’ Journal of Personality Assessment, February 2002, pp. 176–86; R. M. Capraro and M. M. Capraro, ‘Myers-Briggs Type Indicator score reliability across studies: a meta-analytic reliability generalization study’, Educational & Psychological Measurement,

110  4 Personality and values August 2002, pp. 590–602; and R. C. Arnau, B. A. Green, D. H. Rosen, D. H. Gleaves and J. G. Melancon, ‘Are Jungian preferences really categorical? An empirical investigation using taxometric analysis’, Personality & Individual Differences, January 2003, pp. 233–51. 12 See, for example, J. M. Digman, ‘Personality structure: emergence of the Five-Factor model’, in M. R. Rosenzweig and L. W. Porter (eds), Annual Review of Psychology, vol. 41 (Palo Alto, CA: Annual Reviews, 1990), pp. 417–40; R. R. McCrae, ‘Special issue: the Five-Factor model: issues and applications’, Journal of Personality, June 1992; D. B. Smith, P. J. Hanges and M. W. Dickson, ‘Personnel selection and the Five-Factor model: reexamining the effects of applicant’s frame of reference’, Journal of Applied Psychology, April 2001, pp. 304–15; and M. R. Barrick and M. K. Mount, ‘Yes, personality matters: moving on to more important matters’, Human Performance, 18, 4 (2005), pp. 359–72. 13 W. Fleeson and P. Gallagher, ‘The implications of Big Five standing for the distribution of trait manifestation in behavior: fifteen experience-sampling studies and a meta-analysis’, Journal of Personality and Social Psychology, 97, 6 (2009), pp. 1097–114. 14 See, for instance, M. R. Barrick and M. K. Mount, ‘The Big Five personality dimensions and job performance: a meta-analysis’, Personnel Psychology, Spring 1991, pp. 1–26; G. M. Hurtz and J. J. Donovan, ‘Personality and job performance: the Big Five revisited’, Journal of Applied Psychology, December 2000, pp. 869–79; J. Hogan and B. Holland, ‘Using theory to evaluate personality and job-performance relations: a socioanalytic perspective’, Journal of Applied Psychology, February 2003, pp. 100–12; and M. R. Barrick and M. K. Mount, ‘Select on conscientiousness and emotional stability’, in E. A. Locke (ed.), Handbook of Principles of Organizational Behavior (Malden, MA: Blackwell, 2004), pp. 15–28. 15 M. K. Mount, M. R. Barrick and J. P. Strauss, ‘Validity of observer ratings of the Big Five personality factors’, Journal of Applied Psychology, April 1994, p. 272. Additionally confirmed by G. M. Hurtz and J. J. Donovan, ‘Personality and job performance: the Big Five revisited’; and M. R. Barrick, M. K. Mount and T. A. Judge, ‘The FFM personality dimensions and job performance: meta-analysis of meta-analyses’, International Journal of Selection and Assessment, 9 (2001), pp. 9–30. 16 A. E. Poropat, ‘A meta-analysis of the Five-Factor model of personality and academic performance’, Psychological Bulletin, 135, 2 (2009), pp. 322–38. 17 A. M. Cianci, H. J. Klein and G. H. Seijts, ‘The effect of negative feedback on tension and subsequent performance: the main and interactive effects of goal content and conscientiousness’, Journal of Applied Psychology, 95, 4 (2010), pp. 618–30. 18 H. Le, I. Oh, S. B. Robbins, R. Ilies, E. Holland and P. Westrick, ‘Too much of a good thing: curvilinear relationships between personality traits and job performance’, Journal of Applied Psychology, 96, 1 (2011), pp. 113–33. 19 T. Bogg and B. W. Roberts, ‘Conscientiousness and health-related behaviors: a meta-analysis of the leading behavioral contributors to mortality’, Psychological Bulletin, 130, 6 (2004), pp. 887–919. 20 G. J. Feist, ‘A meta-analysis of personality in scientific and artistic creativity’, Personality and Social Psychology Review, 2, 4 (1998), pp. 290–309; C. Robert and Y. H. Cheung, ‘An examination of the relationship between conscientiousness and group performance on a creative task’, Journal of Research in Personality, 44, 2 (2010), pp. 222–31; and M. Batey, T. Chamorro-Premuzic and A. Furnham, ‘Individual differences in ideational behavior. Can the Big Five and psychometric intelligence predict creativity scores?’ Creativity Research Journal, 22, 1 (2010), pp. 90–97.

21 R. J. Foti and M. A. Hauenstein, ‘Pattern and variable approaches in leadership emergence and effectiveness’, Journal of Applied Psychology, 92, 2 (2007), pp. 347–55. 22 L. I. Spirling and R. Persaud, ‘Extraversion as a risk factor’, Journal of the American Academy of Child & Adolescent Psychiatry, 42, 2 (2003), p. 130. 23 B. Weiss and R. S. Feldman, ‘Looking good and lying to do it: deception as an impression management strategy in job interviews’, Journal of Applied Social Psychology, 36, 4 (2006), pp. 1070–86. 24 J. A. LePine, J. A. Colquitt and A. Erez, ‘Adaptability to changing task contexts: effects of general cognitive ability, conscientiousness, and openness to experience’, Personnel Psychology, 53, 3 (2000), pp. 563–95; S. Clarke and I. Robertson, ‘An examination of the role of personality in accidents using meta-analysis’, Applied Psychology: An International Review, 57, 1 (2008), pp.  94–108; M. Baer, ‘The strength-of-weak-ties perspective on creativity: a comprehensive examination and extension’, Journal of Applied Psychology, 95, 3 (2010), pp. 592–601. 25 B. Laursen, L. Pulkkinen and R. Adams, ‘The antecedents and correlates of agreeableness in adulthood’, Developmental Psychology, 38, 4 (2002), pp. 591–603. 26 B. Barry and R. A. Friedman, ‘Bargainer characteristics in distributive and integrative negotiation,’ Journal of Personality and Social Psychology, February 1998, pp. 345–59. 27 T. A. Judge and J. E. Bono, ‘A rose by any other name . . . are self-esteem, generalized self-efficacy, neuroticism, and locus of control indicators of a common construct?’, in B. W. Roberts and R. Hogan (eds), Personality Psychology in the Workplace (Washington, DC: American Psychological Association), pp. 93–118. 28 A. Erez and T. A. Judge, ‘Relationship of core self-evaluations to goal setting, motivation, and performance’, Journal of Applied Psychology, 86, 6 (2001), pp. 1270–79. 29 A. N. Salvaggio, B. Schneider, L. H. Nishi, D. M. Mayer, A. Ramesh and J. S. Lyon, ‘Manager personality, manager service quality orientation, and service climate: test of a model’, Journal of Applied Psychology, 92, 6 (2007), pp. 1741–50; B. A. Scott and T. A. Judge, ‘The popularity contest at work: who wins, why, and what do they receive?’, Journal of Applied Psychology, 94, 1 (2009), pp. 20–33; and T. A. Judge and C. Hurst, ‘How the rich (and happy) get richer (and happier): relationship of core self-evaluations to trajectories in attaining work success’, Journal of Applied Psychology, 93, 4 (2008), pp. 849–63. 30 A. M. Grant and A. Wrzesniewksi, ‘I won’t let you down . . . or will I? Core self-evaluations, other-orientation, anticipated guilt and gratitude, and job performance’, Journal of Applied Psychology, 95, 1 (2010), pp. 108–121. 31 U. Malmendier and G. Tate, ‘CEO overconfidence and corporate investment’, Research Paper no. 1799, Stanford Graduate School of Business, June 2004. 32 R. Sandomir, ‘Star struck’, New York Times, 12 January 2007, pp. C10, C14. 33 R. G. Vleeming, ‘Machiavellianism: a preliminary review,’ Psychological Reports, February 1979, pp. 295–310. 34 R. Christie and F. L. Geis, Studies in Machiavellianism (New York: Academic Press, 1970), p. 312; and N. V. Ramanaiah, A. Byravan and F. R. J. Detwiler, ‘Revised neo personality inventory profiles of Machiavellian and non-Machiavellian people’, Psychological Reports, October 1994, pp. 937–8. 35 J. J. Dahling, B. G. Whitaker and P. E. Levy, ‘The development and validation of a new Machiavellianism scale’, Journal of Management, 35, 2 (2009), pp. 219–57.

EndNotes   111 36 Christie and Geis, Studies in Machiavellianism. 37 P. Cramer and C. J. Jones, ‘Narcissism, identification, and longitudinal change in psychological health: dynamic predictions’, Journal of Research in Personality 42, 5 (2008), pp. 1148–59; B. M. Galvin, D. A. Waldman and P. Balthazard, ‘Visionary communication qualities as mediators of the relationship between narcissism and attributions of leader charisma’, Personnel Psychology, 63, 3 (2010), pp. 509–37; and T. A. Judge, R. F. Piccolo and T. Kosalka, ‘The bright and dark sides of leader traits: a review and theoretical extension of the leader trait paradigm’, The Leadership Quarterly, 20, 6 (2009), pp. 855–75.

51 J. M. Crant, ‘Proactive behavior in organizations’, Journal of Management, 26, 3 (2000), p. 436. 52 P. D. Converse, Patrick J. Pathak, A. M. DePaul-Haddock, T. Gotlib and M. Merbedone, ‘Controlling your environment and yourself: implications for career success’, Journal of Vocational Behavior, 80 (2012), pp. 148–159. 53 G. Van Hoye and H. Lootens, ‘Coping with unemployment: personality, role demands, and time structure’, Journal of Vocational Behavior, 82 (2013), pp. 85–95.

38 M. Maccoby, ‘Narcissistic leaders: the incredible pros, the inevitable cons’, Harvard Business Review, January–February 2000.

54 G. Chen, J. Farh, E. M. Campbell-Bush, Z. Wu and X. Wu, ‘Teams as innovative systems: multilevel motivational antecedents of innovation in R&D teams’, Journal of Applied Psychology (2013).

39 W. K. Campbell and C. A. Foster, ‘Narcissism and commitment in romantic relationships: an investment model analysis’, Personality and Social Psychology Bulletin, 28, 4 (2002), pp. 484–95.

55 Z. Zhang, M. Wang and J. Shi, ‘Leader–follower congruence in proactive personality and work outcomes: the mediating role of leader–member exchange’, Academy of Management Journal, 55 (2012), pp. 111–30.

40 T. A. Judge, J. A. LePine and B. L. Rich, ‘The narcissistic personality: relationship with inflated self-ratings of leadership and with task and contextual performance’, Journal of Applied Psychology, 91, 4 (2006), pp. 762–76.

56 R. D. Meyer, R. S. Dalal and R. Hermida, ‘A review and synthesis of situational strength in the organizational sciences’, Journal of Management, 36 (2010), pp. 121–40.

41 See M. Snyder, Public Appearances/Private Realities: The Psychology of Self-Monitoring (New York: W. H. Freeman, 1987); and S. W. Gangestad and M. Snyder, ‘Self-monitoring: appraisal and reappraisal’, Psychological Bulletin, July 2000, pp. 530–55. 42 Snyder, Public Appearances/Private Realities. 43 D. V. Day, D. J. Shleicher, A. L. Unckless and N. J. Hiller, ‘Selfmonitoring personality at work: a meta-analytic investigation of construct validity’, Journal of Applied Psychology, April 2002, pp. 390–401. 44 M. Kilduff and D. V. Day, ‘Do chameleons get ahead? The effects of self-monitoring on managerial careers’, Academy of Management Journal, August 1994, pp. 1047–60; and A. Mehra, M. Kilduff and D. J. Brass, ‘The social networks of high and low self-monitors: implications for workplace performance’, Administrative Science Quarterly, March 2001, pp. 121–46. 45 R. N. Taylor and M. D. Dunnette, ‘Influence of dogmatism, risk-taking propensity, and intelligence on decision-making strategies for a sample of industrial managers’, Journal of Applied Psychology, August 1974, pp. 420–23. 46 I. L. Janis and L. Mann, Decision Making: A Psychological Analysis of Conflict, Choice, and Commitment (New York: The Free Press, 1977); W. H. Stewart, Jr and L. Roth, ‘Risk propensity differences between entrepreneurs and managers: a meta-­ analytic review’, Journal of Applied Psychology, February 2001, pp.  145–53; J. B. Miner and N. S. Raju, ‘Risk propensity differences between managers and entrepreneurs and between low- and high-growth entrepreneurs: a reply in a more conservative vein’, Journal of Applied Psychology, 89, 1 (2004), pp. 3–13; and W. H. Stewart, Jr and P. L. Roth, ‘Data quality affects meta-analytic conclusions: a response to Miner and Raju (2004) concerning entrepreneurial risk propensity’, Journal of Applied Psychology, 89, 1 (2004), pp. 14–21. 47 N. Kogan and M. A. Wallach, ‘Group risk taking as a function of members’ anxiety and defensiveness’, Journal of Personality, March 1967, pp. 50–63. 48 M. Friedman and R. H. Rosenman, Type A Behavior and Your Heart (New York: Alfred A. Knopf, 1974), p. 84. 49 Ibid., pp. 84–85. 50 K. W. Cook, C. A. Vance and E. Spector, ‘The relation of candidate personality with selection-interview outcomes,’ Journal of Applied Social Psychology, 30 (2000), pp. 867–85.

57 A. M. Grant and N. P. Rothbard, ‘When in doubt, seize the day? Security values, prosocial values, and proactivity under ambiguity’, Journal of Applied Psychology, 98, 5 (2013), pp. 810–19. 58 A. M. Watson, T. F. Thompson, J. V. Rudolph, T. J. Whelan, T. S. Behrend, et al., ‘When Big Brother is watching: goal orientation shapes reactions to electronic monitoring during online training’, Journal of Applied Psychology, 98, 4 (2013), pp. 642–57. 59 Y. Kim, L. Van Dyne, D. Kamdar and R. E. Johnson, ‘Why and when do motives matter? An integrative model of motives, role cognitions, and social support as predictors of OCB’, Organizational Behavior and Human Decision Processes, 121 (2013), pp. 231–45. 60 M. Rokeach, The Nature of Human Values (New York: The Free Press, 1973), p. 5. 61 M. Rokeach and S. J. Ball-Rokeach, ‘Stability and change in American value priorities, 1968–1981’, American Psychologist, 44, 5 (1989), pp. 775–84; and B. M. Meglino and E. C. Ravlin, ‘Individual values in organizations: concepts, controversies, and research’, Journal of Management, 24, 3 (1998), p. 355. 62 B. C. Holtz and C. M. Harold, ‘Interpersonal justice and deviance: the moderating effects of interpersonal justice values and justice orientation’, Journal of Management, February 2013, pp. 339–65 63 Rokeach, The Nature of Human Values, p. 6. 64 J. M. Munson and B. Z. Posner, ‘The factorial validity of a modified Rokeach value survey for four diverse samples’, Educational and Psychological Measurement, Winter 1980, pp.  1073–79; and W. C. Frederick and J. Weber, ‘The values of corporate managers and their critics: an empirical description and normative implications’, in W. C. Frederick and L. E. Preston (eds), Business Ethics: Research Issues and Empirical Studies (Greenwich, CT: JAI Press, 1990), pp. 123–44. 65 Frederick and Weber, ‘The values of corporate managers and their critics’. 66 Ibid., p. 132. 67 European Values Study, http://www.europeanvaluesstudy.eu/ 68 Talentdrain, ‘One size does not fit all: demographic differences in work values and employee engagement in the UK’, (2008) www. talentdrain.com/research. 69 See for a review, P. Gooderham, O. Nordhauga, K. Ringdalb and G. E. Birkelund ‘Job values among future business leaders: the

112  4 Personality and values impact of gender and social background’, Scandinavian Journal of Management, 20 (2004), pp. 277–95. 70 See, for example, J. Levitz, ‘Pitching 401(k)s to Generation Y is a tough sell’, Wall Street Journal, 27 September 2006, pp. B1, B2; P. Paul, ‘Global generation gap’, American Demographics, March 2002, pp. 18–19; N. Watson, ‘Generation wrecked’, Fortune, 14 October 2002, pp. 183–90; K. W. Smola and C. D. Sutton, ‘Generational differences: revisiting generational work values for the new millennium’, Journal of Organizational Behavior, 23 (2002), pp. 363–82; K. Mellahi and C. Guermat, ‘Does age matter? An empirical examination of the effect of age on managerial values and practices in India’, Journal of World Business, 39, 2 (2004), pp. 199–215; N. A. Hira, ‘You raised them, now manage them’, Fortune, 28 May 2007, pp. 38–46; R. R. Hastings, ‘Surveys shed light on generation Y career goals’, SHRM Online, March 2007, www.shrm.org; and S. Jayson, ‘The “millennials” come of age’, USA Today, 29 June 2006, pp. 1D, 2D. 71 J. L. Holland, Making Vocational Choices: A Theory of Vocational Personalities and Work Environments (Odessa, FL: Psychological Assessment Resources, 1997). 72 See, for example, J. L. Holland and G. D. Gottfredson, ‘Studies of the hexagonal model: an evaluation (or, the perils of stalking the perfect hexagon)’, Journal of Vocational Behavior, April 1992, pp. 158–70; T. J. Tracey and J. Rounds, ‘Evaluating Holland’s and Gati’s vocational-interest models: a structural meta-analysis’, Psychological Bulletin, March 1993, pp. 229–46; J. L. Holland, ‘Exploring careers with a typology: what we have learned and some new directions’, American Psychologist, April 1996, pp. 397–406; and S. X. Day and J. Rounds, ‘Universality of vocational interest structure among racial and ethnic minorities’, American Psychologist, July 1998, pp. 728–36. 73 See B. Schneider, ‘The people make the place’, Personnel Psychology, Autumn 1987, pp. 437–53; B. Schneider, H. W. Goldstein and D. B. Smith, ‘The ASA framework: an update’, Personnel Psychology, Winter 1995, pp. 747–73; A. L. Kristof, ‘Person–organization fit: an integrative review of its conceptualizations, measurement, and implications’, Personnel Psychology, Spring 1996, pp. 1–49; B. Schneider, D. B. Smith, S. Taylor and J. Fleenor, ‘Personality and organizations: a test of the homogeneity of personality hypothesis’, Journal of Applied Psychology, June 1998, pp. 462–70; W. Arthur Jr, S. T. Bell, A. J. Villado and D. Doverspike, ‘The use of person-organization fit in employment decision-making: an assessment of its criterion-related validity’, Journal of Applied Psychology, 91, 4 (2006), pp. 786–801; and J. R. Edwards, D. M. Cable, I. O. Williamson, L. S. Lambert and A. J. Shipp, ‘The phenomenology of fit: linking the person and  environment to the subjective experience of person–­ environment fit’, Journal of Applied Psychology, 91, 4 (2006), pp. 802–27. 74 Based on T. A. Judge and D. M. Cable, ‘Applicant personality, organizational culture, and organization attraction’, Personnel Psychology, Summer 1997, pp. 359–94. 75 M. L. Verquer, T. A. Beehr and S. E. Wagner, ‘A meta-analysis of relations between person–organization fit and work attitudes’, Journal of Vocational Behavior, 63, 3 (2003), pp. 473–89.

76 See, for instance, S. Yamagata, A. Suzuki, J. Ando, Y. Ono, K. Yutaka, N. Kijima, et al., ‘Is the genetic structure of human personality universal? A cross-cultural twin study from North America, Europe, and Asia’, Journal of Personality and Social Psychology, 90, 6 (2006), pp. 987–98; H. C. Triandis and E. M. Suh, ‘Cultural influences on personality’, Annual Review of Psychology, 53, 1 (2002), pp. 133–160; and R. R. McCrae, P. T. Costa Jr, T. A. Martin, V. E. Oryol, A. A. Rukavishnikov, I. G. Senin, et al., ‘Consensual validation of personality traits across cultures’, Journal of Research in Personality, 38, 2 (2004), pp. 179–201. 77 A. T. Church and M. S. Katigbak, ‘Trait psychology in the Philippines’, American Behavioral Scientist, 44, 1 (2000), pp. 73–94. 78 J. F. Salgado, ‘The Five-Factor model of personality and job performance in the European Community’, Journal of Applied Psychology, 82, 1 (1997), pp. 30–43. 79 G. Hofstede, Culture’s Consequences: International Differences in Work-Related Values (Beverly Hills, CA: Sage, 1980); G. Hofstede, Cultures and Organizations: Software of the Mind (London: McGraw-Hill, 1991); G. Hofstede, ‘Cultural constraints in management theories’, Academy of Management Executive, 7, 1 (1993), pp. 81–94; G. Hofstede and M. F. Peterson, ‘National values and organizational practices’, in N. M. Ashkanasy, C. M. Wilderom and M. F. Peterson (eds), Handbook of Organizational Culture and Climate (Thousand Oaks, CA: Sage, 2000), pp. 401– 16; and G. Hofstede, Culture’s Consequences: Comparing Values, Behaviors, Institutions, and Organizations Across Nations, 2nd edn (Thousand Oaks, CA: Sage, 2001). For criticism of this research, see B. McSweeney, ‘Hofstede’s model of national cultural differences and their consequences: a triumph of faith – a failure of analysis’, Human Relations, 55, 1 (2002), pp. 89–118. 80 V. Taras, B. L. Kirkman and P. Steel, ‘Examining the impact of culture’s consequences: a three-decade, multilevel, meta-analytic review of Hofstede’s cultural value dimensions’, Journal of Applied Psychology, 95, 5 (2010), pp. 405–39. 81 M. Javidan and R. J. House, ‘Cultural acumen for the global manager: lessons from project GLOBE’, Organizational Dynamics, 29, 4 (2001), pp. 289–305; and R. J. House, P. J. Hanges, M. Javidan and P. W. Dorfman (eds), Leadership, Culture, and Organizations: The GLOBE Study of 62 Societies (Thousand Oaks, CA: Sage, 2004). 82 J. P. Meyer, D. J. Stanley, T. A. Jackson, K. J. McInnis, E. R. Maltin, et al., ‘Affective, normative, and continuance commitment levels across cultures: a meta-analysis’, Journal of Vocational Behavior, 80 (2012), pp. 225–45. 83 B. Adkins and D. Caldwell, ‘Firm or subgroup culture: where does fitting in matter most?’ Journal of Organizational Behavior, 25, 8 (2004), pp. 969–78; H. D. Cooper-Thomas, A. van Vianen and N. Anderson, ‘Changes in person–organization fit: the impact of socialization tactics on perceived and actual P–O fit’, European Journal of Work & Organizational Psychology, 13, 1 (2004), pp.  52–78; and C. A. O’Reilly, J. Chatman and D. F. Caldwell, ‘People and organizational culture: a profile comparison approach to assessing person–organization fit’, Academy of Management Journal, 34, 3 (1991), pp. 487–516.

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CHAPTER 5 Perception, individual decision making and creativity Learning objectives After studying this chapter, you should be able to: 1 Define perception and explain the factors that influence it. 2 Explain attribution theory and list the three determinants of attribution. 3 Identify the shortcuts individuals use in making judgements about others. 4 Explain the link between perception and decision making. 5 Apply the rational model of decision making and contrast it with bounded rationality and intuition. 6 List and explain the common decision biases or errors. 7 Explain how individual differences and organizational constraints affect decision making. 8 Contrast the three ethical decision criteria. 9 Define creativity and describe the three-stage model of creativity.

Indecision and delays are the parents of failure. George Canning

THE PRICETAG FOR CREATIVITY: €27 MILLION. THE RETURN: PRICELESS

Robyn Beck/AFP/Getty Images

Nicholas D’Aloisio is not your average London teen. Yahoo! purchased his app Summly for a reported €27 million in 2013 when he was 17, he was the youngest member of the Forbes ‘30 Under 30’ Games & Apps innovators and a recipient of the Wall Street Journal ‘Innovator of the Year’ award. Personable and engaging, D’Aloisio is also perhaps not your average techie. He is the ideal entrepreneur, able to turn his creativity into innovative decision making and use his natural charisma to bring his ideas to the global marketplace. D’Aloisio’s rare combination of creativity and personality makes him priceless in the high-stakes Silicon Valley marketplace. D’Aloisio showed creative talent early, like many innovators. His mother Diane, a London lawyer, said, ‘I remember him creating 3D models on his computer as a 10-year-old . . . we always knew Nicholas was technical and talented.’ D’Aloisio has always sought the cutting edge of his field and has been quick to apply his creativity to designing new products. When Apple launched its App Store in 2008, he wanted to work with the new platform even before Apple was ready. ‘I went into an Apple store with my dad and we asked one of the assistants how we did this [make an app], and they didn’t know what we were talking about,’ he said. D’Aloisio taught himself basic programming while he waited for the public release of the app development process. In August 2008, he launched a starter app, FingerMill, a treadmill for fingers. It made money the first day, providing early encouragement. D’Aloisio said, ‘So as a 12-year-old I was like, “This is awesome”.’ He continued to innovate, even though some efforts were less successful. ‘But every time I did an app I learned more.’

D’Aloisio’s learning, experience and creativity led him to perceive a need for an innovative product that would meet a consumer need. At school in 2011, D’Aloisio was ‘using Twitter a lot on my phone, and was realizing there was a massive gap between the link on the tweet and the full story. If you could come up with a summary layer to show in Twitter, that would be awesome.’ He developed an algorithm app called Trimit to condense news articles into the space of an iPhone screen with an engaging design. ‘It helps publishers reach out to a younger audience,’ D’Aloisio says. ‘There is a generation of skimmers. It’s not that they don’t want to read in-depth content, but they want to evaluate what the content is before they commit time.’ D’Aloisio went from technological innovator to marketable commodity when his personality helped win him investors, including billionaire Li Ka Shing of Hong Kong, actors Ashton Kutcher and Stephen Fry, Wendi Murdoch (wife of media mogul Rupert Murdoch) and Yoko Ono. Zynga Inc. and SRI International R&D helped bring the new version of Trimit, called Summly, online in November 2012. Then the young innovator caught the attention of CEO Marissa Mayer, who was searching for spokespeople to boost Yahoo!’s tech image. It seems Mayer wanted D’Aloisio’s creativity and perceptive decision-making skills more than his latest innovation, because Yahoo! bought Summly with plans to shut it down immediately. What Yahoo! gets is D’Aloisio’s presence, at least for a while, and only if Mayer makes an exception to Yahoo!’s ban on working from home – because D’Aloisio has an Oxford degree to pursue. The €27 million teen is noncommittal. He thinks he will work for Yahoo! a few years but said, ‘I have no limits on time. I want to go in with open eyes and try to innovate.’

Sources: A. Efrati, ‘At 17, app builder rockets to riches from Yahoo! deal’, Wall Street Journal, 26 March 2013, p. B1; E. Samer, ‘Summly creator Nick D’Aloisio: “I try to maintain a level of humbleness”,’ Guardian, 29 March 2013, www.guardian.co.uk/technology/2013/mar/29/summly-creator-nick-daloisio-interview; and B. Stetler, ‘He has millions and a new job at Yahoo!. And soon he’ll be 18’, New York Times, 26 March 2013, pp. A1, A3.

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The case of Nicholas D’Aloisio illustrates how important – and perhaps rare – an i­ndividual’s creativity can be to an organization. The interpersonal skills of some innovators like D’Aloisio, who is described as humble and charismatic, can help bring ideas to the marketplace. As we will see later in the chapter, the creativity of individuals can lead to true innovation that solves problems. To better understand, we first explore our perceptions and how they affect our decision-making process.

REFLECTION Think about how you completed a recent task at work or college. Describe your decision-making process. Was the outcome effective?

What is perception? 1 Define perception Perception is a process by which individuals organize and interpret their sensory impressions and explain the factors in order to give meaning to their environment. What we perceive can be substantially different that influence it. from objective reality. For example, all employees in a firm may view it as a great place to perception A process by which individuals organize and interpret their sensory impressions in order to give meaning to their environment.

work – favourable working conditions, interesting job assignments, good pay, excellent benefits, understanding and responsible management – but, as most of us know, it’s very unusual to find such agreement. Why is perception important in the study of OB? Simply because people’s behaviour is based on their perception of what reality is, not on reality itself. The world as it is perceived is the world that is behaviourally important.

Factors that influence perception How do we explain the fact that individuals may look at the same thing yet perceive it differently? A number of factors operate to shape and sometimes distort perception. These factors can reside in the perceiver; in the object, or target, being perceived; or in the context of the situation in which the perception is made (see Figure 5.1). When an individual looks at a target and attempts to interpret what he or she sees, that interpretation is heavily influenced by the personal characteristics of the individual perceiver. Personal characteristics that affect perception include a person’s attitudes, personality, motives, interests, past experiences and expectations. For instance, if you expect police officers to be authoritative, young people to be lazy, or individuals holding public office to be unscrupulous, you may perceive them as such, regardless of their actual traits. Characteristics of the target we observe can affect what we perceive. Loud people are more likely to be noticed in a group than quiet ones. So, too, are extremely attractive or unattractive individuals. Because we don’t look at targets in isolation, the relationship of a target to its background also influences perception, as does our tendency to group close things and similar things together. For instance, women, people of colour, or members of any other group that has clearly distinguishable characteristics are often perceived as alike in other, unrelated ways as well. The context in which we see objects or events is also important. The time at which we see an object or event can influence attention, as can location, light, heat or any number of situational factors. For example, at a nightclub on Saturday night, you may not notice a young guest dressed flamboyantly. Yet that same person so attired for your Monday morning management class would certainly catch your attention (and that of the rest of the class). Neither the perceiver nor the target changed between Saturday night and Monday morning, but the situation is different.

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Factors in the perceiver • Attitudes • Motives • Interests • Experience • Expectations Factors in the situation • Time • Work setting • Social setting

Perception

Factors in the target • Novelty • Motion • Sounds • Size • Background • Proximity • Similarity

Figure 5.1  Factors that influence perception

Person perception: making judgements about others 2  Explain attribution theory and list the three determinants of attribution.

Now we turn to the most relevant application of perception concepts to OB. This is the issue of person perception, or the perceptions people form about each other.

European stereotypes How close are people’s perceptions to reality? An interesting survey of eight European Union member countries (Britain, France, Germany, Spain, Italy, Greece, Poland and the Czech Republic) was conducted by Pew Global. Respondents were asked which country in the European Union is the hardest-working, and which is the most corrupt. Seven of the nations all perceived Germany as being the most hardworking whilst it was only the Greeks who disagreed and elected themselves. But how close to reality is this widely-held perception? Greece actually did work the longest hours in Europe at the time of the poll (an average of 42hr per

OB IN THE NEWS week) according to OECD data. The Germans clocked about 35 hours, two less than the EU average. Perceptions of corruption may be a little closer to reality. Italy was named by five of the eight nations (including the Italians) as being the most corrupt. According to Transparency International’s 2015 Corruption Index, Italy was ranked the second lowest of the European Union countries (slightly ahead of Bulgaria). However, ranked at 61 of 167 globally, Italy was still ranked higher than many other nations outside of the EU. Sources: http://www.pewglobal.org/2012/05/29/european-unity-on-the-rocks/ accessed 20/4/2016; www.transparency.org; http://www.oecd.org/

Attribution theory Non-living objects such as desks, machines and buildings are subject to the laws of nature, but they have no beliefs, motives or intentions. People do. That’s why when we observe people, we attempt to develop explanations of why they behave in certain ways. Our perception and judgement of a person’s actions, therefore, will be significantly influenced by the assumptions we make about that person’s internal state.

118  5 Perception, individual decision making and creativity attribution theory An attempt to determine whether an individual’s behaviour is internally or externally caused.

Attribution theory tries to explain the ways in which we judge people differently, depending on the meaning we attribute to a given behaviour.1 It suggests that when we observe an individual’s behaviour, we attempt to determine whether it was internally or externally caused. That determination, however, depends largely on three factors: (1) distinctiveness, (2) consensus and (3) consistency. First, let’s clarify the differences between internal and external causation and then we’ll elaborate on each of the three determining factors. Internally caused behaviours are those we believe to be under the personal control of the individual. Externally caused behaviour is what we imagine the situation forced the individual to do. For example, if one of your employees is late for work, you might attribute their lateness to their partying into the small hours of the morning and then oversleeping. This is an internal attribution. But if you attribute their arriving late to an automobile accident that tied up traffic, then you are making an external attribution. Now let’s discuss each of the three determining factors. Distinctiveness refers to whether an individual displays different behaviours in different situations. Is the employee who arrives late today also the one co-workers say regularly disregards commitments? What we want to know is whether this behaviour is unusual. If it is, we are likely to give it an external attribution. If it’s not unusual, we will probably judge the behaviour to be internal. If everyone who faces a similar situation responds in the same way, we can say the behaviour shows consensus. The behaviour of our tardy employee meets this criterion if all employees who took the same route to work were also late. From an attribution perspective, if consensus is high, you would probably give an external attribution to the employee’s tardiness, whereas if other employees who took the same route made it to work on time, you would attribute their lateness to an internal cause. Finally, an observer looks for consistency in a person’s actions. Does the person respond the same way over time? Coming in 10 minutes late for work is not perceived in the same way for an employee for whom it is an unusual case (they haven’t been late for several months) as it is for an employee for whom it is part of a routine pattern (they are late two or three times a week). The more consistent the behaviour, the more we are inclined to attribute it to internal causes. Figure 5.2 summarizes the key elements in attribution theory. It tells us, for instance, that if an employee, Joanne Dickinson, generally performs at about the same level on other related tasks as she does on her current task (low distinctiveness), if other employees frequently perform differently – better or worse – than Joanne does on that current task (low consensus), and if Joanne’s performance on this current task is consistent over time (high consistency), you or anyone else judging Joanne’s work will be likely to hold her primarily responsible for her task performance (internal attribution). One of the most interesting findings from attribution theory is that errors or biases distort attributions. For instance, substantial evidence suggests that when we make judgements about

Observation

Attribution of cause

Interpretation High Distinctiveness

Low High

Individual behaviour

Consensus

Low High

Consistency

Figure 5.2  Attribution theory

Low

External Internal External Internal Internal External

Person perception: making judgements about others   119

the behaviour of other people, we tend to underestimate the influence of external factors and overestimate the influence of internal or personal factors.2 This fundamental attribution error can explain why a sales manager is prone to attribute the poor performance of her sales agents to laziness rather than to the innovative product line introduced by a competitor. Individuals and organizations also tend to attribute their own successes to internal factors such as ability or effort, while putting the blame for failure on external factors such as bad luck or unproductive co-workers. People also tend to attribute ambiguous information as relatively flattering, accept positive feedback and reject negative feedback. This is the self-serving bias.3 For example, when former Enron CEO Ken Lay was tried for fraud, he blamed former Chief Financial Officer Andrew Fastow, saying, ‘I think the primary reason for Enron’s collapse was Andy Fastow and his little group of people and what they did.’ An interesting study asked one group of people, ‘If someone sues you and you win the case, should he pay your legal costs?’ Eighty-five per cent responded ‘yes’. Another group was asked, ‘If you sue someone and lose the case, should you pay his costs?’ Only 44 per cent answered ‘yes’.4 The evidence on cultural differences in perception is mixed, but most suggests there are differences across cultures in the attributions people make.5 One study found Korean managers were less prone to self-serving bias – they tended to accept responsibility for group failure ‘because I was not a capable leader’ instead of attributing failure to group members.6 On the other hand, Asian managers are more likely to blame institutions or whole organizations, whereas Western observers believe individual managers should get blame or praise.7 That probably explains why US newspapers feature the names of individual executives when firms do poorly, whereas Asian media cover how the firm as a whole has failed. This tendency to make group-based attributions also explains why individuals from Asian cultures are more likely to make group-based stereotypes.8 Attribution theory was developed based on experiments with US and western European workers. But these studies suggest caution in making attribution theory predictions in non-Western societies, especially in countries with strong collectivist traditions.

fundamental attribution error The tendency to underestimate the influence of external factors and overestimate the influence of internal factors when making judgements about the behaviour of others.

Andrew Fox/Alamy

self-serving bias The tendency for individuals to attribute their own successes to internal factors and put the blame for failures on external factors.

A well-known example of self-serving bias in action involves a student taking an assessment. If the student does well, the success is more likely to be attributed to factors such as ability and/or effort (internal factors). However, if the student does not perform well, often the blame is placed on factors such as the test was unfair, the instructor graded harshly or it was impossible to study because of a large workload (external factors). Self-serving bias also manifests itself in many work situations involving good and poor performance.

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Differences in attribution tendencies don’t mean the basic concepts of attribution completely differ across cultures, though. Self-serving biases may be less common in East Asian cultures, but evidence suggests they still operate across cultures.9 Studies indicate Chinese managers assess blame for mistakes using the same distinctiveness, consensus and consistency cues Western managers use.10 They also become angry and punish those deemed responsible for failure, a reaction shown in many studies of Western managers. This means the basic process of attribution applies across cultures, but that it takes more evidence for Asian managers to conclude someone else should be blamed.

Frequently used shortcuts in judging others 3  Identify the shortcuts individuals use in making judgements about others.

We use a number of shortcuts when we judge others. These techniques are frequently valuable: they allow us to make accurate perceptions rapidly and provide valid data for making predictions. However, they are not foolproof. They can and do get us into trouble. Understanding these shortcuts can help you recognize when they can result in significant distortions.

Selective perception

selective perception The tendency to selectively interpret what one sees on the basis of one’s interests, background, experience and attitudes.

Any characteristic that makes a person, an object or an event stand out will increase the probability that we will perceive it. Why? Because it is impossible for us to assimilate everything we see; we can take in only certain stimuli. This tendency explains why you’re more likely to notice cars like your own or why a boss may reprimand some people and not others who are doing the same thing. Because we can’t observe everything going on about us, we engage in selective perception. But we don’t choose randomly: we select according to our interests, background, experience and attitudes. Selective perception allows us to speed-read others, but not without the risk of drawing an inaccurate picture. Seeing what we want to see, we can draw unwarranted conclusions from an ambiguous situation. A classic example shows how vested interests can significantly influence which problems we see. Dearborn and Simon performed a perceptual study in which 23 business executives read a comprehensive case describing the organization and activities of a steel company.11 Six were in sales, five in production, four in accounting, and eight in miscellaneous functions. Each manager was asked to write down the most important problem he found in the case. Eightythree per cent of the sales executives rated sales important; only 29 per cent of the others did so. The researchers concluded that participants perceived as important the aspects of a situation specifically related to their own unit’s activities and goals. A group’s perception of organizational activities is selectively altered to align with the vested interests they ­represent.

Halo effect halo effect The tendency to draw a general impression about an individual on the basis of a single characteristic.

When we draw a general impression about an individual on the basis of a single characteristic, such as intelligence, sociability or appearance, a halo effect is operating.12 Consider former Hewlett-Packard CEO Carly Fiorina. Early in her tenure at the global technology solutions company, she was lauded as articulate, decisive, charismatic, savvy and visionary. At the time of her appointment, BusinessWeek said, ‘She has it all.’ After Fiorina was fired, though, she was described as unproven, egotistical, inflexible and uncompromising. BusinessWeek faulted her for her unwillingness to delegate and her inability to execute.13 So, when Fiorina was deemed effective, everything about her was good. But when she was fired for supposed ineffectiveness, the same people who lauded her before now saw few if any redeeming features. That’s both sides of the halo (halo or horns, you might say). The reality of the halo effect was confirmed in a classic study in which subjects were given a list of traits such as intelligent, skilful, practical, industrious, determined and warm and asked to evaluate the person to whom those traits applied.14 Subjects judged the person to be wise, humorous, popular and imaginative. When the same list was modified to include ‘cold’ instead of ‘warm’, a completely different picture emerged. Clearly, the subjects were allowing a single trait to influence their overall impression of the person they were judging.

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Contrast effects

contrast effects Evaluation of a person’s characteristics that is affected by comparisons with other people recently encountered who rank higher or lower on the same characteristics.

An old adage among entertainers says, ‘Never follow an act that has kids or animals in it.’ Why? Audiences love children and animals so much that you’ll look bad in comparison. This example demonstrates how contrast effects can distort perceptions. We don’t evaluate a person in isolation. Our reaction to a person is influenced by other persons we have recently ­encountered. In a series of job interviews, for instance, interviewers can make distortions in any given candidate’s evaluation as a result of his place in the interview schedule. A candidate is likely to receive a more favourable evaluation if preceded by mediocre applicants and a less favourable evaluation if preceded by strong applicants.

Stereotyping stereotyping Judging someone on the basis of one’s perception of the group to which that person belongs.

When we judge someone on the basis of our perception of the group to which he or she belongs, we are using the shortcut called stereotyping.15 We rely on generalizations every day because they help us make decisions quickly. They are a means of simplifying a complex world. It’s less difficult to deal with an unmanageable number of stimuli if we use heuristics or stereotypes. The problem occurs, of course, when we generalize inaccurately or too much. In organizations, we frequently hear comments that represent stereotypes based on gender, age, race, religion, ethnicity and even weight:16 ‘Women won’t relocate for a promotion’, ‘men aren’t interested in child care’, ‘older workers can’t learn new skills’, ‘overweight people lack discipline’. Research suggests stereotypes operate emotionally and often below the level of conscious awareness, making them particularly hard to challenge and change.17 Stereotypes can be so deeply ingrained and powerful that they influence life-and-death decisions. One US study showed that, controlling for a wide array of factors (such as aggravating or mitigating circumstances), the degree to which black defendants in murder trials looked stereotypically black essentially doubled their odds of receiving a death sentence if convicted.18 One problem of stereotypes is that they are widespread generalizations, though they may not contain a shred of truth when applied to a particular person or situation. We have to monitor ourselves to make sure we’re not unfairly applying a stereotype in our evaluations and decisions. Stereotypes are an example of the warning, ‘The more useful, the more danger from misuse.’

Specific applications of shortcuts in organizations People in organizations are always judging each other. Managers must appraise their employees’ performances. We evaluate how much effort our co-workers are putting into their jobs. When a new person joins a work team, the other members immediately ‘size them up’. In many cases, our judgements have important consequences for the organization. Let’s briefly look at a few of the most obvious applications.

Employment interview A major input into who is hired and who is rejected in an organization is the employment interview. It’s fair to say that few people are hired without an interview. But evidence indicates that interviewers make perceptual judgements that are often inaccurate.19 They generally draw early impressions that very quickly become entrenched. Research shows that we form impressions of others within a tenth of a second, based on our first glance at them.20 Recent research indicates that our individual intuition about a job candidate is not reliable in predicting job performance, but that collecting input from multiple independent evaluators can be predictive.21 Most interviewers’ decisions change very little after the first four or five minutes of an interview. As a result, information elicited early in the interview carries greater weight than does information elicited later, and a ‘good applicant’ is ­probably characterized more by the absence of unfavourable characteristics than by the presence of favourable ones.

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Performance expectations self-fulfilling prophecy A situation in which a person inaccurately perceives a second person, and the resulting expectations cause the second person to behave in ways consistent with the original perception.

People attempt to validate their perceptions of reality, even when those perceptions are faulty.22 The terms self-fulfilling prophecy and Pygmalion effect have evolved to characterize the fact that an individual’s behaviour is determined by other people’s expectations. In other words, if a manager expects big things from her people, they’re not likely to let her down. Similarly, if a manager expects people to perform minimally, they’ll tend to behave so as to meet those low expectations. The expectations become reality. The self-fulfilling prophecy has been found to affect the performance of students in school, soldiers in combat, and even accountants.23

Performance evaluation We’ll discuss performance evaluations more fully in Chapter 17, but note for now that they are very much dependent on the perceptual process.24 An employee’s future is closely tied to the appraisal – promotions, pay rises and continuation of employment are among the most obvious outcomes. Although the appraisal can be objective (for example, a salesperson is appraised on how many sales he generates in his territory), many jobs are evaluated in subjective terms. Subjective evaluations of performance, though often necessary, are problematic because of all the errors we’ve discussed thus far – selective perception, contrast effects, halo effects and so on – affect them. Ironically, sometimes performance ratings say as much about the evaluator as they do about the employee!

The link between perception and individual decision making 4  Explain the link between perception and decision making. decisions Choices made from among two or more alternatives. problem A discrepancy between the current state of affairs and some desired state.

Individuals make decisions, choices from among two or more alternatives. Top managers determine their organization’s goals, what products or services to offer, how best to finance operations, or where to locate a new manufacturing plant. Middle- and lower-level managers set production schedules, select new employees and decide how to allocate pay rises. ­Organizations have begun empowering their non-managerial employees with decision-making authority historically reserved for managers alone. Individual decision making is thus an important part of organizational behaviour. But the way individuals make decisions and the quality of their choices are largely influenced by their perceptions. Decision making occurs as a reaction to a problem.25 That is, a discrepancy exists between the current state of affairs and some desired state, requiring us to consider alternative courses of action. For example, if your car breaks down, and you rely on it to get to work, you have a problem that requires a decision on your part. Unfortunately, most problems don’t come neatly packaged and labelled ‘problem’. One person’s problem is another person’s satisfactory state of affairs. One manager may view her division’s 2 per cent decline in quarterly sales to be a serious problem requiring immediate action on her part. In contrast, her counterpart in another division of the same company, who also had a 2 per cent sales decrease, might consider that percentage quite acceptable. So the awareness that a problem exists and whether a decision needs to be made is a perceptual issue. Moreover, every decision requires us to interpret and evaluate information. We typically receive data from multiple sources and need to screen, process and interpret it. Which data, for instance, are relevant to the decision and which are not? The perceptions of the decision maker will answer that question. We also need to develop alternatives and evaluate the strengths and weaknesses of each. Again, because alternatives don’t come with their strengths and weaknesses clearly marked, an individual decision maker’s perceptual process will have a large bearing on the final outcome. Finally, throughout the entire decision-making process, perceptual distortions often surface that can bias analysis and ­conclusions.

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Decision making in organizations Business schools generally train students to follow rational decision-making models. While these models have considerable merit, they don’t always describe how people actually make decisions. This is where OB enters the picture. If we are to improve how we make decisions in organizations, we need to understand the decision-making errors that people commit (in addition to the perception errors just discussed). In the sections that follow, we describe these errors, beginning with a brief overview of the rational decision-making model.

5  Apply the rational model of decision making and contrast it with bounded rationality and intuition.

Does multicultural experience make for better decisions? Does living in multiple cultures or countries improve decision making? One recent three-part study looked at the effect of multicultural identity on individual creativity and career success. The researchers defined multicultural identity as a strong identification with the culture in both the host country where the subject currently lives and the home country where the person grew up. One finding was that European MBA students with multicultural identities were more creative on three different tasks. Another was that multicultural US MBA students had higher levels of innovation, measured in terms of the new ventures they started and novel products or services they created. The third part of the study showed that Israeli

glOBal

managers with multicultural identities were rated as higher performers and more promotable than Israeli managers who scored low on the multicultural identity measure. All three parts revealed that the reason multiculturals were more creative and effective was ‘integrative complexity’ – the degree to which they approached problems from multiple points of view (the researchers measured this by asking participants to describe a problem and having independent evaluators rate their responses). Source: W. W. Maddux, ‘Getting the most out of living abroad: biculturalism and integrative complexity as key drivers of creative and professional success’, Journal of Personality and Social Psychology, 103 (2012), pp. 520–42.

The rational model, bounded rationality and intuition

Larry Busacca/Getty Images for WICT

In OB, there are generally accepted constructs of decision making each of us employs to make determinations: rational decision making, bounded rationality and intuition. Though

Xerox Corporation chairman and chief executive, Ursula Burns, is committed to reframe the company as a service business rather than predominantly a seller of printers and copiers. But the complexity of a company of more than 140,000 employees, 12,000 active patents, offices in 180 countries and revenues of around €20 billion means that Burns will need to employ bounded rationality to make decisions.

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their processes outwardly make sense, they may not lead to the most accurate (or best) decisions. More importantly, there are times when one strategy may lead to a better outcome than another in a given situation.

Rational decision making rational Characterized by making consistent, value-maximizing choices within specified constraints.

We often think the best decision maker is rational and makes consistent, value-maximizing choices within specified constraints.26 These decisions follow a six-step rational decision-making model.27 The six steps are listed below:

rational decisionmaking model A decision-making model that describes how individuals should behave in order to maximize some outcome.

3. Allocate weights to the criteria.

1. Define the problem. 2. Identify the decision criteria. 4. Develop the alternatives. 5. Evaluate the alternatives. 6. Select the best alternative.

The rational decision-making model relies on a number of assumptions, including that the decision maker has complete information, is able to identify all the relevant options in an unbiased manner and chooses the option with the highest utility.28 As you might imagine, most decisions in the real world don’t follow the rational model. For instance, people are usually content to find an acceptable or reasonable solution to a problem rather than an optimal one. Choices tend to be limited to the neighbourhood of the problem symptom and of the current alternative. As one expert in decision making put it, ‘Most significant decisions are made by judgement, rather than by a defined prescriptive model.’29 What’s more, people are remarkably unaware of making suboptimal decisions.30

Bounded rationality

bounded rationality A process of making decisions by constructing simplified models that extract the essential features from problems without capturing all their complexity.

Most people respond to a complex problem by reducing it to a level at which they can readily understand it. The limited information-processing capability of human beings makes it impossible to assimilate and understand all the information necessary to optimise.31 So people ­satisfice; that is, they seek solutions that are satisfactory and sufficient. When you considered which college to attend, did you look at every viable alternative? Did you carefully identify all the criteria that were important in your decision? Did you evaluate each alternative against the criteria in order to find the optimal college? The answers are probably ‘no’. Well, don’t feel bad. Few people made their university choice this way. Instead of optimizing, you probably satisficed. Because the human mind cannot formulate and solve complex problems with full rationality, we operate within the confines of bounded rationality. We construct simplified models that extract the essential features from problems without capturing all their complexity.32 We can then behave rationally within the limits of the simple model. How does bounded rationality work for the typical individual? Once we’ve identified a problem, we begin to search for criteria and alternatives. But the list of criteria is likely to be far from exhaustive. We identify a limited list of the most conspicuous choices, both easy to find and highly visible, that usually represent familiar criteria and tried-and-true solutions. Next, we begin reviewing them, but our review will not be comprehensive. Instead, we focus on alternatives that differ only in a relatively small degree from the choice currently in effect. Following familiar and well-worn paths, we review alternatives only until we identify one that is ‘good enough’ – that meets an acceptable level of performance. That ends our search. So the solution represents a satisficing choice – the first acceptable one we encounter – rather than an optimal one. Satisficing is not always bad – a simple process may frequently be more sensible than the traditional rational decision-making model.33 To use the rational model, you need to gather a great deal of information about all the options, compute applicable weights and then calculate values

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across a huge number of criteria. All these processes can cost time, energy and money. If there are many unknown weights and preferences, the fully rational model may not be any more accurate than a best guess. Sometimes a fast-and-frugal process of solving problems might be your best option. Returning to your college choice, would it be best to fly around the world to visit dozens of potential campuses and pay application fees for all? That depends: can you know what type of college is best for you when in high school, or is there a lot of unknown information about how your interests are going to develop? It might be smarter to satisfice by finding a few colleges that match most of your preferences and then focus your attention on differentiating between those.

Intuition intuitive decision making An unconscious process created out of distilled experience.

Perhaps the least rational way of making decisions is to rely on intuition. Intuitive decision making is a nonconscious process created from distilled experience.34 Its defining qualities are that it occurs outside conscious thought; it relies on holistic associations, or links between disparate pieces of information; it’s fast; and it’s affectively charged, meaning that it usually engages the emotions.35 While intuition isn’t rational, it isn’t necessarily wrong. Nor does it always contradict rational analysis; the two can complement each other. Nor is intuition superstition, or the product of some magical or paranormal sixth sense. Intuition is complex and based on years of experience and learning. Does intuition help effective decision making? Researchers are divided, but most experts are sceptical, in part because intuition is hard to measure and analyse. Probably the best advice from one expert is: ‘Intuition can be very useful as a way of setting up a hypothesis but is unacceptable as “proof”.’ Use hunches derived from your experience to speculate, yes, but always make sure to test those hunches with objective data and rational, dispassionate analysis.36

Common biases and errors in decision making 6  List and explain the common decision biases or errors.

Decision makers engage in bounded rationality, but they also allow systematic biases and errors to creep into their judgements.37 To minimize effort and avoid trade-offs, people tend to rely too heavily on experience, impulses, gut feelings and convenient rules of thumb. Shortcuts can be helpful; however, they can distort rationality. Figure 5.3 provides some suggestions for how to avoid falling into these biases and errors. The following sections explore the most common biases in decision making.

Focus on goals. Without goals, you can’t be rational, you don’t know what information you need, you don’t know which information is relevant and which is irrelevant, you’ll find it difficult to choose between alternatives, and you’re far more likely to experience regret over the choices you make. Clear goals make decision making easier and help you eliminate options that are inconsistent with your interests. Look for information that disconfirms your beliefs. One of the most effective means for counteracting overconfidence and the confirmation and hindsight biases is to actively look for information that contradicts your beliefs and assumptions. When we overtly consider various ways we could be wrong, we challenge our tendencies to think we’re smarter than we actually are. Don’t try to create meaning out of random events. The educated mind has been trained to look for cause-and-effect relationships. When something happens, we ask why. And when we can’t find reasons, we often invent them. You have to accept that there are events in life that are outside your control. Ask yourself if patterns can be meaningfully explained or whether they are merely coincidence. Don’t attempt to create meaning out of coincidence. Increase your options. No matter how many options you’ve identified, your final choice can be no better than the best of the option set you’ve selected. This argues for increasing your decision alternatives and for using creativity in developing a wide range of diverse choices. The more alternatives you can generate, and the more diverse those alternatives, the greater your chance of finding an outstanding one.

Figure 5.3  Reducing biases and errors Source: S. P. Robbins, Decide & Conquer: Making Winning Decisions and Taking Control of Your Life (Upper Saddle River, NJ: Financial Times/Prentice Hall, 2004), pp. 164–8.

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Overconfidence bias Recent research continues to conclude that we tend to be overconfident about our abilities and about the abilities of others; also, that we are usually not aware of this bias.38 It’s been said that ‘no problem in judgement and decision making is more prevalent and more potentially catastrophic than overconfidence’.39 When we’re given factual questions and asked to judge the probability that our answers are correct, we tend to be overly optimistic. When people say they’re 90 per cent confident about the range a certain number might take, their estimated ranges contain the correct answer only about 50 per cent of the time – and experts are no more accurate in setting up confidence intervals than are novices.40 Individuals whose intellectual and interpersonal abilities are weakest are most likely to overestimate their performance and ability.41 There’s also a negative relationship between entrepreneurs’ optimism and performance of their new ventures: the more optimistic, the less successful.42 The tendency to be too confident about their ideas might keep some from planning how to avoid problems that arise. Investor overconfidence operates in a variety of ways.43 Finance professor Terrance Odean says, ‘People think they know more than they do, and it costs them.’ Investors, especially novices, overestimate not just their skill in processing information, but also the quality of the information they’re working with. Test your own confidence level with investments: compare the long-term returns of your stock market picks relative to index funds. You’ll find an overall index performs as well as, or better than, hand-picked stocks. The main reason many people resist index funds is that they think they’re better at picking stocks than the average person, but most investors will only do as well as or only slightly better than the market.

Anchoring bias anchoring bias A tendency to fixate on initial information, from which one then fails to adequately adjust for subsequent information.

The anchoring bias is a tendency to fixate on initial information and fail to adequately adjust for subsequent information.44 The anchoring bias occurs because our mind appears to give a disproportionate amount of emphasis to the first information it receives.45 This is particularly important when organizations need to make strategic decisions. Individuals must often make initial judgements based upon gathered data and revise those judgements as new information comes in. However, because of anchoring bias the adjustments are typically insufficient. Anchors are widely used by people in professions where persuasion skills are important – such as advertising, management, politics, real estate and law. Consider the role of anchoring in negotiations. Any time a negotiation takes place, so does anchoring. When a prospective employer asks how much you made in your prior job, your answer typically anchors the employer’s offer. (Remember this when you negotiate your salary, but set the anchor only as high as you truthfully can.) The more precise your anchor, the smaller the adjustment. Some research suggests people think of making an adjustment after an anchor is set as rounding off a number: If you suggest a salary of €55,000, your boss will consider €50,000 to €60,000 a reasonable range for negotiation, but if you mention €55,650, your boss is more likely to consider €55,000 to €56,000 the range of likely values.46

Confirmation bias confirmation bias The tendency to seek out information that reaffirms past choices and to discount information that contradicts past judgements.

The rational decision-making process assumes that we objectively gather information. But we don’t. We selectively gather it. The confirmation bias represents a specific case of selective perception. We seek out information that reaffirms our past choices, and we discount information that contradicts them.47 We also tend to accept at face value information that confirms our preconceived views, while we are sceptical of information that challenges them. Therefore, the information we gather is typically biased towards supporting views we already hold. We even tend to seek sources most likely to tell us what we want to hear, and we give too much weight to supporting information and too little to contradictory. We are most prone to confirmation bias when we believe we have good information and strongly hold our opinions. Fortunately, those who feel there is a strong need to be accurate in making a decision are less prone to confirmation bias.

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Availability bias

availability bias The tendency for people to base their judgements on information that is readily available to them.

More people fear flying than fear driving in a car. But if flying on a commercial airline were as dangerous as driving, the equivalent of two 747s filled to capacity would crash every week, killing all aboard. Because the media give more attention to air accidents, we tend to overstate the risk of flying and understate the risk of driving. Availability bias is our tendency to base judgements on information readily available. Recent research indicates that a combination of readily available information and our previous direct experience with similar information is particularly influential to our decision making. Events that evoke emotions, that are particularly vivid, or that are more recent tend to be more available in our memory, leading us to overestimate the chances of unlikely events such as being in an air crash, suffering complications from medical treatment or getting fired.48 Availability bias can also explain why managers give more weight in performance appraisals to recent employee behaviours than to behaviours of six or nine months earlier, or why credit-rating agencies such as Moody’s or Standard & Poor’s may issue overly positive ratings by relying on information presented by debt issuers, who have an incentive to offer data favourable to their case.49

‘No one thinks they’re biased’ This statement is mostly true. Few of us are truly objective. When Wendelin Wiedeking, former chief executive of the Porsche sports car company, became Europe’s highest-paid businessman by earning an estimated €67m, the head of a rival German carmaker shook his head in disgust. ‘Everyone has the right to earn decent money. But €67m? That is obscene. It goes against every principle of social equality we have,’ the chief executive said. ‘I just cannot understand how he can justify earning so much more than the normal worker.’ Mr Wiedeking says his pay is fully justified: ‘I think when the company does well then those who have contributed should share in that,’ he said.50 This may be an extreme example. But it points to an alarming human tendency that may characterize all of us: not only do we think we’re objective when we evaluate ourselves or others, we don’t recognize our biases and lack of objec-

MYTH OR SCIENCE? tivity. As one author noted, ‘Much of what happens in the brain is not evident in the brain itself, and thus people are better at playing these sorts of tricks on themselves than at catching themselves in the act.’ A study of doctors, who are often lavished with gifts from pharmaceutical sales representatives, showed this tendency all too well. When asked about whether gifts might influence their prescribing practices, 84 per cent thought that their colleagues were influenced by gifts, but only 16 per cent thought that they were similarly influenced.51 It may well be that we think others are less truthful or objective than they really are and that we think we are more truthful or objective than we really are. The lesson? We should recognize the selfserving biases that contaminate our evaluations of others – and of ourselves.

Escalation of commitment escalation of commitment An increased commitment to a previous decision in spite of negative information.

Another distortion that creeps into decisions is a tendency to escalate commitment, often for increasingly non-rational reasons.52 Escalation of commitment refers to staying with a decision even when there is clear evidence that it’s wrong. For example, consider a friend who has been dating his girlfriend for several years. Although he admits to you that things aren’t going too well in the relationship, he says he is still going to marry her. His justification: ‘I have a lot invested in the relationship!’ When is escalation most likely to occur? Evidence indicates it occurs when individuals view themselves as responsible for the outcome. The fear of personal failure even biases the way we search for and evaluate information so that we choose only information that supports our dedication. We might, for example, weight opinions in favour of reinvestment as more credible than opinions for divestment.53 A recent meta-analysis revealed some interesting findings about what causes us to escalate our commitment after initial failure. First, it doesn’t appear to matter whether we chose the failing course of action or it was assigned to us – we feel responsible and escalate in either case. Second, the sharing of decision authority – such as when others review the choice we made – can lead to higher escalation because the original decision is more public (thus individuals feel a stronger

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need to justify the original decision by continuing). Finally, awareness of sunk costs a­ ssociated with the decision reduces escalation when individuals feel responsible (they now have an ‘escape clause’).54

Randomness error randomness error The tendency of individuals to believe that they can predict the outcome of random events.

Most of us like to think we have some control over our world. Our tendency to believe we can predict the outcome of random events is the randomness error. Decision making becomes impaired when we try to create meaning out of random events. One of the most serious impairments occurs when we turn imaginary patterns into super-­ stitions.55 These can be completely contrived (‘I never make important decisions on Friday the 13th’) or evolve from a certain pattern of behaviour that has been reinforced previously (tennis great Bjorn Borg used to grow a beard prior to the Wimbledon tournament because of previous success with a beard). Decisions based on random occurrences can handicap us when they affect our judgement or bias our major decisions.

Risk aversion

risk aversion The tendency to prefer a sure gain of a moderate amount over a riskier outcome, even if the riskier outcome might have a higher expected payoff.

Mathematically, we should find a 50–50 flip of the coin for €100 to be worth as much as a sure promise of €50. After all, the expected value of the gamble over a number of trials is €50. However, nearly everyone but committed gamblers would rather have the sure thing than a risky prospect.56 For many people, a 50–50 flip of a coin even for €200 might not be worth as much as a sure promise of €50, even though the gamble is mathematically worth twice as much! This tendency to prefer a sure thing over a risky outcome is risk aversion. Risk aversion has important implications. To offset the risks inherent in a commissionbased wage, companies pay commissioned employees considerably more than they do those on straight salaries. Risk-averse employees will stick with the established way of doing their jobs, rather than taking a chance on innovative methods. Sticking with a strategy that has worked in the past minimizes risk, but it will lead to stagnation. Ambitious people with power that can be taken away (most managers) appear to be especially risk averse, perhaps because they don’t want to lose on a gamble everything they’ve worked so hard to achieve.57 CEOs at risk of termination are exceptionally risk averse, even when a riskier investment strategy is in their firms’ best interests.58 Risk preference is sometimes reversed: people prefer to take chances when trying to prevent a negative outcome.59 They would rather take a 50–50 gamble on losing €100 than accept the certain loss of €50. Thus they will risk losing a lot of money at trial rather than settle out of court. Trying to cover up wrongdoing instead of admitting a mistake, despite the risk of truly catastrophic press coverage or even jail time, is another example. Stressful situations can make risk preferences stronger. People will more likely engage in risk-seeking behaviour for negative outcomes, and risk-averse behaviour for positive outcomes, when under stress.60

Hindsight bias hindsight bias The tendency to believe falsely, after an outcome of an event is actually known, that one would have accurately predicted that outcome.

The hindsight bias is the tendency to believe falsely, after the outcome of an event is actually known, that we’d have accurately predicted that outcome.61 When something happens and we have accurate feedback on the outcome, we seem to be pretty good at concluding that the outcome was relatively obvious. Perhaps after Germany won the 2014 football World Cup, your response was I told you so! When the global financial crisis hit, many businesspeople claimed, ‘I knew that would happen.’ We have to realize that things always seem much clearer when we know all the facts (or the connections among the facts). The hindsight bias reduces our ability to learn from the past. It permits us to think that we’re better at making predictions than we really are and can result in our being more confident about the accuracy of future decisions than we have a right to be. If, for instance, your actual predictive accuracy is only 40 per cent, but you think it’s 90 per cent, you’re likely to become falsely overconfident and less vigilant in questioning your predictive skills.

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Influences on decision making: individual differences and organizational constraints 7  Explain how individual differences and organizational constraints affect decision making.

We turn here to factors that influence how people make decisions and the degree to which they are susceptible to errors and biases. We discuss individual differences and organizational constraints.

Individual differences Decision making in practice is characterized by bounded rationality, common biases and errors and the use of intuition. In addition, individual differences create deviations from the rational model. In this section, we look at the differences in turn.

Personality Research on personality and decision making suggests personality influences our decisions. Let’s look at conscientiousness and self-esteem. Specific facets of conscientiousness – rather than the broad trait itself – may affect escalation of commitment,62 particularly the conscientiousness facets of achievement-striving and dutifulness. First, research suggested that achievement-striving people were more likely to escalate their commitment, whereas dutiful people were less likely. Why? Generally, achievement-oriented people hate to fail, so they escalate their commitment, hoping to forestall failure. Dutiful people, however, are more inclined to do what they see as best for the organization. Second, achievement-striving individuals appear more susceptible to hindsight bias, perhaps because they have a need to justify their actions.63 We don’t have evidence yet on whether dutiful people are immune to this bias. People with high self-esteem are strongly motivated to maintain it, so they use the ­self-serving bias to preserve it. They blame others for their failures while taking credit for successes.64

Gender Research on rumination offers insights into gender differences in decision making.65 ­Rumination refers to reflecting at length. In terms of decision making, it means overthinking problems. Twenty years of study finds women spend more time than men analysing the past, present and future. They’re more likely to overanalyse problems before making a decision and to rehash a decision once made. This can lead to careful consideration of problems and choices. However, it can make problems harder to solve, increase regret over past decisions and increase depression. Women are nearly twice as likely as men to develop depression.66 Why women ruminate more than men is not clear. One view is that parents encourage and reinforce the expression of sadness and anxiety more in girls than in boys. Another theory is that women, more than men, base their self-esteem and well-being on what others think of them. A third idea is that women are more empathetic and more affected by events in others’ lives, so they have more to ruminate about. By age 11, girls ruminate more than boys. But the gender difference seems to lessen with age. Differences are largest during young adulthood and smallest after age 65, when both men and women ruminate the least.67

Mental ability We know people with higher levels of mental ability are able to process information more quickly, solve problems more accurately and learn faster, so you might expect them also to be less susceptible to common decision errors. However, mental ability appears to help people avoid only some of these.68 Smart people are just as likely to fall prey to anchoring, overconfidence and escalation of commitment, probably because just being smart doesn’t alert

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you to the possibility you’re too confident or emotionally defensive. It’s not that intelligence never matters. Once warned about decision-making errors, more intelligent people learn more quickly to avoid them. They are also better able to avoid logical errors like false syllogisms or incorrect interpretation of data.

Cultural differences The rational model makes no acknowledgement of cultural differences, nor does the bulk of OB research literature on decision making. But Indonesians, for instance, don’t necessarily make decisions the same way New Zealanders do. Therefore, we need to recognize that the cultural background of a decision maker can significantly influence the selection of problems, the depth of analysis, the importance placed on logic and rationality, and whether organizational decisions should be made autocratically by an individual manager or collectively in groups.69 Cultures differ in time orientation, the importance of rationality, belief in the ability of people to solve problems and preference for collective decision making. Differences in time orientation help us understand why managers in Egypt make decisions at a much slower and more deliberate pace than their US counterparts. While rationality is valued in North America, that’s not true elsewhere. A North American manager might make an important decision intuitively but know it’s important to appear to proceed in a rational fashion because rationality is highly valued in the West. In countries such as Iran, where rationality is not as paramount as other factors, efforts to appear rational are not as necessary. Some cultures emphasize solving problems, while others focus on accepting situations as they are. The United Kingdom, Germany and Sweden, for example, fall into the first category whereas Thailand and Indonesia are examples of the second. Because problem-solving managers believe they can and should change situations to their benefit, German managers might identify a problem long before their Thai or Indonesian counterparts would choose to recognize it as such. Decision making by Japanese managers is much more group-oriented than in more individualistic countries such as Belgium or the Netherlands. The Japanese value conformity and cooperation, so before Japanese CEOs make an important decision, they collect a large amount of information to use in ­consensus-forming group decisions.

Organizational constraints Organizations can constrain decision makers, creating deviations from the rational model. For instance, managers shape their decisions to reflect the organization’s performance evaluation and reward system, to comply with the organization’s formal regulations and to meet organizationally imposed time constraints. Previous organizational decisions also act as precedents to constrain current decisions.

Performance evaluation Managers are strongly influenced in their decision making by the criteria on which they are evaluated. If a division manager believes the manufacturing plants under his responsibility are operating best when he hears nothing negative, we shouldn’t be surprised to find his plant managers spending a good part of their time ensuring that negative information doesn’t reach him.

Reward systems The organization’s reward system influences decision makers by suggesting to them what choices are preferable in terms of personal payoff. For example, if the organization rewards risk aversion, managers are more likely to make conservative decisions. From the 1930s through the mid-1980s, the world’s largest car manufacturer, General Motors, consistently gave out

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promotions and bonuses to managers who kept a low profile and avoided controversy. The result was that GM managers became very adept at dodging tough issues and passing controversial decisions on to committees.

Formal regulations Consider a shift manager at a fast food restaurant describing the constraints he faces on his job: ‘I’ve got rules and regulations covering almost every decision I make – from how to make the food to how often I need to clean the restrooms. My job doesn’t come with much freedom of choice.’ His situation is not unique. All but the smallest of organizations create rules and policies to programme decisions, which are intended to get individuals to act in the intended manner. And of course, in so doing, they limit the decision maker’s choices.

System-imposed time constraints Organizations impose deadlines on decisions. For instance, a report on new-product development may have to be ready for the executive committee to review by the first of the month. Almost all important decisions come with explicit deadlines. These conditions create time pressures on decision makers and often make it difficult, if not impossible, to gather all the information they might like to have before making a final choice.

Historical precedents Decisions aren’t made in a vacuum. They have a context. In fact, individual decisions are accurately characterized as points in a stream of decisions. Decisions made in the past are ghosts that continually haunt current choices – that is, commitments that have already been made constrain current options. It’s common knowledge that the largest determinant of the size of any given year’s budget is last year’s budget.70 Choices made today, therefore, are largely a result of choices made over the years.

What about ethics in decision making? 8  Contrast the three ethical decision criteria.

Ethical considerations should be an important criterion in organizational decision making. This is certainly more true today than at any time in the recent past, given the increasing scrutiny business is under to behave in an ethical and socially responsible way. In this section, we present three different ways to frame decisions ethically.

Three ethical decision criteria utilitarianism A system in which decisions are made to provide the greatest good for the greatest number.

whistle-blowers Individuals who report unethical practices by their employer to outsiders.

An individual can use three different criteria in making ethical choices.71 The first is the ­utilitarian criterion, in which decisions are made solely on the basis of their outcomes or consequences. The goal of utilitarianism is to provide the greatest good for the greatest number. This view tends to dominate business decision making. It is consistent with goals such as efficiency, productivity and high profits. By maximizing profits, for instance, a business executive can argue that he is securing the greatest good for the greatest number – as he hands out dismissal notices to 15 per cent of his employees. Another ethical criterion is to focus on rights. This calls on individuals to make decisions consistent with fundamental liberties and privileges, as set forth in documents such as the European Convention on Human Rights. An emphasis on rights in decision making means respecting and protecting the basic rights of individuals, such as the right to privacy, to free speech and to due process. For instance, this criterion protects whistle-blowers when they reveal unethical practices by their organization to the press or government agencies, on the grounds of their right to free speech.

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behavioural ethics Analysing how people actually behave when confronted with ethical dilemmas.

A third criterion is to focus on justice. This requires individuals to impose and enforce rules fairly and impartially so that there is an equitable distribution of benefits and costs. Union members typically favour this view. It justifies paying people the same wage for a given job, regardless of performance differences, and using seniority as the primary determination in making layoff decisions. Each of these criteria has advantages and liabilities. A focus on utilitarianism promotes efficiency and productivity, but it can result in ignoring the rights of some individuals, particularly those with minority representation in the organization. The use of rights as a criterion protects individuals from injury and is consistent with freedom and privacy, but it can create an overly legalistic work environment that hinders productivity and efficiency. A focus on justice protects the interests of the underrepresented and less powerful, but it can encourage a sense of entitlement that reduces risk taking, innovation and productivity. Decision makers, particularly in for-profit organizations, tend to feel safe and comfortable when they use utilitarianism. A lot of questionable actions can be justified when framed as being in the best interests of ‘the organization’ and shareholders. But many critics of business decision makers argue that this perspective needs to change.72 Increased concern in society about individual rights and social justice suggests the need for managers to develop ethical standards based on non-­ utilitarian criteria. This presents a solid challenge to today’s managers because making decisions using criteria such as individual rights and social justice involves far more ambiguities than using utilitarian criteria such as effects on efficiency and profits. This helps to explain why managers are increasingly criticized for their actions. Raising prices, selling products with questionable effects on consumer health, closing down inefficient plants, laying off large numbers of employees, moving production overseas to cut costs and similar decisions can be justified in utilitarian terms. But that may no longer be the single criterion by which good decisions should be judged. Increasingly, researchers are turning to behavioural ethics – an area of study that analyses how people behave when confronted with ethical dilemmas. Their research tells us that while ethical standards exist collectively (society and organizations) and individually (personal ethics), individuals do not always follow ethical standards promulgated by their organizations, and we sometimes violate our own standards. Our ethical behaviour varies widely from one situation to the next. How might we increase ethical decision-making in organizations? First, sociologist James Q. Wilson promulgated the broken windows theory – the idea that decayed and disorderly urban environments may facilitate criminal behaviour because they signal antisocial norms. Although controversial, the theory does fit with behavioural ethics research showing that seemingly superficial aspects of the environment – such as lighting, outward displays of wealth and status and cleanliness – can affect ethical behaviour in organizations.73 Managers must first realize that ethical behaviour can be affected by signals; for example, if signs of status and money are everywhere, an employee may perceive those, rather than ethical standards, to be of the highest importance. Second, managers should encourage conversations about moral issues; they may serve as a reminder and increase ethical decision making. One study found that simply asking business school students to think of an ethical situation had powerful effects when they were making ethical choices later.74 Finally, we should be aware of our own moral ‘blind spots’ – the tendency to see ourselves as more moral than we are and others as less moral than they are. Although smart people can be just as susceptible to moral blind spots as others, an environment that encourages open discussions and does not penalize people for coming forward is key to overcoming blind spots and increasing the ethicality of decision making.75 Behavioural ethics research stresses the importance of culture to ethical decision making. There are few global standards for ethical decision making,76 as contrasts between Asia and the West illustrate. What is ethical in one culture may be unethical in another. For example, because bribery is more common in countries such as China, a Spanish employee working in China might face a dilemma: should I pay a bribe to secure business if it is an accepted part of that country’s culture? Although some companies like IBM explicitly address this issue, many do not. Without sensitivity to cultural differences in defining ethical conduct, organizations may encourage unethical conduct without even knowing it.

Creativity, creative decision making and innovation in organizations   133

Creativity, creative decision making and innovation in organizations 9  Define creativity and Although the rational decision-making model will often improve decisions, a decision maker describe the three-stage also needs creativity, the ability to produce novel and useful ideas. These ideas are different from what’s been done before but are appropriate for the problem. model of creativity

Creativity allows the decision maker to fully appraise and understand problems, including seeing problems others can’t see. For this reason, Business Schools now routinely teach creative thinking and organizations offer training in this area, such as the French cosmetics company L’Oréal, which puts its managers through creative exercises such as cooking or making music. Although all aspects of organizational behaviour have complexities, that is especially true for creativity. To simplify, Figure 5.4 provides a three-stage model of creativity in organizations. The core of the model is creative behaviour, which has both causes (predictors of creative behaviour) and effects (outcomes of creative behaviour). In this section, we discuss the three stages of creativity, starting with the centre, creative behaviour.

creativity The ability to produce novel and useful ideas. three-stage model of creativity The proposition that creativity involves three stages: causes (creative potential and creative environment), creative behaviour, and creative outcomes (innovation).

Creative behaviour Creative behaviour occurs in four steps, each of which leads to the next: 1. Problem formulation. Any act of creativity begins with a problem that the behaviour is

designed to solve. Thus, problem formulation is defined as the stage of creative behaviour in which we identify a problem or opportunity that requires a solution as yet unknown. For example, artist/entrepreneur Marshall Carbee and businessperson John Bennett founded Eco Safety Products after discovering that even paints declared safe by the US Environmental Protection Agency (EPA) emit hazardous chemical compounds. Thus, Bennett’s development of artist-safe soy-based paint began with identifying a safety problem with paints currently on the market.77

Used with permission of WikiFoods, Inc (a unit of Quantum Designs, LLC)

problem formulation The stage of creative behaviour which involved identifying problem or opportunity that requires a solution that is as yet unknown.

With intense global competition, the organizations (or entrepreneurs) that survive are those that can constantly come up with new products, services and/or better ways of operating. These innovations are developed by creative thinking. Shown here is a product that topped Business Insider’s list of innovations that will change the world – edible food packaging that will remove the need for plastic waste. Source: Business Insider, ‘30 innovations that will change the world’ http://www.businessinsider.com/30-game-changing-innovations-2012-8

134  5 Perception, individual decision making and creativity Causes of creative behaviour Creative potential

Creative environment

Creative behaviour Problem formulation

Information gathering

Idea generation

Idea evaluation

Creative outcomes (Innovation) Novelty

Usefulness

Figure 5.4  Three-stage model of creativity in organizations 2. Information gathering. Given a problem, the solution is rarely directly at hand. We need information gathering The stage of creative behaviour when possible solutions to a problem incubate in individual’s mind. idea generation The process of creative behaviour that involves developing possible solutions to a problem from relevant information and knowledge. idea evaluation The process of creative behaviour involving the evaluation of potential solutions to problems to identify the best one.

time to learn more and to process that learning. Thus, information gathering is the stage of creative behaviour when possible solutions to a problem incubate in an individual’s mind. Niklas Laninge of Hoa’s Tool Shop, a Stockholm-based company that helps organizations become more innovative, argues that creative information gathering means thinking beyond usual routines and comfort zones. For example, have lunch with someone outside your field to discuss the problem. ‘It’s so easy, and you’re forced to speak about your business and the things that you want to accomplish in new terms. You can’t use buzzwords because people don’t know what you mean,’ Laninge says.78 3. Idea generation. Once we have collected the relevant information, it is time to translate

knowledge into ideas. Thus, idea generation is the process of creative behaviour in which we develop possible solutions to a problem from relevant information and knowledge. Increasingly, idea generation is collaborative. For example, when NASA engineers developed the idea for landing a spacecraft on Mars, they did so collaboratively. Before coming up with the Curiosity – an SUV-sized rover that lands on Mars from a sky crane – the team spent three days scribbling potential ideas on whiteboards.79 4. Idea evaluation. Finally, it’s time to choose from the ideas we have generated. Thus, idea evaluation is the process of creative behaviour in which we evaluate potential solutions to

identify the best one. Generally, you want those who evaluate ideas to be different from those who generate them, to eliminate the obvious biases.

EMPLOYABILITY AND CREATIVITY Oxford Economics conducted a research report examining the workforce needs of the future. The report begins, ‘Everywhere across the globe, wrenching business changes are touching every firm and industry. Profound shifts in the global marketplace are ushering in a new era of complexity, uncertainty and change for companies. The rise of the internet and related technology has accelerated these market shifts, up-ending business strategies, models and processes along the way.’

One conclusion of the research was that creativity will be one of the most sought after skills in the workplace in the next 5–10 years and the quote above points to the reason why. Creative thinkers come up with novel ways of thinking about things that add value. They don’t just accept what has been done before. In an era of profound change, the old ways of doing things become outdated very quickly. Source: Oxford Economics, Global Talent 2021: How the new geography of talent will transform human resource strategies (Oxford Economics, 2012).

Causes of creative behaviour Having defined creative behaviour, the main stage in the three-stage model, we now look back to the causes of creativity: creative potential and creative environment.

Creative potential Is there such a thing as a creative personality? Indeed. While creative genius – whether in science (Albert Einstein), art (Pablo Picasso), or business (Steve Jobs) – is scarce, most people

Creativity, creative decision making and innovation in organizations   135

have some of the characteristics shared by exceptionally creative people. The more of these characteristics we have, the higher our creative potential. Intelligence is related to creativity. Smart people are more creative because they are better at solving complex problems. However, intelligent individuals may also be more creative because they have greater ‘working memory’, that is, they can recall more information that is related to the task at hand.80 The Big Five personality traits of openness to experience (see Chapter 4) correlates with creativity, probably because open individuals are less conformist in action and more divergent in thinking.81 Other traits of creative people include proactive personality, self-confidence, risk taking, tolerance for ambiguity and perseverance.82 Expertise is the foundation for all creative work and thus is the single-most important predictor of creative potential. Film writer, producer and director Quentin Tarantino spent his youth working in a video rental store, where he built up an encyclopaedic knowledge of movies. The potential for creativity is enhanced when individuals have abilities, knowledge, proficiencies and similar expertise to their field of endeavour. You wouldn’t expect someone with minimal knowledge of programming to be very creative as a software engineer.

Creative environment Most of us have creative potential we can learn to apply, but as important as creative potential is, by itself it is not enough. We need to be in an environment where creative potential can be realized. What environmental factors affect whether creative potential translates into creative behaviours? First and perhaps most important is motivation. If you aren’t motivated to be creative, it is unlikely you will be. A review of 26 studies revealed that intrinsic motivation, or the desire to work on something because it’s interesting, exciting, satisfying and challenging (discussed in more detail in the next chapter), correlates fairly strongly with creative outcomes. This link is true regardless of whether we are talking about student creativity or employee creativity.83 It is also valuable to work in an environment that rewards and recognizes creative work. The organization should foster the free flow of ideas, including providing fair and constructive judgement. Freedom from excessive rules encourages creativity; employees should have the freedom to decide what work is to be done and how to do it. One study of 385 employees working for several drug companies in China revealed that both structural empowerment (in which the structure of the work unit allows sufficient employee freedom) and psychological empowerment (which lets the individual feel personally empowered) were related to employee creativity.84 What is the role of culture? A recent nation-level study suggests that countries scoring high on Hofstede’s culture dimension of individuality (discussed in Chapter 4) are more creative.85 Western countries like Spain, Italy and Belgium score high on individuality, and South American and Eastern countries like China, Colombia and Pakistan score low; does this mean Western cultures are more creative? Some evidence suggests this is true. One study compared the creative projects of German and Chinese college students, some of whom were studying in their homeland and some of whom were studying abroad. An independent panel of Chinese and German judges determined that the German students were most creative and that Asian German students were more creative than domestic Chinese students. This suggested that the German culture was more creative.86 However, even if some cultures are more creative on average, there is always strong variation within cultures. Put another way, there are millions of Chinese more creative than their UK counterparts. Good leadership matters to creativity too. A recent study of more than 100 teams working in a large bank revealed that when the leader behaved in a punitive, unsupportive manner, the teams were less creative.87 On the other hand, when leaders are encouraging in tone, run their units in a transparent fashion and encourage the development of their employees, the individuals they supervise are more creative.88 More work today is being done in teams, and many people believe diversity will increase team creativity (as we will learn in Chapter 10). Past research, unfortunately, has suggested that diverse teams are not more creative. More recently, however, one study of Dutch teams revealed that when team members were explicitly asked to understand and consider the point of view of the other team members (an exercise called perspective-taking), diverse teams were

136  5 Perception, individual decision making and creativity

more creative than those with less diversity.89 A study of 68 Chinese teams reported that diversity was positively related to team creativity only when the team’s leader was inspirational and instilled members with confidence.90 Another study in a multinational drug company found that teams from diverse business functions were more creative when they shared knowledge of each other’s areas of expertise.91 Collectively, these studies show that diverse teams can be more creative, but only under certain conditions.

Creative outcomes (innovation) The final stage in our model of creativity is the outcome. Creative behaviour does not always produce a creative or innovative outcome. An employee might generate a creative idea and never share it. Management might reject a creative solution. Teams might squash creative behaviours by isolating those who propose different ideas. One study showed that most people have a bias against accepting creative ideas because ideas create uncertainty. When people feel uncertain, their ability to see any idea as creative is blocked.92 We can define creative outcomes as ideas or solutions judged to be novel and useful by relevant stakeholders. Novelty itself does not generate a creative outcome if it isn’t useful. Thus, ‘off-the-wall’ solutions are creative only if they help solve the problem. The usefulness of the solution might be self-evident (the iPad), or it might be considered successful by stakeholders before the actual success can be known.93 An organization may harvest many creative ideas from its employees and call itself innovative. However, as Theodore Levitt reputedly stated, ‘Ideas are useless unless used.’ Soft skills help translate ideas into results. One researcher found that among employees of a large agribusiness company, creative ideas were most likely to be implemented when the individual was motivated to translate the idea into practice – and when he or she had strong networking ability.94 Another important factor is organizational climate; a study of health care teams found that team creativity translated into innovation only when the climate actively supported innovation.95 These studies highlight an important fact: creative ideas do not implement themselves; translating them into creative outcomes is a social process that requires utilizing other concepts addressed in this book, including power and politics, leadership and motivation.

SUMMARY Individuals base their behaviour not on the way their external environment actually is, but rather on the way they see it or believe it to be. An understanding of the way people make decisions can help us explain and predict behaviour, but few important decisions are simple or unambiguous enough for the rational model’s assumptions to apply. We find individuals looking for solutions that satisfice rather than optimize, injecting biases and prejudices into the decision process and relying on intuition. Managers should encourage creativity in employees and teams to create a route to innovative decision making.

IMPLICATIONS FOR MANAGERS ●

●

To influence productivity, assess how your employees perceive their jobs. Clue into employee absenteeism, turnover and job satisfaction levels for indicators of their perception. Discuss their perceptions about fairness, compensation and other abstract measures with them to clear up any perceptual distortions. Adjust your decision-making approach to the national culture you’re operating in and to the criteria your organization values. If you’re in a country that doesn’t value rationality, don’t

QUESTIONS FOR REVIEW   137

feel compelled to follow the decision-making model or to try to make your decisions appear rational. Adjust your decision approach to ensure compatibility with the organizational culture. ● ●

●

Be aware of biases. Then try to minimize their impact. Figure 5.3 offers some suggestions. Combine rational analysis with intuition. These are not conflicting approaches to decision making. By using both, you can actually improve your decision-making effectiveness. Try to enhance your creativity. Actively look for novel solutions to problems, attempt to see problems in new ways, use analogies and hire creative talent. Try to remove work and organizational barriers that might impede your creativity.

When in doubt, do!

POINT/COUNTERPOINT

POINT Life is full of decisions and choices. The real question is not ‘To be, or not to be’, but rather ‘To do, or not to do?’ For example, should I confront my lecturer about my course grade? Should I buy a new car? Should I accept a new job? Should I choose this major? Very often, we are unsure of our decision. In such cases, it is almost always better to choose action over inaction. In life, people more often regret inaction than action. Take the following simple example: State Act

Rain

Shine

Carry umbrella Dry (except your feet!)

Inconvenience

Don’t carry umbrella

Unqualified bliss

Miserable drenching

Say you carry an umbrella and it doesn’t rain, or you don’t carry an umbrella and it does rain. In which situation are you worse off? Would you rather experience the mild inconvenience of the extra weight of the umbrella or get drenched? Chances are you’ll regret inaction more than action. Research shows that after we make a decision, we regret inaction more than action. Although we often regret actions in their immediate aftermath, over time, regrets over actions decline markedly, whereas regrets over missed opportunities increase. For example, you finally decide to take a trip to New Zealand. You have an amazing time, but a few weeks after you get back, your credit card bill arrives – and it isn’t pretty. Unfortunately, you have to work overtime and miss a few dinners out with friends to pay off the bills. A few months down the road, however, you decide to reminisce by looking through your photos from the trip, and you can’t imagine not having gone. So, when in doubt, just do!

COUNTERPOINT It’s just silly to think that when in doubt, you should always act. People will undoubtedly make mistakes following such simple advice. For example, you’re out of work, but you still decide to purchase your dream car – a BMW, fully loaded. Not the smartest idea. So why is the motto ‘just do it’ dangerous? Because there are two types of regrets: hot regret, in which an individual kicks themselves for having caused something bad, and wistful regret, in which they fantasize about how else things might have turned out. The danger is that actions are more likely to lead to anguish or hot regret, and inaction is more likely to

lead to wistful regret. So the bottom line is that we can’t apply simple rules such as ‘just do it’ to important decisions.

Source: Based on T. Gilovich, V. H. Medvec and D. Kahneman, ‘Varieties of regret: a debate and partial resolution’, Psychological Review, 105 (1998), pp. 602–5; see also M. Tsiros and V. Mittal, ‘Regret: a model of its antecedents and consequences in consumer decision making’, Journal of Consumer Research, March (2000), pp. 401–17.

QUESTIONS FOR REVIEW 1. What is perception, and what factors influence our

perception? 2. What is attribution theory? What are the three deter-

minants of attribution? What are its implications for explaining organizational behaviour?

3. What shortcuts do people frequently use in making

judgements about others? 4. What is the link between perception and decision

making? How does one affect the other?

138  5 Perception, individual decision making and creativity

5. What is the rational model of decision making? How is

it different from bounded rationality and intuition? 6. What are some of the common decision biases or

errors that people make?

8. What are the three ethical decision criteria and how do

they differ? 9. What is creativity and what is the three-stage model of

creativity?

7. How do individual differences and organizational con-

straints influence decision making?

EXPERIENTIAL EXERCISE DECISION MAKING Consider the two following dilemmas: 1. You are a buyer for a global organization that produces

personal care products. The company is a major consumer of palm oil, the production of which has been implicated as having a substantial effect on the natural environment. You want to discontinue the use of palm oil and look for more environmentally friendly alternatives. However, profits from palm oil are crucial for developing countries to fight poverty and cancelling palm oil contracts would have drastic consequences for these suppliers and the communities around them. Will you cancel the contracts or not? 2. You are a manager of a reality TV production

company. There has been a small amount of verbal conflict between participants of the show. Producers

want you to purposely highlight the material and, with editing, to make the conflict look as if it was targeted at a disabled person, to increase the exposure of the show. Will you do it?

Discuss: 1. Was your final decision based on intuition or ration-

ality? 2. What biases are evident in the decisions you reached? 3. How did your decisions compare with the rest of the

class? Why do you think people made different decisions (assuming that they did)? 4. How might you improve your decision making in the

future?

ETHICAL DILEMMA FIVE ETHICAL DECISIONS: WHAT WOULD YOU DO? How would you respond to each of the following ­situations?

Do you have an obligation to tell your friend you have listed your CD on eBay?

1. Assume that you’re a middle manager in a company

3. Your company’s policy on reimbursement for meals

with about 1,000 employees. You’re negotiating a contract with a very large potential customer whose representative has hinted that you could almost certainly be assured of getting his business if you gave him and his wife an all-expenses-paid cruise to the Caribbean. You know the representative’s employer wouldn’t approve of such a ‘payoff’, but you have the discretion to authorize such an expenditure. What would you do?

while travelling on business is that you will be repaid for your out-of-pocket costs, not to exceed €80 per day. You don’t need receipts for these expenses – the company will take your word. When travelling, you tend to eat at fast-food places and rarely spend in excess of €20 a day. Most of your colleagues put in reimbursement requests in the range of €55 to €60 per day, regardless of what their actual expenses are. How much would you request for your meal reimbur­sements?

2. You have an autographed Coldplay CD. You have put

4. You work for a company that manufactures, markets

the CD up for sale on eBay. So far, the highest bid is €74.50. A friend has offered you €100 for the CD, commenting that he could get €150 for the CD on eBay in a year. You know this is highly unlikely. Should you sell your friend the CD for what he offered (€100)?

and distributes various products, including nutritional supplements, to health food and nutrition stores. One of the company’s best-selling products is a herbal supplement called Rosalife. The company advertises that Rosalife ‘achieves all the gains of ­

CASE INCIDENT 1   139

estrogen hormone replacement therapy without any of the side effects’. One day, a research assistant stops by your office with some troubling information. She tells you that while researching another product, she came across a recent study that suggests Rosalife does not offer the benefits the company claims it does. You show this study to your supervisor, who says, ‘We’re not responsible for validating herbal products, and nobody’s hurt anyway.’ Indeed, you know this is not the case. What is your ethical responsibility?

5. Assume that you’re the manager at a gaming company,

and you’re responsible for hiring a group to outsource the production of a highly anticipated new game. Because your company is a giant in the industry, numerous companies are trying to get the bid. One of them offers you some kickbacks if you give that firm the bid, but ultimately, it is up to your bosses to decide on the company. You don’t mention the incentive, but you push upper management to give the bid to the company that offered you the kickback. Is withholding the truth as bad as lying? Why or why not?

CASE INCIDENT 1

The games industry – where are all the women? by Emma Jacobs Only 22 per cent of people working in the games industry are women, according to research published by the International Game Developers Association. But according to the Entertainment Software Association, the number of women playing games is almost equal to men. The disparity has been attributed to a mix of factors: girls are discouraged to pursue a career in video games; a poor take-up of science, tech, engineering and maths subjects by young women; and sexism. The issue was highlighted by the Gamergate controversy, in which female games developers were harassed online for speaking out against sexism in games. Industry initiatives hope to bring more women into the sector. In the UK, Women in Games WIGJ is launching a mentoring programme with mentors from the likes of King, Sony and Microsoft. Below two women speak of their experiences in the games industry:

Rhianna Pratchett, games writer Rhianna Pratchett has been a gamer since the age of six. Her path into writing for games was through games journalism, initially reviewing for Minx, a young women’s ­magazine. She moved into games, including work on three titles with female protagonists – Heavenly Sword, Mirror’s Edge and the reboot of Tomb Raider. Working in the industry, she says, has been ‘hard’ not because of gender but ‘because traditionally games haven’t been particularly story-led’. This is changing, she says. ­Ultimately, diversity of the workforce leads to greater c ­ reativity, she argues. Ms Pratchett would prefer to focus on the positive aspects. ‘Highlighting what is achievable and

desirable is so important in showing young women the ­opportunities.’ It was one reason she created the hashtag #1reasontobe, highlighting positives for women in the industry, as a response to #1reasonwhy, which highlighted sexism. It helped spawn a Game Developer Conference panel, showcasing prominent industry women. While it is important to show the darker corners of the industry, ‘it’s equally important to show what’s worth fighting for’.

Divinia Knowles, president and chief financial officer, Mind Candy After a career in interior design and antiques, the move to Mind Candy, developer of Moshi Monsters, was a ‘shock’, says Ms Knowles. ‘It’s a heavily maledominated industry and there were many times when I was the only woman in the room. At the board level, there are very few women. There are very few female senior developers in the industry and Mind Candy.’ Young women do not realise that engineering and computer science can lead to ‘very creative careers’, she says. Mobile and casual gaming is bringing more women in as players, she says. ‘That is reflected in the diversity of the games in the app store.’ She says women are often the primary caregivers for children so want games that are ‘snackable and fit in with all the other things they are doing’. Playing Candy Crush in short bursts might prove more attractive than devoting an afternoon to Call of Duty, though women do that too. The games marketplace is competitive, she says, which means it is even more important that creators listen to their audience and include employees of diverse backgrounds. ‘Different perspectives can create something magical.’

Source: Adapted from Jacobs, E. (2015) A gender agenda for a diversifying gaming industry, FT.com, 04/06/2015. © The Financial Times Limited. All Rights Reserved. Pearson Education Ltd. is responsible for providing this adaptation of the original article.

140  5 Perception, individual decision making and creativity

Questions 1. Were you surprised by the research that claims the number

3. The contributors talk about more women in the games

of women playing games is almost equal to men? If so, was there a perceptual short cut at work?

industry leading to greater creativity. What examples of innovation are referred to in the case that have been driven by women?

2. The gaming industry is male dominated. Do you think this has been partly caused by male and/or female perceptions of the industry?

The worst business decisions? Jeremy Kourdi writes that the worst business decisions are memorable because of their consequences, the ease with which disaster could have been avoided and the tendency for mistake to pile on mistake. These aren’t accidents or unfortunate incidents but premeditated decisions that resulted in disaster. The following all made Kourdi’s ten worst business decisions list:

IBM One of the worst decisions occurred when IBM ceded dominance of the software market to Microsoft for €60,000, paying Bill Gates a fee for his operating system and failing to tie him sufficiently to their firm. IBM did not appreciate the potential value of the software market, and were overconfident that they could dominate the hardware market. Gates realized that if Microsoft’s operating system was linked with IBM, it would become the industry standard, with the opportunity to sell compatible software to IBM clones. He was right, with stunning results for Microsoft. The lessons for IBM are clear. Never buy in haste and always think of the future. Decisions set precedents and have consequences.

Dot.com boom Thousands of flawed decisions were made during the dot.com boom. Issues that would normally affect commercial decisions were overwhelmed by a belief that virtually anything would find a profitable market online. The lessons are clear: common sense matters, don’t be afraid to test assumptions and don’t be seduced by hype, technology or the promise of the new.

Marks & Spencer Marks & Spencer’s decision not to advertise or even to appoint a marketing director came to characterize its arrogance, complacency, inflexibility and lack of market focus. It was a shocking decision, thankfully now corrected. For years, the firm believed that its culture was geared to the customer. This may have been true for a while, but it could not last forever. The lessons? Avoid complacency, dare to be different and recognize the inevitable: if it ain’t broke, then perhaps it should be.

New Coke Coca-Cola discovered it was losing out to rival Pepsi so it introduced New Coke. Unfortunately, millions of Americans

CASE INCIDENT 2 decided they hated New Coke and responded to the change in formula as if the organization had killed off a beloved member of the family. The lessons from Coke’s mistake are avoid basing decisions on biased research, stay close to customers and know what makes you or your product special.

Rebranding The rebranding gaffe has been made by PricewaterhouseCoopers, which renamed its consulting business Monday, and Andersen Consulting, which switched to Accenture. These choices reinforced perceptions of consultants as lacking substance. Other examples are British Airways, when under Robert Ayling, rebranding its fleet with ethnic designs and Royal Mail plumping for Consignia. If an option seems too clever to be true, it probably is. Try to see things from others’ viewpoints.

Enron Enron’s decision to resort to financial chicanery and fraud highlights the fact that for decisions to work well, they need to inspire trust. By deciding to go for an illegal, unethical solution to the pressures of rising shareholder expectations, senior executives lost everything. The decisions that work best are honest and compelling. They engage people and gather their own momentum. According to Kourdi, for every disastrous decision there are many great decisions made every day. While executives should accept that decisions could always be better, what matters is that they make progress, achieve their objectives – and avoid disaster.

Questions 1. For each example, do you think the decision was based more on rational decision making, bounded rationality or intuition?

2. Analyse each example and decide on which biases may have led to the decision.

3. How could the decisions have been improved? Source: J. Kourdi, Business Strategy: A Guide to Effective Decision Making, 1st edn (London: Profile Books, 2003).

EndNotes   141

ENDNOTES   1 H. H. Kelley, ‘Attribution in social interaction’, in E. E. Jones, D. Kanouse, H. H. Kelley, K. E. Nisbett, S. Valins and B. Weiner (eds), Attribution: Perceiving the Causes of Behavior (Morristown, NJ: General Learning Press, 1972).   2 See L. Ross, ‘The intuitive psychologist and his shortcomings’, in L. Berkowitz (ed.), Advances in Experimental Social Psychology, vol. 10 (Orlando, FL: Academic Press, 1977), pp. 174–220; and A. G. Miller and T. Lawson, ‘The effect of an informational option on the fundamental attribution error’, Personality and Social Psychology Bulletin, June 1989, pp. 194–204.   3 See, for instance, N. Epley and D. Dunning, ‘Feeling “holier than thou”: are self-serving assessments produced by errors in self- or social prediction?’, Journal of Personality and Social Psychology, 76, 6 (2000), pp. 861–75; M. Goerke, J. Moller, S. Schulz-Hardt, U. Napiersky and D. Frey, ‘“It’s not my fault – but only I can change it”: counterfactual and prefactual thoughts of managers’, Journal of Applied Psychology, 89, 2 (2004), pp. 279–92; and E. G. Hepper, R. H. Gramzow and C. Sedikides, ‘Individual differences in self-enhancement and self-protection strategies: an integrative analysis’, Journal of Personality, 78, 2 (2010), pp. 781–814.   4 See D. M. Cain and A. S. Little, ‘Everyone’s a little bit biased (even physicians)’, Journal of the American Medical Association, 299, 24 (2008), pp. 2893–5.   5 See, for instance, A. H. Mezulis, L. Y. Abramson, J. S. Hyde and B. L. Hankin, ‘Is there a universal positivity bias in attributions: a meta-analytic review of individual, developmental, and cultural differences in the self-serving attributional bias’, Psychological Bulletin, 130, 5 (2004), pp. 711–47; C. F. Falk, S. J. Heine, M. Yuki and K. Takemura, ‘Why do Westerners self-enhance more than East Asians?’, European Journal of Personality, 23, 3 (2009), pp. 183–203; and F. F. T. Chiang and T. A. Birtch, ‘Examining the perceived causes of successful employee performance: an East– West comparison’, International Journal of Human Resource Management, 18, 2 (2007), pp. 232–48.  6 S. Nam, ‘Cultural and managerial attributions for group performance’, unpublished doctoral dissertation, University of Oregon. Cited in R. M. Steers, S. J. Bischoff and L. H. Higgins, ‘Cross-cultural management research’, Journal of Management Inquiry, December 1992, pp. 325–6.   7 T. Menon, M. W. Morris, C. Chiu and Y. Y. Hong, ‘Culture and the construal of agency: attribution to individual versus group dispositions’, Journal of Personality and Social Psychology, 76, 5 (1999), pp. 701–17; and R. Friedman, W. Liu, C. C. Chen and S.-C. S. Chi, ‘Causal attribution for interfirm contract violation: a comparative study of Chinese and American commercial arbitrators’, Journal of Applied Psychology, 92, 3 (2007), pp. 856–64.   8 J. Spencer-Rodgers, M. J. Williams, D. L. Hamilton, K. Peng and L. Wang, ‘Culture and group perception: dispositional and stereotypic inferences about novel and national groups’, Journal of Personality and Social Psychology, 93, 4 (2007), pp. 525–43.   9 J. D. Brown, ‘Across the (not so) great divide: cultural similarities in self-evaluative processes’, Social and Personality Psychology Compass, 4, 5 (2010), pp. 318–30. 10 A. Zhang, C. Reyna, Z. Qian and G. Yu, ‘Interpersonal attributions of responsibility in the Chinese workplace: a test of Western models in a collectivistic context’, Journal of Applied Social Psychology, 38, 9 (2008), pp. 2361–77; and A. Zhang, F. Xia and C. Li, ‘The antecedents of help giving in Chinese culture: attribution, judgment of responsibility, expectation

change and the reaction of affect’, Social Behavior and Personality, 35, 1 (2007), pp. 135–42. 11 D. C. Dearborn and H. A. Simon, ‘Selective perception: a note on the departmental identification of executives’, Sociometry, June 1958, pp. 140–44. Some of the conclusions in this classic study have recently been challenged in J. Walsh, ‘Selectivity and selective perception: an investigation of managers’ belief structures and information processing’, Academy of Management Journal, December 1988, pp. 873–96; M. J. Waller, G. Huber and W. H. Glick, ‘Functional background as a determinant of executives’ selective perception’, Academy of Management Journal, August 1995, pp. 943–74; and J. M. Beyer, P. Chattopadhyay, E. George, W. H. Glick, D. T. Ogilvie and D. Pugliese, ‘The selective perception of managers revisited’, Academy of Management Journal, June 1997, pp. 716–37. 12 See P. Rosenzweig, The Halo Effect (New York: The Free Press, 2007); I. Dennis, ‘Halo effects in grading student projects’, Journal of Applied Psychology, 92, 4 (2007), pp. 1169–76; C. E. Naquin and R. O. Tynan, ‘The team halo effect: why teams are not blamed for their failures’, Journal of Applied Psychology, 88, 2 (2003), pp. 332–40; and T. M. Bechger, G. Maris and Y. P. Hsiao, ‘Detecting halo effects in performance-based evaluations’, Applied Psychological Measurement, 34, 8 (2010), pp. 607–19. 13 P. Burrows, ‘HP’s Carly Fiorina: the boss’, BusinessWeek, 2 August 1999; J. D. Markman, ‘Lessons of Carly Fiorina’s fall’, TheStreet.com, 10 February 2005; and C. Edwards, ‘Where Fiorina went wrong,’ BusinessWeek, 9 February 2005. 14 S. E. Asch, ‘Forming impressions of personality’, Journal of Abnormal and Social Psychology, July 1946, pp. 258–90. 15 J. L. Hilton and W. von Hippel, ‘Stereotypes’, in J. T. Spence, J. M. Darley and D. J. Foss (eds), Annual Review of Psychology, vol. 47 (Palo Alto, CA: Annual Reviews Inc., 1996), pp. 237–71. 16 See, for example, C. Ostroff and L. E. Atwater, ‘Does whom you work with matter? Effects of referent group gender and age composition on managers’ compensation’, Journal of Applied Psychology, 88, 4 (2003), pp. 725–40; M. E. Heilman, A. S. Wallen, D. Fuchs and M. M. Tamkins, ‘Penalties for success: reactions to women who succeed at male gender-typed tasks’, Journal of Applied Psychology, 89, 3 (2004), pp. 416–27; V. K. Gupta, D. B. Turban and N. M. Bhawe, ‘The effect of gender stereotype activation on entrepreneurial intentions’, Journal of Applied Psychology, 93, 5 (2008), pp. 1053–61; and R. A. ­Posthuma and M. A. Campion, ‘Age stereotypes in the workplace: common stereotypes, moderators, and future research directions’, Journal of Management, 35, 1 (2009), pp. 158–88. 17 See, for example, N. Dasgupta, D. DeSteno, L. A. Williams and M. Hunsinger, ‘Fanning the flames of prejudice: the influence of specific incidental emotions on implicit prejudice’, Emotion, 9, 4 (2009), pp. 585–91; and J. C. Ziegert and P. C. Hanges, ‘Strong rebuttal for weak criticisms: reply to Blanton et al. (2009)’, Journal of Applied Psychology, 94, 3 (2009), pp. 590–97. 18 J. L. Eberhardt, P. G. Davies, V. J. Purdie-Vaughns and S. L. Johnson, ‘Looking deathworthy: perceived stereotypicality of black defendants predicts capital-sentencing outcomes’, Psychological Science, 17, 5 (2006), pp. 383–86. 19 H. G. Heneman III, T. A. Judge and J. D. Kammeyer-Mueller, Staffing Organizations (Middleton, WI: Mendota House, 2012). 20 J. Willis and A. Todorov, ‘First impressions: making up your mind after a 100ms exposure to a face’, Psychological Science, July 2006, pp. 592–8.

142  5 Perception, individual decision making and creativity 21 N. Eisenkraft, ‘Accurate by way of aggregation should you trust your intuition-based first impressions?’, Journal of Experimental Social Psychology, March 2013, pp. 277–9.

34 See A. W. Kruglanski and G. Gigerenzer, ‘Intuitive and deliberate judgments are based on common principles’, Psychological Review, 118 (2011), pp. 97–109.

22 See, for example, D. Eden, Pygmalion in Management (Lexington, MA: Lexington, 1990); D. Eden, ‘Leadership and expectations: Pygmalion effects and other self-fulfilling prophecies’, Leadership Quarterly, Winter 1992, pp. 271–305; D. B. McNatt, ‘Ancient Pygmalion joins contemporary management: a meta-analysis of the result’, Journal of Applied Psychology, April 2000, pp. 314–22; O. B. Davidson and D. Eden, ‘Remedial self-fulfilling prophecy: two field experiments to prevent Golem effects among disadvantaged women’, Journal of Applied Psychology, June 2000, pp. 386–98; and D. Eden, ‘Self-fulfilling prophecies in organizations’, in J. Greenberg (ed.), Organizational Behavior: The State of the Science, 2nd edn (Mahwah, NJ: Erlbaum: 2003), pp. 91–122.

35 E. Dane and M. G. Pratt, ‘Exploring intuition and its role in managerial decision making,’ Academy of Management Review, 32, 1 (2007), pp. 33–54; and J. A. Hicks, D. C. Cicero, J. Trent, C. M. Burton and L. A. King, ‘Positive affect, intuition, and feelings of meaning’, Journal of Personality and Social Psychology, 98 (2010), pp. 967–79.

23 D. Eden and A. B. Shani, ‘Pygmalion goes to boot camp: expectancy, leadership, and trainee performance’, Journal of Applied Psychology, April 1982, pp. 194–9; and D. B. McNatt and T. A. Judge, ‘Boundary conditions of the Galatea effect: a field experiment and constructive replication’, Academy of Management Journal, August 2004, pp. 550–65. 24 See, for example, K. F. E. Wong and J. Y. Y. Kwong, ‘Effects of rater goals on rating patterns: evidence from an experimental field study’, Journal of Applied Psychology, 92, 2 (2007), pp. 577–85; and S. E. DeVoe and S. S. Iyengar, ‘Managers’ theories of subordinates: a cross-cultural examination of manager perceptions of motivation and appraisal of performance’, Organizational Behavior and Human Decision Processes, January 2004, pp. 47–61. 25 R. Sanders, The Executive Decisionmaking Process: Identifying Problems and Assessing Outcomes (Westport, CT: Quorum, 1999). 26 See H. A. Simon, ‘Rationality in psychology and economics’, Journal of Business, October 1986, pp. 209–24; and E. Shafir and R. A. LeBoeuf, ‘Rationality’, in S. T. Fiske, D. L. Schacter and C. Zahn-Waxler (eds), Annual Review of Psychology, vol. 53 (Palo Alto, CA: Annual Reviews, 2002), pp. 491–517. 27 For a review of the rational decision-making model, see M. H. Bazerman and D. A. Moore, Judgment in Managerial Decision Making, 7th edn (Hoboken, New Jersey: Wiley, 2008). 28 J. G. March, A Primer on Decision Making (New York: The Free Press, 1994), pp. 2–7; and D. Hardman and C. Harries, ‘How rational are we?’ Psychologist, February 2002, pp. 76–9. 29 M. Bazerman, Judgment in Managerial Decision Making, 3rd edn (New York: Wiley, 1994), p. 5. 30 J. E. Russo, K. A. Carlson and M. G. Meloy, ‘Choosing an inferior alternative’, Psychological Science, 17, 10 (2006), pp. 899–904. 31 D. Kahneman, ‘Maps of bounded rationality: psychology for behavioral economics’, American Economic Review, 93, 5 (2003), pp. 1449–75; J. Zhang, C. K. Hsee and Z. Xiao, ‘The majority rule in individual decision making’, Organizational Behavior and Human Decision Processes, 99 (2006), pp. 102–11. 32 See H. A. Simon, Administrative Behavior, 4th edn (New York: The Free Press, 1997); and M. Augier, ‘Simon says: bounded rationality matters’, Journal of Management Inquiry, September 2001, pp. 268–75. 33 G. Gigerenzer, ‘Why heuristics work’, Perspectives on Psychological Science, 3, 1 (2008), pp. 20–29; and A. K. Shah and D. M. Oppenheimer, ‘Heuristics made easy: an effort-reduction framework’, Psychological Bulletin, 134, 2 (2008), pp. 207–22.

36 C. Akinci and E. Sadler-Smith, ‘Intuition in management research: a historical review’, International Journal of Management Reviews, 14 (2012), pp. 104–22. 37 S. P. Robbins, Decide & Conquer: Making Winning Decisions and Taking Control of Your Life (Upper Saddle River, NJ: Financial Times/Prentice Hall, 2004), p. 13. 38 S. Ludwig and J. Nafziger, ‘Beliefs about overconfidence’, Theory and Decision, April 2011, pp. 475–500. 39 S. Plous, The Psychology of Judgment and Decision Making (New York: McGraw-Hill, 1993), p. 217. 40 C. R. M. McKenzie, M. J. Liersch and I. Yaniv, ‘Overconfidence in interval estimates: what does expertise buy you?’, Organizational Behavior and Human Decision Processes, 107 (2008), pp. 179–91. 41 J. Kruger and D. Dunning, ‘Unskilled and unaware of it: how difficulties in recognizing one’s own incompetence lead to inflated self-assessments’, Journal of Personality and Social Psychology, November 1999, pp. 1121–34; and R. P. Larrick, K. A. Burson and J. B. Soll, ‘Social comparison and confidence: when thinking you’re better than average predicts overconfidence (and when it does not)’, Organizational Behavior and Human Decision Processes, 102 (2007), pp. 76–94. 42 K. M. Hmieleski and R. A. Baron, ‘Entrepreneurs’ optimism and new venture performance: a social cognitive perspective’, Academy of Management Journal, 52, 3 (2009), pp. 473–88. 43 R. Frick and A. K. Smith, ‘Overconfidence game’, Kiplinger’s Personal Finance 64, 3 (2010), p. 23. 44 See, for instance, A. Tversky and D. Kahneman, ‘Judgment under uncertainty: heuristics and biases’, Science, September 1974, pp. 1124–31. 45 J. S. Hammond, R. L. Keeney and H. Raiffa, Smart Choices (Boston: HBS Press, 1999), p. 191. 46 C. Janiszewski and D. Uy, ‘Precision of the anchor influences the amount of adjustment’, Psychological Science, 19, 2 (2008), pp. 121–27. 47 See R. S. Nickerson, ‘Confirmation bias: a ubiquitous phenomenon in many guises’, Review of General Psychology, June 1998, pp. 175–220; and E. Jonas, S. Schultz-Hardt, D. Frey and N. Thelen, ‘Confirmation bias in sequential information search after preliminary decisions’, Journal of Personality and Social Psychology, April 2001, pp. 557–71. 48 T. Pachur, R. Hertwig and F. Steinmann, ‘How do people judge risks: availability heuristic, affect heuristic, or both?’, Journal of Experimental Psychology: Applied, 18 (2012), pp. 314–30; A. Tversky and D. Kahneman, ‘Availability: a heuristic for judging frequency and probability’, in D. Kahneman, P. Slovic and A. Tversky (eds), Judgment Under Uncertainty: Heuristics and Biases (Cambridge, UK: Cambridge University Press, 1982), pp. 163–78. 49 G. Morgenson, ‘Debt watchdogs: tamed or caught napping?’, New York Times, 7 December 2009, pp. 1, 32.

EndNotes   143 50 J. Thornhill, R. Milne and M. Steen, ‘Accent on égalité’, Financial Times, 9 June 2008. 51 Ibid.; D. Gilbert, ‘I’m O.K., you’re biased’, New York Times, 16 April 2006, p. 12; and J. Dana and G. Loewenstein, ‘A social science perspective on gifts to physicians from industry’, Journal of the American Medical Association, July 2003, pp. 252–5. 52 K. Moser, H.-G. Wolff and A. Kraft, ‘The de-escalation of commitment: predecisional accountability and cognitive processes’, Journal of Applied Social Psychology, February 2013, pp. 363–76; and B. M. Staw, ‘The escalation of commitment to a course of action’, Academy of Management Review, October 1981, pp. 577–87. 53 T. Schultze, F. Pfeiffer and S. Schulz-Hardt, ‘Biased information processing in the escalation paradigm: information search and information evaluation as potential mediators of escalating commitment’, Journal of Applied Psychology, 97 (2012), pp. 16–32. 54 D. J. Sleesman, D. E. Conlon, G. McNamara and J. E. Miles, ‘Cleaning up the Big Muddy: a meta-analytic review of the determinants of escalation of commitment’, Academy of Management Journal, 55 (2012), pp. 541–62. 55 See, for instance, A. James and A. Wells, ‘Death beliefs, superstitious beliefs and health anxiety’, British Journal of Clinical Psychology, March 2002, pp. 43–53. 56 See, for example, D. J. Keys and B. Schwartz, ‘Leaky rationality: how research on behavioral decision making challenges normative standards of rationality’, Psychological Science, 2, 2 (2007), pp. 162–80; and U. Simonsohn, ‘Direct risk aversion: evidence from risky prospects valued below their worst outcome’, Psychological Science, 20, 6 (2009), pp. 686–92. 57 J. K. Maner, M. T. Gailliot, D. A. Butz and B. M. Peruche, ‘Power, risk, and the status quo: Does power promote riskier or more conservative decision making?’, Personality and Social Psychology Bulletin, 33, 4 (2007), pp. 451–462. 58 A. Chakraborty, S. Sheikh and N. Subramanian, ‘Termination risk and managerial risk taking’, Journal of Corporate Finance, 13 (2007), pp. 170–88. 59 D. Kahneman and A. Tversky, ‘Prospect theory: an analysis of decisions under risk’, Econometrica, 47, 2 (1979), pp. 263–91; and P. Bryant and R. Dunford, ‘The influence of regulatory focus on risky decision-making’, Applied Psychology: An International Review, 57, 2 (2008), pp. 335–59. 60 A. J. Porcelli and M. R. Delgado, ‘Acute stress modulates risk taking in financial decision making’, Psychological Science, 20, 3 (2009), pp. 278–83. 61 R. L. Guilbault, F. B. Bryant, J. H. Brockway and E. J. Posavac, ‘A meta-analysis of research on hindsight bias’, Basic and Applied Social Psychology, September 2004, pp. 103–17; and L. Werth, F. Strack and J. Foerster, ‘Certainty and uncertainty: the two faces of the hindsight bias’, Organizational Behavior and Human Decision Processes, March 2002, pp. 323–41. 62 H. Moon, J. R. Hollenbeck, S. E. Humphrey and B. Maue, ‘The tripartite model of neuroticism and the suppression of depression and anxiety within an escalation of commitment dilemma’, Journal of Personality, 71 (2003), pp. 347–68; and H. Moon, ‘The two faces of conscientiousness: duty and achievement striving in escalation of commitment dilemmas’, Journal of Applied Psychology, 86 (2001), pp. 535–40. 63 J. Musch, ‘Personality differences in hindsight bias’, Memory, 11 (2003), pp. 473–89. 64 W. K. Campbell and C. Sedikides, ‘Self-threat magnifies the selfserving bias: a meta-analytic integration’, Review of General Psychology, 3 (1999), pp. 23–43.

65 This section is based on S. Nolen-Hoeksema, J. Larson and C. Grayson, ‘Explaining the gender difference in depressive symptoms’, Journal of Personality & Social Psychology, November 1999, pp. 1061–72; and J. S. Hyde, A. H. Mezulis and L. Y. Abramson, ‘The ABCs of depression: integrating affective, biological, and cognitive models to explain the emergence of the gender difference in depression’, Psychological Review, 115, 2 (2008), pp. 291–313. 66 H. Connery and K. M. Davidson, ‘A survey of attitudes to depression in the general public: a comparison of age and gender differences’, Journal of Mental Health, 15, 2 (April 2006), pp. 179–89. 67 M. Elias, ‘Thinking it over, and over, and over’, USA Today, 6 February 2003, p. 10D. 68 K. E. Stanovich and R. F. West, ‘On the relative independence of thinking biases and cognitive ability’, Journal of Personality and Social Psychology, 94, 4 (2008), pp. 672–95. 69 N. J. Adler, International Dimensions of Organizational Behavior, 4th edn (Cincinnati, OH: South-Western Publishing, 2002), pp. 182–9. 70 A. Wildavsky, The Politics of the Budgetary Process (Boston: Little, Brown, 1964). 71 G. F. Cavanagh, D. J. Moberg and M. Valasquez, ‘The ethics of organizational politics’, Academy of Management Journal, June 1981, pp. 363–74. 72 See, for example, T. Machan (ed.), Commerce and Morality (Totowa, NJ: Rowman & Littlefield, 1988). 73 L. L. Shu and F. Gino, ‘Sweeping dishonesty under the rug: how unethical actions lead to forgetting of moral rules’, Journal of Personality and Social Psychology, 102 (2012), pp. 1164–77. 74 B. C. Gunia, L. Wang, L. Huang, J. Wang and J. K. Murnighan, ‘Contemplation and conversation: subtle influences on moral decision making’, Academy of Management Journal, 55 (2012), pp. 13–33. 75 R. F. West, R. J. Meserve and K. E. Stanovich, ‘Cognitive sophistication does not attenuate the bias blind spot’, Journal of Personality and Social Psychology, 103 (2012), pp. 506–19. 76 T. Jackson, ‘Cultural values and management ethics: a 10-nation study’, Human Relations, October 2001, pp. 1267–1302; see also J. B. Cullen, K. P. Parboteeah and M. Hoegl, ‘Cross-national differences in managers’ willingness to justify ethically suspect behaviors: a test of institutional anomie theory’, Academy of Management Journal, June 2004, pp. 411–21. 77 ‘Is your art killing you?’ Investorideas.com, 13 May 2013, www. investorideas.com/news/2013/renewable-energy/05134.asp. 78 G. Anderson, ‘Three tips to foster creativity at your startup’, ArcticStartup, 8 May 2013, http://www.arcticstartup.com/. 79 E. Millar, ‘How do Finnish kids excel without rote learning and standardized testing?’, The Globe and Mail, 9 May 2013, www. theglobeandmail.com/. 80 C. K. W. De Dreu, B. A. Nijstad, M. Baas, I. Wolsink and M. Roskes, ‘Working memory benefits creative insight, musical improvisation, and original ideation through maintained task-­ focused attention’, Personality and Social Psychology Bulletin, 38 (2012), pp. 656–69. 81 S. M. Wechsler, C. Vendramini and T. Oakland, ‘Thinking and creative styles: a validity study’, Creativity Research Journal, 24 (April 2012), pp. 235–42. 82 Y. Gong, S. Cheung, M. Wang and J. Huang, ‘Unfolding the proactive processes for creativity: integration of the employee proactivity, information exchange, and psychological safety perspectives’, Journal of Management, 38 (2012), pp. 1611–33.

144  5 Perception, individual decision making and creativity 83 S. N. de Jesus, C. L. Rus, W. Lens and S. Imaginário, ‘Intrinsic motivation and creativity related to product: a meta-analysis of the studies published between 1990–2010’, Creativity Research Journal, 25 (2013), pp. 80–84.

89 I. J. Hoever, D. van Knippenberg, W. P. van Ginkel and H. G. Barkema, ‘Fostering team creativity: perspective taking as key to unlocking diversity’s potential’, Journal of Applied Psychology, 97 (2012), pp. 982–96.

84 L. Sun, Z. Zhang, J. Qi and Z. X. Chen, ‘Empowerment and creativity: a cross-level investigation’, Leadership Quarterly, 23 (2012), pp. 55–65.

90 S. J. Shin, T. Kim, J. Lee and L. Bian, ‘Cognitive team diversity and individual team member creativity: a cross-level interaction’, Academy of Management Journal, 55 (2012), pp. 197–212.

85 T. Rinne, D. G. Steel and J. Fairweather, ‘The role of Hofstede’s individualism in national-level creativity’, Creativity Research Journal, 25 (2013), pp. 129–36.

91 A. W. Richter, G. Hirst, D. van Knippenberg and M. Baer, ‘Creative self-efficacy and individual creativity in team contexts: crosslevel interactions with team informational resources’, Journal of Applied Psychology, 97 (2012), pp. 1282–90.

86 X. Yi, W. Hu, H. Scheithauer and W. Niu, ‘Cultural and bilingual influences on artistic creativity performances: comparison of German and Chinese students’, Creativity Research Journal, 25 (2013), pp. 97–108. 87 D. Liu, H. Liao and R. Loi, ‘The dark side of leadership: a threelevel investigation of the cascading effect of abusive supervision on employee creativity’, Academy of Management Journal, 55 (2012), pp. 1187–212. 88 J. B. Avey, F. L. Richmond and D. R. Nixon, ‘Leader positivity and follower creativity: an experimental analysis’, Journal of Creative Behavior, 46 (2012), pp. 99–118; and A. Rego, Arménio, F. Sousa, C. Marques and M. E. Cunha, ‘Authentic leadership promoting employees’ psychological capital and creativity’, Journal of Business Research, 65 (2012), pp. 429–37.

92 J. S. Mueller, S. Melwani and J. A. Goncalo, ‘The bias against creativity: why people desire but reject creative ideas’, Psychological Science, 23 (2012), pp. 13–17. 93 T. Montag, C. P. Maertz and M. Baer, ‘A critical analysis of the workplace creativity criterion space’, Journal of Management, 38 (2012), pp. 1362–86. 94 M. Baer, ‘Putting creativity to work: the implementation of creative ideas in organizations’, Academy of Management Journal, 55 (2012), pp. 1102–19. 95 A. Somech and A. Drach-Zahavy, ‘Translating team creativity to innovation implementation: the role of team composition and climate for innovation’, Journal of Management, 39 (2013), pp. 684–708.

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CHAPTER 6 Motivation concepts learning objectives After studying this chapter, you should be able to: 1 Describe the three key elements of motivation. 2 Evaluate the applicability of early theories of motivation. 3 Apply the predictions of self-determination theory to intrinsic and extrinsic rewards. 4 Identify the implications of employee job engagement for management. 5 Describe goal-setting theory, self-efficacy theory and reinforcement theory. 6 Demonstrate how organizational justice is a refinement of equity theory. 7 Apply the key tenets of expectancy theory to motivating employees. 8 Compare contemporary theories of motivation.

Motivation will almost always beat mere talent. Norman Ralph Augustine

Arnold power

Joe Seer / Shutterstock

Arnold Schwarzenegger, bodybuilder, actor, businessman, activist, writer, director and politician is a man of tremendous ambition and astonishing will. Motivated early on by a strict childhood in Austria and by dreams of grandeur that would be labelled delusional – except that he achieved them. He decided early on that ‘the bigger you are and the more impressive you look physically, the more people listen and the better you can sell yourself or anything else’. A brutal training regime of up to five hours each day meant he reached his first goal, to become Mr Universe, by age 20 and soon after became the youngest ever Mr Olympia at 23. He made it to America by age 21 and was a millionaire before his Hollywood career even began. He has been successful with many business ventures and investments, starting with a bricklaying business he co-founded. He has investments that now include high-value properties, companies, stocks and bonds. Schwarzenegger took the same approach with Hollywood that he’d taken with bodybuilding and business: nothing was going to stop him from being successful. ‘One of the great differences about him was that he had a professional business attitude about being a star’, says Ivan Reitman, who produced and directed him in Twins and Kindergarten Cop. Schwarzenegger Source: B. Morris, ‘Arnold power’, Fortune, 150, 3 (2004), pp. 77–83.

says he was always thinking, ‘How can I convince the world . . . to get out of their home and go watch me?’ He was a tireless promoter of everything he was involved in – his movies, his books, his volunteer projects. He did a 30-city book tour for his Encyclopedia of Modern Bodybuilding, visited 64 countries to promote the Special Olympics, met every governor in the country as chairman of the first President Bush’s Commission on Physical Fitness. He learned to turn a deaf ear on doubters. ‘Other people would say, “This can never happen. There’s the talent problem. There’s the language problem. The name itself  – Schwarzenegger – no one can pronounce it”,’ he recalls. ‘Those were their obstacles, not mine.’ If his name was difficult to pronounce, he told himself, then it would be unforgettable. Being a hugely successful bodybuilder, actor and businessman would probably be enough for most people. Not Schwarzenegger. Elected Governor of California for the first time in 2003, a new era as a politician began that continued until the end of his second term in 2011. Maybe then it was time to retire? Not yet. Within a few weeks of leaving office in California he was reading film scripts again including another Terminator movie. To quote a phrase from one of his most successful films, according to Schwarzenegger, ‘I’ll be back’.

148  6 Motivation concepts

What motivates people like Arnold Schwarzenegger to excel? Is there anything organiz­ ations can do to encourage that sort of motivation in their employees? Motivating employees is one of the most important, and one of the most challenging, aspects of management. As we will see, there is no shortage of advice about how to do it.

REFLECTION Motivation is not simply about working hard – it also reflects your view of your own abilities. How confident are you in your ability to succeed?

Motivation is one of the most frequently researched topics in OB.1 One reason for its popu­ larity is revealed by survey evidence that tells us the majority of the workforce is not engaged (see the Face the Facts feature) and wasting time at work. One survey revealed that 69 per cent of workers reported wasting time at work every day, and nearly a quarter said they waste between 30 and 60 minutes each day. How? Usually by surfing the internet (checking the news and visiting social network sites was cited) and chatting with co-workers.2 In this chapter, we’ll review the basics of motivation, assess motivation theories and provide an integrative model that fits theories together.

Defining motivation 1  Describe the three key elements of motivation. motivation The processes that account for an individual’s intensity, direction and persistence of effort towards attaining a goal.

What is motivation? It’s the result of the interaction between an individual and a situation. Certainly, some individuals, such as Arnold Schwarzenegger, seem to be driven to succeed. But the same student who finds it difficult to read a textbook for more than 20 minutes may devour a Harry Potter book in a day. For this student, the difference in motivation is driven by the situation. So as we analyse the concept of motivation, keep in mind that the level of motivation varies both between individuals and within individuals at different times. We define motivation as the processes that account for an individual’s intensity, direction and persistence of effort towards attaining a goal.3 While general motivation is concerned with effort towards any goal, we’ll narrow the focus to organizational goals in order to reflect our singular interest in work-related behaviour.

Employee motivation ●

A 142-country workforce study concluded that only 13 per cent of employees worldwide are ‘actively engaged’ at work. Of the remainder, 63 per cent are ‘not engaged’, meaning they lack motivation and are less likely to demonstrate organizational citizenship behaviours, and 24 per cent are ‘actively disengaged’.

●

The same study revealed levels of engagement differ considerably according to the region. The US and Canada (29 per cent) had the highest percentage of actively engaged workers, Western Europe reported 14 per cent, while the lowest percentage was in East Asia (6 per cent).

FACE THE FACTS ●

Another global survey of more than 200,000 employees at over 500 organizations asked, ‘What motivates you to excel and go the extra mile at our organization?’. The top-five results were: 1. camaraderie, peer motivation 2. intrinsic desire to do a good job 3. feeling encouraged and recognized 4. having a real impact 5. growing professionally. ‘Money and benefits’ came in at number 7.

Sources: Gallup, ‘State of the global workplace’, www.gallup.com; TINYpulse, ‘The 7 key trends impacting today’s workplace: results from the 2014 TINYpulse employee engagement and organisational culture report’. http://www.tinyhr .com/2014-employee-engagement-organizational-culture-report

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Intensity is concerned with how hard a person tries. This is the element most of us focus on when we talk about motivation. However, high intensity is unlikely to lead to favourable job-performance outcomes unless the effort is channelled in a direction that benefits the organization. Therefore, we have to consider the quality of effort as well as its intensity. Effort that is directed towards, and consistent with, the organization’s goals is the kind of effort that we should be seeking. Finally, motivation has a persistence dimension. This is a measure of how long a person can maintain effort. Motivated individuals stay with a task long enough to achieve their goal.

Early theories of motivation 2  Evaluate the The 1950s were a fruitful period in the development of motivation concepts. Four specific applicability of early theories were formulated during this period, which although questionable in terms of validity, theories of motivation. are probably still the best-known explanations for employee motivation. As you’ll see later in

this chapter, we have since developed more valid explanations of motivation, but you should know these early theories for at least two reasons: (1) They represent a foundation from which contemporary theories have grown, and (2) practising managers still regularly use these theo­ ries and their terminology in explaining employee motivation.

Hierarchy of needs theory hierarchy of needs theory A hierarchy of five needs – physiological, safety, social, esteem and self-actualization – in which, as each need is substantially satisfied, the next need becomes dominant.

It’s probably safe to say that the best-known theory of motivation is Abraham Maslow’s ­hierarchy of needs theory.4 Maslow hypothesized that within every human being, there exists a hierarchy of five needs: 1. Physiological. Includes hunger, thirst, shelter, sex and other bodily needs 2. Safety. Security and protection from physical and emotional harm 3. Social. Affection, belongingness, acceptance and friendship 4. Esteem. Internal factors such as self-respect, autonomy and achievement, and external

factors such as status, recognition and attention 5. Self-actualization. Drive to become what one is capable of becoming; includes growth,

achieving one’s potential and self-fulfilment

lower-order needs Needs that are satisfied externally, such as physiological and safety needs. self-actualization The drive to become what a person is capable of becoming. higher-order needs Needs that are satisfied internally, such as social, esteem and selfactualization needs.

Although no need is ever fully gratified, a substantially satisfied need no longer motivates. Thus, as each need becomes substantially satisfied, the next one becomes dominant. So if you want to motivate someone, according to Maslow, you need to understand what level of the hierarchy that person is currently on and focus on satisfying needs at or above that level, moving up the steps in Figure 6.1. Maslow separated the five needs into higher and lower orders. Physiological and safety needs were described as lower-order needs and social, esteem and self-actualization as ­higher-order needs. The differentiation between the two orders was made on the premise that higher-order needs are satisfied internally (within the person), whereas lower-order needs are predominantly satisfied externally (by things such as pay, union contracts and tenure). The hierarchy, if it applies at all, aligns with US culture. In Japan, Greece and Mexico, where uncertainty-avoidance characteristics are strong, security needs would be on top of the hierarchy. Countries that score high on nurturing characteristics – Denmark, Sweden, Norway, the Netherlands and Finland – would have social needs and self-actualization on top.5 Group work will motivate employees more when the country’s culture scores high on the nurturing criterion. Maslow’s needs theory has received wide recognition, particularly among practising managers. This can be attributed to the theory’s intuitive logic and ease of understanding. Unfortunately, however, research does not validate the theory. Maslow provided no empirical

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Selfactualization Esteem Social Safety Physiological

Figure 6.1  Maslow’s hierarchy of needs Source: A. H. Maslow; R. D. Frager and J. Fadiman (eds), Motivation and Personality, 3rd edn © 1987. Electronically reproduced by permission of Pearson Education, Inc., Upper Saddle River, New Jersey.

substantiation, and several studies that sought to validate the theory found no support for it.6 But old theories, especially intuitively logical ones, die hard. Some researchers have attempted to revive components of the need hierarchy concept, using principles from evolutionary psychology.7 They propose that lower-level needs are the chief concern of imma­ ture animals or those with primitive nervous systems, whereas higher needs are more frequently observed in mature animals with more developed nervous systems. They also note distinct underlying biological systems for different types of needs. Time will tell whether these revisions to Maslow’s hierarchy will be useful to practising managers.

Theory X and Theory Y Theory X The assumption that employees dislike work, are lazy, dislike responsibility and must be coerced to perform. Theory Y The assumption that employees like work, are creative, seek responsibility and can exercise self-direction.

Douglas McGregor proposed two distinct views of human beings: one basically negative, labelled Theory X, and the other basically positive, labelled Theory Y.8 After viewing the way in which managers dealt with employees, McGregor concluded that managers’ views of the nature of human beings are based on a certain grouping of assumptions and that managers tend to mould their behaviour towards employees according to these assumptions. Under Theory X, managers believe that employees inherently dislike work and must there­ fore be directed or even coerced into performing it. In contrast to these negative views about the nature of human beings, under Theory Y, managers assume that employees can view work as being as natural as rest or play, and therefore the average person can learn to accept, and even seek, responsibility. To understand Theory X and Theory Y more fully, think in terms of Maslow’s hierarchy. Theory Y assumes that higher-order needs dominate individuals. McGregor himself held to the belief that Theory Y assumptions were more valid than Theory X. Therefore, he proposed

‘Helping others and being a good citizen is good for your career’ We would be likely to think that we should encourage employee motivation towards organizational citizenship behaviour (OCB), and that helping others would be a benefit to their careers. We would also likely believe that our own OCB would yield us career benefits. Surprisingly, there is some evidence that this statement is false, at least in certain organizations. Why? In some organizations, employees are evaluated more on how their work gets done. If they possess the requisite knowledge and skills, or if they demonstrate the right behaviours on the job (for example, always greeting customers with a smile), they are determined by management to be motivated, ‘good’ performers. In these organizations, actions targeted towards task performance goals and actions targeted towards ‘citizenship’ goals (for example, helping a co-worker in need) are evaluated positively, which then motivates employees to continue their OCB. Employees’ careers benefit as a result of their helpfulness towards co-workers. However, in other organizations, employees are evaluated more on what gets done. Here, employees are determined

MYTH OR SCIENCE?

to be ‘good’ performers if they meet objective goals such as billing clients a certain number of hours or reaching a certain sales volume. When managers overlook employee OCB, frown on helpful behaviours, or create an overly competitive organ­ izational culture, employees become unmotivated to continue their helpful actions. Employees who still engage in OCB can find their careers are hindered when they take time away from core tasks to be helpful. The upshot? There may be a trade-off between being a good performer and being a good citizen. In organizations that focus more on behaviours, following your motivation to be a good citizen can help to accomplish your career goals. However, in organizations that focus more on objective outcomes, you may need to consider the cost. Sources: D. M. Bergeron, ‘The potential paradox of organizational citizenship behavior: good citizens at what cost?’, Academy of Management Review, 32, 4 (2007); and D. M. Bergeron, A. J. Shipp, B. Rosen and S. A. Furst, ‘Organizational citizenship behavior and career outcomes: the cost of being a good citizen’, Journal of Management, 39, 4 (2013), pp. 958–84.

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such ideas as participative decision making, responsible and challenging jobs and good group relations as approaches that would maximize an employee’s job motivation. Unfortunately, there is no evidence to confirm that either set of assumptions is valid or that accepting Theory Y assumptions and altering one’s actions accordingly will lead to more motivated workers. OB theories need to have empirical support before we can accept them. Such empirical support is lacking for Theory X and Theory Y as it is for the hierarchy of needs theories.

Two-factor theory two-factor theory A theory that relates intrinsic factors to job satisfaction and associates extrinsic factors with dissatisfaction. Also called motivationhygiene theory.

Psychologist Frederick Herzberg proposed the two-factor theory – also called motivation-­ hygiene theory.9 Believing that an individual’s relation to work is basic and that one’s attitude towards work can very well determine success or failure, Herzberg investigated the question ‘What do people want from their jobs?’ He asked people to describe, in detail, situations in which they felt exceptionally good or bad about their jobs. The responses were then tabulated and categorized. From the categorized responses, Herzberg concluded that the replies people gave when they felt good about their jobs were significantly different from the replies given when they felt bad. As shown in Figure 6.2, certain characteristics tend to be consistently related to job satis­ faction and others to job dissatisfaction. Intrinsic factors, such as advancement, recognition, responsibility and achievement seem to be related to job satisfaction. Respondents who felt good about their work tended to attribute these factors to themselves. On the other hand, dissatisfied respondents tended to cite extrinsic factors, such as supervision, pay, company policies and working conditions. The data suggest, said Herzberg, that the opposite of satisfaction is not dissatisfaction, as was traditionally believed. Removing dissatisfying characteristics from a job does not

Factors characterizing 1,844 events on the job that led to extreme dissatisfaction

Factors characterizing 1,753 events on the job that led to extreme satisfaction

69

19 31

81

Figure 6.2  Comparison of satisfiers and dissatisfiers Source: Reprinted by permission of Harvard Business School Press. From F. Herzberg, One More Time: How Do You Motivate Employees? (Boston, MA: Harvard Business School Press, 2003). Copyright © 2003 by the Harvard Business School Publishing Corporation; all rights reserved.

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necessarily make the job satisfying. As illustrated in Figure 6.3, Herzberg proposed that his findings indicated the existence of a dual continuum: the opposite of ‘satisfaction’ is ‘no satisfacSatisfaction Dissatisfaction tion’, and the opposite of ‘dissatisfaction’ is ‘no dissatisfaction’. According to Herzberg, the factors that lead to job satisfaction Herzberg’s view are separate and distinct from those that lead to job dissatisfaction. Therefore, managers who seek to eliminate factors that can Motivators create job dissatisfaction may bring about peace but not necesSatisfaction No satisfaction sarily motivation. They will be placating their workforce rather than motivating workers. As a result, Herzberg characterized Hygiene factors conditions surrounding the job such as quality of supervision, pay, No dissatisfaction Dissatisfaction company policies, physical working conditions, relations with others and job security as hygiene factors. When they’re adequate, Figure 6.3  Contrasting views of satisfaction and people will not be dissatisfied; neither will they be satisfied. If dissatisfaction we want to motivate people on their jobs, Herzberg suggested emphasizing factors associated with the work itself or with outcomes directly derived from it, hygiene factors such as promotional opportunities, opportunities for personal growth, recognition, responsiFactors – such as bility and achievement. These are the characteristics that people find intrinsically rewarding. company policy and administration, The two-factor theory has not been well supported in the literature and it has many detracsupervision and salary – tors.10 The criticisms of the theory include the following: Traditional view

that, when adequate in a job, placate workers. When these factors are adequate, people will not be dissatisfied.

1. The procedure that Herzberg used is limited by its methodology. When things are going

well, people tend to take credit themselves. Contrarily, they blame failure on the extrinsic environment. 2. The reliability of Herzberg’s methodology is questioned. Raters have to make interpreta-

tions, so they may contaminate the findings by interpreting one response in one manner while treating a similar response differently. 3. No overall measure of satisfaction was utilized. A person may dislike part of a job yet still

think the job is acceptable overall. 4. Herzberg assumed a relationship between satisfaction and productivity, but the research methMcClelland’s theory of needs A theory which states that achievement, power and affiliation are three important needs that help explain motivation. need for achievement (nAch) The drive to excel, to achieve in relation to a set of standards, and to strive to succeed. need for power (nPow) The need to make others behave in a way in which they would not have behaved otherwise.

odology he used looked only at satisfaction and not at productivity. To make such research relevant, one must assume a strong relationship between satisfaction and productivity. Regardless of the criticisms, Herzberg’s theory has been widely read and few managers are unfamiliar with its recommendations.

McClelland’s theory of needs You have one beanbag, and there are five targets set up in front of you. Each one is progressively farther away and, hence, more difficult to hit. Target A is easy. It sits almost within arm’s reach. If you hit it, you get €2. Target B is a bit farther out, but about 80 per cent of the people who try can hit it. It pays €4. Target C pays €8, and about half the people who try can hit it. Very few people can hit Target D, but the payoff is €16 for those who do. Finally, Target E pays €32, but it’s almost impossible to achieve. Which target would you try for? If you selected C, you’re likely to be a high achiever. Why? Read on. McClelland’s theory of needs was developed by David McClelland and his associates.11 The theory focuses on three needs, defined as follows: ●

to strive to succeed. ●

need for affiliation (nAff) The desire for friendly and close interpersonal relationships.

Need for achievement (nAch) is the drive to excel, to achieve in relation to a set of standards, Need for power (nPow) is the need to make others behave in a way in which they would not

have behaved otherwise. ●

Need for affiliation (nAff) is the desire for friendly and close interpersonal relationships.

Of the three needs, McClelland and subsequent researchers focused most of their attention on nAch. High achievers perform best when they perceive their probability of success as 0.5

Guillem Lopez / Alamy Stock Photo

Contemporary theories of motivation   153

– that is, when they estimate that they have a 50–50 chance of success. They dislike gambling with high odds because they get no achievement satisfaction from success that comes by pure chance. Similarly, they dislike low odds (high probability of success) because then there is no challenge to their skills. They like to set goals that require stretching themselves a little. Relying on an extensive amount of research, we can make some reasonably well-supported predictions of the relationship between achievement need and job performance. Although less research has been done on power and affiliation needs, there are consistent findings there, too. First, when jobs have a high degree of personal responsibility and feedback and an intermediate degree of risk, high achievers are strongly motivated. High achievers, for example, are successful in entrepreneurial activities such as running their own businesses and managing self-contained units within large organizations.12 Second, a high need to achieve does not necessarily make someone a good manager, especially in large organizations. People with a high achievement need are interested in how well they do personally and not in influencing others to do well. High-nAch salespeople do not necessarily make good sales managers, and the good general manager in a large organization does not typically have a high need to achieve.13 Third, the needs for affiliation and power tend to be closely related to managerial success. The best managers are high in their need for power and low in their need for affiliation.14 In fact, a high power motive may be a requirement for managerial effectiveness.15 Not many people could be said to be comfortable The view that a high achievement need acts as an internal in skate parks and boardrooms, but Tony Hawk is an motivator presupposes two cultural characteristics – willing­ exception. A pro skateboarder by the age of 14, over the next seventeen years he went on to win more ness to accept a moderate degree of risk (which excludes coun­ than 70 pro contests and remould the skateboarding tries with strong uncertainty – avoidance characteristics) and world. In business, he is the owner of one of the largest concern with performance (which applies to countries with skateboard company’s in the world, a hugely popular strong achievement characteristics). This combination is found video game franchise, a clothing line and a charitable in Anglo-American countries such as the United States, Canada foundation that brings skate parks to low income and the UK and much less in Chile and Portugal. neighbourhoods. Tony Hawk is a high achiever. As you might have gathered, of the early theories of motivation, McClelland’s has had the best research support. Unfortunately, it has less practical effect than the others. Because McClelland argued that the three needs are subconscious – meaning that we may be high on these needs but not know it – measuring them is not easy. In the most common approach, a trained expert presents pictures to individuals, asks them to tell a story about each, and then scores their responses in terms of the three needs. However, because measuring the needs is time-consuming and expensive, few organizations have been willing to invest time and resources in measuring McClelland’s concept.

Contemporary theories of motivation The previously described theories are well known but, unfortunately, have either not held up well under close examination or fallen out of favour. However, there are a number of contem­ porary theories, and they have one thing in common: each has a reasonable degree of valid supporting documentation. Of course, this doesn’t mean that the theories we are about to introduce are unquestionably right. We call them ‘contemporary theories’ not because they were all developed recently but because they represent the current state of thinking in explaining employee motivation.

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Could plants be the key to improving employee motivation? It has been common knowledge for some time now that access to nature improves well-being, but a new report proves that it can have a positive impact on workplace productivity too. The significance of biophilia – which the report defines as ‘an innate connection between humans and nature’ – has grown in recent years as answers are sought to the issue of employees spending more time at the office but employee engagement levels remain low. The report uncovered some surprising truths; 42 per cent of 3,600 office workers in Europe, the Middle East and Africa (EMEA) regions claimed that their workplace provides minimal natural light and 55 per cent of workers said there were no live plants in their office. Perhaps most shocking of all is that 7 per cent of respondents claimed to have no view of a window in their workspace. Spain reported the highest number of employees with no window view (15 per cent), and is the most stressed workforce of all the countries surveyed.

OB IN THE NEWS

In contrast, the same figure is just 2 per cent in Germany and 3 per cent in Denmark; nations with the happiest workforces overall. A concrete example of the benefits of biophilia in the workplace comes in the form of a study where strategic seating arrangements revealed significantly variable productivity results for call centre workers. Those with direct views of nature handled calls 6–7 per cent faster than those with no views. In terms of maximizing workers’ well-being and productivity, there would appear to be serious monetary value in incorporating biophilia into the office environment. If an entire remodel is out of the question, even minor changes – such as the addition of plants and artwork depicting natural scenes – can be beneficial. Source: Adapted from L. Meager, ‘Could plants be the key to improving employee motivation?’, European CEO, 26 November 2014.

Self-determination theory 3  Apply the predictions of selfdetermination theory to intrinsic and extrinsic rewards. Self-determination theory A theory of motivation that is concerned with the beneficial effects of intrinsic motivation and the harmful effects of extrinsic motivation. cognitive evaluation theory A version of selfdetermination theory which holds that allocating extrinsic rewards for behaviour that had been previously intrinsically rewarding tends to decrease the overall level of motivation if the rewards are seen as controlling.

Consider this scenario. ‘It’s strange,’ said Jean-François. ‘I started work at a community leisure centre as a volunteer. I put in 10 hours a week supervising children’s games. I loved coming to work. Then, three months ago, they hired me full-time at €10 an hour. I’m doing the same work I did before. But I’m not finding it as much fun.’ Does Jean-François’s reaction seem counterintuitive? There’s an explanation for it. It’s called self-determination theory, which proposes that people prefer to feel they have control over their actions, so anything that makes a previously enjoyed task feel more like an obligation than a freely chosen activity will undermine motivation.16 Much research on self-­ determination theory in OB has focused on cognitive evaluation theory, which hypothesizes that extrinsic rewards will reduce intrinsic interest in a task. When people are paid for work, it feels less like something they want to do and more like something they have to do. Selfdetermination theory also proposes that in addition to being driven by a need for autonomy, people seek ways to achieve competence and positive connections to others. A large number of studies support self-determination theory.17 Its major implications relate to work rewards. When organizations use extrinsic rewards as payoffs for superior performance, employees feel they are doing a good job less because of their own intrinsic desire to excel than because that’s what the organization wants. Eliminating extrinsic rewards can also shift an individual’s perception of why she works on a task from an external to an internal explanation. If you’re reading an OB book a week because your instructor requires you to, you can attribute your reading behaviour to an external source. However, if you find yourself continuing to read an OB book a week after the course is over, your natural inclination is to say, ‘I must enjoy reading OB because I’m still reading one a week.’ Studies examining how extrinsic rewards increase motivation for creative tasks suggest we might need to place cognitive evaluation theory’s predictions into a broader context.18 Goalsetting is more effective in improving motivation, for instance, when we provide rewards for achieving the goals. The original authors of self-determination theory acknowledge that extrinsic rewards such as verbal praise and feedback about competence can improve intrinsic motivation under specific circumstances. Deadlines and specific work standards do, too, if

Contemporary theories of motivation   155

self-concordance The degree to which peoples’ reasons for pursuing goals are consistent with their interests and core values.

people believe they are in control of their behaviour.19 Making extrinsic rewards specifically contingent on creative performance, rather than more broadly on routine performance, can enhance rather than undermine creativity. Again, like deadlines and specific work standards, the benefits of extrinsic rewards for creativity seem to hold only if individuals have control over the task or the reward.20 These findings are consistent with the central theme of self-determination theory: rewards and deadlines diminish motivation if people see them as coercive or controlling. What does self-determination theory suggest for providing rewards? If a senior sales repre­ sentative really enjoys making the deal, a commission indicates she’s been doing a good job and increases her sense of competence by providing feedback that could improve intrinsic motiva­ tion. On the other hand, if a computer programmer values writing code because she likes to solve problems, a reward for working to an externally imposed standard she does not accept, such as writing a certain number of lines of code every day, could feel coercive, and her intrinsic motivation would suffer. She would be less interested in the task and might reduce her effort. A recent outgrowth of self-determination theory is self-concordance, which considers how strongly peoples’ reasons for pursuing goals are consistent with their interests and core values. If individuals pursue goals because of intrinsic interest, they are more likely to attain goals and are happy even if they do not. Why? Because the process of striving towards them is fun. In contrast, people who pursue goals for extrinsic reasons (money, status or other benefits) are less likely to attain goals and less happy even when they do. Why? Because the goals are less meaningful to them.21 OB research suggests that people who pursue work goals for intrinsic reasons are more satisfied with their jobs, feel they fit into their organizations better and may perform better.22 Research also suggests that in cases where people do not enjoy their work for intrinsic reasons, those who work because they feel obligated to do so can still perform well, though they experience higher levels of strain as a result.23 What does all this mean? For individuals, it means choose your job for reasons other than extrinsic rewards. For organizations, it means managers should provide intrinsic as well as extrinsic incentives. They need to make the work interesting, provide recognition and support employee growth and development. Employees who feel what they do is within their control and a result of free choice are likely to be more motivated by their work and committed to their employers.24

How managers evaluate their employees depends on culture One study found interesting differences in managers’ perceptions of employee motivation. The study examined managers from three distinct cultural regions: North America, Asia and Latin America. The results of the study revealed that North American managers perceive their employees as being motivated more by extrinsic factors (for example, pay) than intrinsic factors (for example, doing meaningful work). Asian managers perceive their employees as being motivated by both extrinsic and intrinsic factors, while Latin American managers perceive their employees as being motivated by intrinsic factors. Even more interesting, these differences affected evaluations of employee performance. As expected, Asian managers focused on both types of motivation when evaluating their employees’ performance and Latin American managers focused on intrinsic motivation. Oddly, North American managers, though believing that employees are motivated primarily by extrinsic factors, actually focused more on intrinsic factors

glOBal

when evaluating employee performance. Why the paradox? One explanation is that North Americans value uniqueness, so any deviation from the norm – such as being perceived as being unusually high in intrinsic motivation – is rewarded. Latin American managers’ focus on intrinsic motivation when evaluating employees may be related to a cultural norm termed simpatía, a tradition that compels employees to display their internal feelings. Consequently, Latin American managers are more sensitized to these displays and can more easily notice their employees’ intrinsic motivation. So, from an employee perspective, the cultural background of your manager can play an important role in how you are evaluated. Source: Based on S. E. DeVoe and S. S. Iyengar, ‘Manager’s theories of subordinates: a cross-cultural examination of manager perceptions of motivation and appraisal of performance’, Organizational Behavior and Human Decision Processes, January 2004, pp. 47–61.

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Job engagement 4  Identify the implications of employee job engagement for management. Job engagement The investment of employee’s physical, cognitive and emotional energies into job performance.

When nurse Helen Jones comes to work, it seems that everything else in her life goes away and she becomes completely absorbed in what she is doing. Her emotions, her thoughts and her behaviour are all directed towards patient care. In fact, she can get so caught up in her work that she isn’t even aware of how long she’s been there. As a result of this total commitment, she is more effective in providing patient care and feels uplifted by her time at work. Helen has a high level of job engagement, the investment of an employee’s physical, cogni­ tive and emotional energies into job performance.25 Practising managers and scholars have become interested in facilitating job engagement, believing something deeper than liking a job or finding it interesting drives performance. Studies attempt to measure this deeper level of commitment. The Gallup organization has been using 26 questions to assess the extent to which employee engagement is linked to positive work outcomes for millions of employees over the past 30 years.26 There are far more engaged employees in highly successful than in average organ­ izations, and groups with more engaged employees have higher levels of productivity, fewer safety incidents and lower turnover. Academic studies have also found positive outcomes. One examined multiple business units for their level of engagement and found a positive relationship with a variety of practical outcomes.27 Another reviewed 91 distinct investiga­ tions and found higher levels of engagement associated with task performance and citizenship behaviour.28 What makes people more likely to be engaged in their jobs? One key is the degree to which an employee believes it is meaningful to engage in work. This is partially determined by job characteristics and access to sufficient resources to work effectively.29 Another factor is a match between the individual’s values and those of the organization.30 Leadership behaviours that inspire workers to a greater sense of mission also increase employee engagement.31 One of the critiques of engagement is that the construct is partially redundant with job attitudes like satisfaction or stress.32 However, engagement questionnaires usually assess moti­ vation and absorption in a task, quite unlike job satisfaction questionnaires. Engagement may also predict important work outcomes better than traditional job attitudes.33 Other critics note there may be a ‘dark side’ to engagement, as evidenced by positive relationships between engagement and work–family conflict.34 Individuals might grow so engaged in their work roles that family responsibilities become an unwelcome intrusion. Further research exploring how engagement relates to these negative outcomes may help clarify whether some highly engaged employees might be getting ‘too much of a good thing’.

Goal-setting theory 5  Describe goalsetting theory, selfefficacy theory and reinforcement theory.

goal-setting theory A theory which says that specific and difficult goals, with feedback, lead to higher performance.

Jerome David, coach of the Thomas School swimming team, gave his squad these last words of advice before they approached the national finals: ‘We’ve trained hard for this. Just do your best. That’s all anyone can ask for.’ You’ve probably heard the sentiment a number of times yourself: ‘Just do your best. That’s all anyone can ask for.’ But what does ‘do your best’ mean? Do we ever know if we’ve achieved that vague goal? Would the swimmers have recorded faster times if Coach David had given each a specific goal to aim for? The research on goal-setting theory addresses these issues and the findings, as you’ll see, are impressive in terms of the effect that goal specificity, challenge and feedback have on performance. In the late 1960s, Edwin Locke proposed that intentions to work towards a goal are a major source of work motivation.35 That is, goals tell an employee what needs to be done and how much effort will need to be expended.36 The evidence strongly supports the value of goals. More to the point, we can say that specific goals increase performance; that difficult goals, when accepted, result in higher performance than do easy goals; and that feedback leads to higher performance than does non-feedback.37 Specific goals produce a higher level of output than does the generalized goal of ‘do your best’. Why? The specificity of the goal itself seems to act as an internal stimulus. For instance,

Contemporary theories of motivation   157

when a courier commits to making four round-trips between Brussels and Munich each week, this intention gives him a specific objective to try to attain. We can say that, all things being equal, the courier with a specific goal will outperform a counterpart operating with no goals or the generalized goal of ‘do your best’. If factors such as acceptance of the goals are held constant, we can also state that the more difficult the goal, the higher the level of performance. Of course, it’s logical to assume that easier goals are more likely to be accepted. But once a hard task is accepted, the employee can be expected to exert a high level of effort to try to achieve it. But why are people motivated by difficult goals?38 First, difficult goals direct our attention to the task at hand and away from irrelevant distractions. Challenging goals get our attention and thus tend to help us focus. Second, difficult goals energize us because we have to work harder to attain them. For example, think of your study habits. Do you study as hard for an easy exam as you do for a difficult one? Probably not. Third, when goals are difficult, people persist in trying to attain them. Finally, difficult goals lead us to discover strategies that help us perform the job or task more effectively. If we have to struggle for a way to solve a difficult problem, we often think of a better way to go about it. People do better when they get feedback on how well they are progressing towards their goals because feedback helps to identify discrepancies between what they have done and what they want to do; that is, feedback acts to guide behaviour. But all feedback is not equally potent. Self-generated feedback – for which employees are able to monitor their own progress – has been shown to be a more powerful motivator than externally generated feedback.39 Recent research has also shown that people monitor their progress differently depending on how close they are to goal accomplishment. When they have just begun pursuing a goal, they derive motivation from believing that the goal is attainable, so they exaggerate their level of progress in order to stay motivated. However, when they are close to accomplishing their goal, they derive motivation from believing a discrepancy still exists between where they are currently and where they’d like to be, so they downplay their progress to date to signal a need for higher effort.40 If employees can participate in the setting of their own goals, will they try harder? The evidence is mixed. In some cases, participatively set goals yielded superior performance; in others, individuals performed best when assigned goals by their boss. But a major advantage of participation may be that it increases acceptance of the goal as a desirable one towards which to work.41 Without participation, the individual pursuing the goal needs to clearly understand its purpose and importance.42 In addition to feedback, three other factors influence the goals–performance relationship: goal commitment, task characteristics and national culture. Goal-setting theory assumes an individual is committed to the goal and determined not to lower or abandon it. The individual (1) believes he or she can achieve the goal and (2) wants to achieve it.43 Goal commitment is most likely to occur when goals are made public, when the individual has an internal locus of control, when the goals are self-set rather than assigned, and when goals are based at least partially on individual ability.44 Goals themselves seem to affect performance more strongly when tasks are simple rather than complex, well learned rather than novel, independent rather than interdependent, and are on the high end of achiev­ able goals.45 On interdependent tasks, group goals are preferable. Paradoxically, goal abandon­ ment following an initial failure is more likely for individuals who self-affirm their core values, possibly because they internalize the implications of failure.46 Finally, setting specific, difficult, individual goals may have different effects in different cultures. Most goal-setting research has been done in the United States and Canada, where individual achievement and performance are most highly valued. To date, research has not shown that group-based goals are more effective in collectivist than in individualist cultures. In collectivistic and high power-distance cultures, achievable moderate goals can be more highly motivating than difficult ones.47 Finally, assigned goals appear to generate greater goal commitment in high than in low power-distance cultures.48 More research is needed to assess how goal constructs might differ across cultures. Although goal-setting has positive outcomes, it’s not unequivocally beneficial.

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For example, some goals may be too effective.49 When learning something is important, goals related to performance undermine adaptation and creativity because people become too focused on outcomes and ignore changing conditions. In this case, a goal to learn and generate alternative solutions will be more effective than a goal to perform. In addition, some authors argue goals can lead employees to focus on a single standard and exclude all others. A goal to boost short-term share prices may lead organizations to ignore long-term success and even to engage in unethical behaviour to meet those goals. Other studies show that employees low in conscientiousness and emotional stability experience greater emotional exhaustion when their leaders set goals.50 Finally, individuals may fail to give up on an unattainable goal, even when it might be beneficial to do so. Despite differences of opinion, most researchers do agree that goals are powerful in shaping behaviour. Managers should make sure goals are aligned with company objectives. Research has found that people differ in the way they regulate their thoughts and behav­ iours during goal pursuit. Generally, people fall into one of two categories, though they could belong to both. Those with a promotion focus strive for advancement and accomplishment and approach conditions that move them closer towards desired goals. Those with a prevention focus strive to fulfil duties and obligations and avoid conditions that pull them away from desired goals. Although you would be right in noting that both strategies are in the service of goal accom­ plishment, the manner in which they get there is quite different. As an example, consider studying for an exam. You could engage in promotion-focused activities such as reading class materials and notes, or you could engage in prevention-focused activities such as refraining from things that would get in the way of studying, such as playing video games or going out with friends. Or, you could do both activities. You may ask, ‘Which is the better strategy?’ Well, the answer to that question depends on the outcome you are striving for. While a promotion (but not a prevention) focus is related to higher levels of task performance, citizenship behaviour and innovation, a prevention (but not a promotion) focus is related to safety performance. Ideally, it’s probably best to be both promotion and prevention oriented.51

promotion focus A self-regulation strategy that involves striving for goals through advancement and accomplishment.

Sakarin Sawasdinaka / Shutterstock

prevention focus A self-regulation strategy that involves striving for goals by fulfilling duties and obligations.

The legendary Jack Welch, chairman and CEO of General Electric for 20 years, popularized the term ‘stretch goals’. Essentially, a stretch goal is one that cannot be achieved by what is known today and will therefore require the organization to come up with a new solution. This differs from performance goals which are challenging, but it is broadly known how to accomplish them. To illustrate stretch goals, Welch would often use the example of the development of the Japanese bullet train. If the initial goal was to increase the speed of existing trains by perhaps 20 km/h, then engineers would have suggested relatively minor amendments within their existing ways of thinking. However, the goal was to double the current speed, and this required new thinking. Today, bullet trains and their even faster contemporaries can travel well over 500 km/h. Many organizations use stretch goals to motivate employees to ‘think outside of the box’.

Contemporary theories of motivation   159 Overall organizational objectives

Divisional objectives

Departmental objectives

XYZ Company

Consumer products division

Production

Sales

Customer service

Industrial products division

Marketing

Research

Development

Individual objectives

Figure 6.4  Cascading of objectives

Implementing goal-setting

management by objectives (MBO) A programme that encompasses specific goals, participatively set, for an explicit time period, with feedback on goal progress.

Goal-setting theory has an impressive base of research support. But as a manager, how do you make it operational? That’s often left up to the individual manager or leader. Some managers explicitly set aggressive performance targets – what General Electric called ‘stretch goals’. For example, some business leaders such as Procter & Gamble’s Robert McDonald and Hasso Plattner, co-founder of the German software firm SAP, are known for the demanding performance goals they set. The problem with leaving it up to the individual manager is that, in many cases, managers don’t set goals. One survey revealed that when asked whether their job had clearly defined goals, only a minority of employees agreed.52 A more systematic way to utilize goal setting is with a management by objectives programme. Management by objectives (MBO) emphasizes participatively set goals that are tangible, verifiable and measurable. As depicted in Figure 6.4, the organization’s overall objectives are translated into specific objectives for each succeeding level (that is, divisional, departmental, individual) in the organization. But because lower-unit managers jointly participate in setting their own goals, MBO works from the ‘bottom up’ as well as from the ‘top down’. The result is a hierarchy that links objectives at one level to those at the next level. And for the individual employee, MBO provides specific personal performance objectives. Four ingredients are common to MBO programmes: goal specificity, participation in decision making (including participation in the setting of goals or objectives), an explicit time period and performance feedback.53 Many of the elements in MBO programmes match propositions of goal-setting theory. For example, having an explicit time period to accomplish objectives matches goal-setting theory’s emphasis on goal specificity. Similarly, we noted earlier that feedback about goal progress is a critical element of goal-setting theory. The only area of possible disagreement between MBO and goal-setting theory relates to the issue of participation: MBO strongly advocates it, whereas goal-setting theory demonstrates that managers assigning goals is usually just as effective. You’ll find MBO programmes in many business, health care, educational, government and nonprofit organizations.54 MBO’s popularity should not be construed to mean that it always works. There are a number of documented cases in which MBO has been implemented but failed to meet management’s expectations.55 When MBO doesn’t work, the culprits tend to be factors such as unrealistic expectations regarding results, lack of commitment by top management, and an inability or unwillingness of management to allocate rewards based on goal accomplishment.

Self-efficacy theory self-efficacy theory An individual’s belief that he or she is capable of performing a task.

Self-efficacy theory (also known as social cognitive theory or social-learning theory) refers to

an individual’s belief that he or she is capable of performing a task.56 The higher your self-efficacy, the more confidence you have in your ability to succeed in a task. So, in difficult situations, people with low self-efficacy are more likely to lessen their effort or give up altogether, while those with high self-efficacy will try harder to master the challenge.57 Self-efficacy can

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create a positive spiral in which those with high efficacy become more engaged in their tasks and then, in turn, increase performance, which increases efficacy further.58 Changes in self-efficacy over time are related to changes in creative performance as well.59 Individuals high in self-efficacy seem to respond to negative feedback with increased effort and motivation, while those low in self-efficacy are likely to lessen their effort when given negative feedback.60 How can managers help their employees achieve high levels of self-efficacy? By bringing together goal-setting theory and self-efficacy theory. Goal-setting theory and self-efficacy theory don’t compete with one another; rather, they complement each other. As Figure 6.5 shows, when a manager sets difficult goals for employees, this leads employees to have a higher level of self-efficacy and also leads them to set higher goals for their own performance. Why is this the case? Research has shown that setting difficult goals for people communicates confidence in them. For example, imagine that your boss sets a high goal for you, and you learn it is higher than the goals she has set for your co-workers. How would you interpret this? As long as you didn’t feel you were being picked on, you would probably think, ‘Well, I suppose my boss thinks I’m capable of performing better than others.’ This then sets into motion a psychological process in which you’re more confident in yourself (higher self-efficacy) and you set higher personal goals, causing you to perform better both in the workplace and outside it. The researcher who developed self-efficacy theory, Albert Bandura, argues that there are four ways self-efficacy can be increased:61 1. Enactive mastery 2. Vicarious modelling 3. Verbal persuasion 4. Arousal

According to Bandura, the most important source of increasing self-efficacy is what he calls enactive mastery – that is, gaining relevant experience with the task or job. If you’ve been able to do the job successfully in the past, then you’re more confident you’ll be able to do it in the future. The second source is vicarious modelling – or becoming more confident because you see someone else doing the task. For example, if your friend loses weight, then it increases your confidence that you can lose weight, too. Vicarious modelling is most effective when you see yourself similar to the person you are observing. Watching Rory McIlroy play a difficult golf

Individual has confidence that given level of performance will be attained (self-efficacy)

Manager sets difficult, specific goal for job or task

Individual has higher level of job or task performance

Individual sets higher personal (self-set) goal for their performance

Figure 6.5  Joint effects of goals and self-efficacy on performance Source: Based on E. A. Locke and G. P. Latham, ‘Building a practically useful theory of goal setting and task motivation: a 35-year odyssey’, American Psychologist, September 2002, pp. 705–17.

Contemporary theories of motivation   161

shot might not increase your confidence in being able to play the shot yourself, but if you watch a golfer with a handicap similar to yours, it’s persuasive. The third source is verbal persuasion, which is becoming more confident because someone convinces you that you have the skills necessary to be successful. Motivational speakers use this tactic a lot. Finally, Bandura argues that arousal increases self-efficacy. Arousal leads to an energized state, which drives a person to complete a task. The person gets into a heightened mental state and performs better. But when arousal is not relevant, then arousal hurts performance. In other words, if the task is something that requires a steady, lower-key perspective (say, carefully editing a manuscript), arousal may in fact hurt performance. What are the OB implications of self-efficacy theory? Well, it’s a matter of applying Bandura’s sources of self-efficacy to the work setting. Training programmes often make use of enactive mastery by having people practise and build their skills. In fact, one of the reasons training works is because it increases self-efficacy.62 The best way for a manager to use verbal persuasion is through the Pygmalion effect or the Galatea effect. The Pygmalion effect is a form of a self-fulfilling prophecy in which believing something to be true can make it true (as discussed in Chapter 5). In the Pygmalion effect, self-efficacy is increased by communicating to an individual’s teacher or supervisor that the person is of high ability. For example, studies were done in which teachers were told their students had very high IQ scores (when in fact they had a range of IQs – some high, some low and some in between). Consistent with a Pygmalion effect, the teachers spent more time with the students they thought were smart, gave them more challenging assignments and expected more of them – all of which led to higher student self-efficacy and better student grades.63 This also has been used in the workplace.64 The Galatea effect occurs when high performance expec­ tations are communicated directly to an employee. For example, sailors who were told, in a convincing manner, that they would not get seasick in fact were much less likely to get seasick.65 Note that intelligence and personality are absent from Bandura’s list. A lot of research shows that intelligence and personality (especially conscientiousness and emotional stability) can increase self-efficacy.66 Those individual traits are so strongly related to self-efficacy (people who are intelligent, conscientiousness and emotionally stable are much more likely to have high self-efficacy than those who score low on these characteristics) that some researchers would argue that self-efficacy does not exist.67 What this means is that self-efficacy may simply be a by-product in a smart person with a confident personality, and the term self-efficacy is superfluous and unnecessary. Although Bandura strongly disagrees with this conclusion, more research on the issue is needed.

Reinforcement theory reinforcement theory A theory that says that behaviour is a function of its consequences.

A counterpoint to goal-setting theory is reinforcement theory. The former is a cognitive approach, proposing that an individual’s purposes direct his action. Reinforcement theory takes a behaviouristic approach, arguing that reinforcement conditions behaviour. The two theories are clearly at odds philosophically. Reinforcement theorists see behaviour as being environmentally caused. You need not be concerned, they would argue, with internal cogni­ tive events; what controls behaviour is reinforcers – any consequences that, when immediately following responses, increase the probability that the behaviour will be repeated. Reinforcement theory ignores the inner state of the individual and concentrates solely on what happens to a person when he or she takes some action. Because it does not concern itself with what initiates behaviour, it is not, strictly speaking, a theory of motivation. But it does provide a powerful means of analysis of what controls behaviour, and for this reason, it is typically considered in discussions of motivation.68 Although it’s clear that so-called reinforcers such as pay can motivate people, it’s just as clear that for people, the process is much more complicated than stimulus–response. In its pure form, reinforcement theory ignores feelings, attitudes, expectations and other cognitive variables that are known to affect behaviour. In fact, some researchers look at the same exper­ iments that reinforcement theorists use to support their position and interpret the findings in a cognitive framework.69

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EMPLOYABILITY AND MOTIVATION Usemyability (UMA) discusses the issue of self-motivation with regards to employability skills. They define self-motivation as, ‘the force that keeps pushing us to go on; it is our internal drive to achieve, produce, develop, and keep moving forward’. UMA claims four factors are necessary to build the strongest levels of self-motivation: 1. Self-assurance and self-confidence

●

Planning – setting achievable and realistic goals, then implementing a systematic and organized strategy to achieving these objectives.

●

Identifying priorities and organizing workload to maximize results.

●

Pursuing tasks with energy, drive and enthusiasm.

●

Showing determination by working towards a goal despite difficulties, setbacks or distractions.

●

Taking personal responsibility to exceed standards and expectations.

●

Taking responsibility to enhance one’s professional development by addressing and overcoming these weaknesses and fully utilize one’s strengths.

2. Positive thinking and self-efficacy 3. Focus and clear goal setting 4. A motivating environment If an individual has limited self-motivation, then UMA believes employability skills such as adaptability; commercial/ sector awareness; problem solving; time management; and self-management may be affected. Focusing on the latter employability skill, self-­management, limited ability with self-motivation may cause difficulties with the following:

Source: www.usemyability.com. Accessed 14 June 2015.

Demonstrating initiative – being able to identify new work opportunities, challenges and responsibilities.

John Giles/PA Archive/Press Association Images

●

Clearly, improving our self-motivation is an important driver of employability.

The Humber Rescue team illustrate the importance of enactive mastery in increasing self-efficacy. The River Humber in the North of England is said to be one of the most dangerous navigable rivers in the world. Humber Rescue is an independent charity responsible for the provision of a fast-response rescue boat on the rivers of the Humber Estuary. The crew is entirely voluntary and comes from all walks of life. Training is vital as it increases the crew’s confidence to succeed in their tasks and turns the volunteers into lifesavers.

Contemporary theories of motivation   163

Reinforcement is undoubtedly an important influence on behaviour, but few scholars are prepared to argue that it is the only influence. The behaviours you engage in at work and the amount of effort you allocate to each task are affected by the consequences that follow from your behaviour. For instance, if you’re consistently reprimanded for outproducing your colleagues, you’ll likely reduce your productivity. But your lower productivity may also be explained in terms of goals, inequity or expectancies.

Equity theory/organizational justice 6  Demonstrate how organizational justice is a refinement of equity theory.

equity theory A theory which says that individuals compare their job inputs and outcomes with those of others and then respond to eliminate any inequities.

Jane Pearson graduated from university last year with a degree in accounting. After interviews with a number of organizations on campus, she accepted a position with a top public accounting firm. Jane was very pleased with the offer she received: challenging work with a prestigious firm, an excellent opportunity to gain valuable experience and the highest salary any accounting major from her university was offered last year – €3,500 per month. But Jane was the top student in her class; she was articulate and mature and she fully expected to receive a commensurate salary. Twelve months have passed since Jane joined her employer. The work has proved to be as challenging and satisfying as she had hoped. Her employer is extremely pleased with her performance; in fact, Jane recently received a €150 per month rise. However, Jane’s motiva­ tional level has dropped dramatically in the past few weeks. Why? Her employer has just hired a fresh graduate from Jane’s former university, who lacks the one-year experience Jane has gained, for €3,750 – €100 more than Jane now makes! Jane is irate. She is even talking about looking for another job. Jane’s situation illustrates the role that equity theory plays in motivation and, more broadly, principles of organizational justice. According to equity theory, employees make comparisons of their job inputs (for example, effort, experience, education, competence) and outcomes (for example, salary levels, rises, recognition) relative to those of others. We perceive what we get from a job situation (outcomes) in relation to what we put into it (inputs), and then we compare our outcome–input ratio with the outcome–input ratios of relevant others. This is shown in Figure 6.6. If we perceive our ratio to be equal to that of the relevant others with whom we compare ourselves, a state of equity is said to exist; we perceive our situation as fair and that justice prevails. When we see the ratio as unequal, we experience equity tension. When we see ourselves as under-rewarded, the tension creates anger; when we see ourselves as over-rewarded, the tension creates guilt. J. Stacy Adams has proposed that this negative state of tension provides the motivation to do something to correct it.70 Based on equity theory, when employees perceive inequity, they can be predicted to make one of six choices:71 1. Change their inputs (for example, exert less effort). 2. Change their outcomes (for example, individuals paid on a piece-rate basis can increase

their pay by producing a higher quantity of units of lower quality). 3. Distort perceptions of self (for example, ‘I used to think I worked at a moderate pace, but

now I realize that I work a lot harder than everyone else’).

Figure 6.6  Equity theory

164  6 Motivation concepts

4. Distort perceptions of others (for example, ‘Alric’s job isn’t as desirable as I previously

thought it was’). 5. Choose a different referent (for example, ‘I may not make as much as my brother-in-law, but

I’m doing a lot better than my Dad did when he was my age’). 6. Leave the field (for example, quit the job).

Organizational justice An overall perception of what is fair in the workplace, composed of distributive, procedural, informational and interpersonal justice. distributive justice Perceived fairness of the amount and allocation of rewards among individuals.

Some of these propositions have been supported, but others haven’t.72 First, inequities created by overpayment do not seem to significantly affect behaviour in most work situations. So don’t expect an employee who feels overpaid to give back part of her salary or put in more hours to make up for the inequity. Although individuals may sometimes perceive that they are over-rewarded, they restore equity by rationalizing their situation (‘I’m worth it because I work harder than everyone else’). Second, not everyone is equity-sensitive.73 A few actually prefer outcome–input ratios lower than the referent comparisons. Predictions from equity theory are not likely to be very accurate about these ‘benevolent types’. Although equity theory’s propositions have not all held up, the hypothesis served as an important precursor to the study of organizational justice, or more simply fairness, in the work­ place.74 Organizational justice is concerned more broadly with how employees feel authorities and decision makers at work treat them. For the most part, employees evaluate how fairly they are treated along four dimensions, shown in Figure 6.7 Distributive justice is concerned with the fairness of the outcomes, such as pay and recogni­ tion, that employees receive. Outcomes can be allocated in many ways. For example, we could distribute rises equally among employees, or we could base them on which employees need

Distributive justice Definition: Perceived fairness of outcome Example: I got the pay rise I deserved

Procedural justice Definition: Perceived fairness of process used to determine outcome Example: I had input into the process used to give rises and was given a good explanation of why I received the rise I did

Informational justice Definition: The degree to which employees are provided truthful explanations for decisions Example: My supervisor fully explained the reasons why the firm could afford to give rises on this occasion

Interpersonal justice Definition: The degree to which employees are treated with dignity and respect Example: When telling me about my raise, my supervisor was very nice and complimentary

Figure 6.7  Model of organizational justice

Organizational justice Definition: Overall perception of what is fair in the workplace Example: I think this is a fair place to work

Contemporary theories of motivation   165

procedural justice The perceived fairness of the process used to determine the distribution of rewards.

informational justice The degree to which employees are provided truthful explanations for decisions.

interpersonal justice The degree to which employees are treated with dignity and respect.

money the most. However, as we discussed about equity theory, employees tend to perceive their outcomes are fairest when they are distributed equitably. The way we have described things so far, it would seem that distributive justice and equity are gauged in a rational, calculative way as individuals compare their outcome–input ratios to others. But the experience of justice, and especially injustice, is often not so cold and calcu­ lated. Instead, people base distributive judgements on a feeling or an emotional reaction to the way they think they are being treated relative to others, and their reactions are often ‘hot’ and emotional as well.75 Although employees care a lot about what outcomes are distributed (distributive justice), they also care a lot about how outcomes are distributed. While distributive justice looks at what outcomes are allocated, procedural justice examines with how outcomes are allocated.76 What makes procedures more or less fair? There are several factors. For one, employees perceive that procedures are fairer when they are given a say in the decision-making process. Having direct influence over how decisions are made, or at the very least being able to present your opinion to decision makers, creates a sense of control and makes us feel empow­ ered (we discuss empowerment more in the next chapter). Employees also perceive that proce­ dures are fairer when decision makers follow several ‘rules’. These include making decisions in a consistent manner (across people and over time), avoiding bias (not favouring one group or person over another), using accurate information, considering the groups or people their decisions affect, acting ethically and remaining open to appeals or correction. It turns out that procedural and distributive justice combine to influence people’s percep­ tions of fairness. If outcomes are favourable and individuals get what they want, they care less about the process, so procedural justice doesn’t matter as much when distributions are perceived to be fair. It’s when outcomes are unfavourable that people pay close attention to the process. If the process is judged to be fair, then employees are more accepting of unfavourable outcomes.77 Why is this the case? It’s likely that employees believe that fair procedures, which often have long-lasting effects, will eventually result in a fair outcome, even if the immediate outcome is unfair. Think about it. If you are hoping for a rise and your manager informs you that you did not receive one, you’ll probably want to know how rises were determined. If it turns out that your manager allocated rises based on merit, and you were simply outper­ formed by a co-worker, then you’re more likely to accept your manager’s decision than if rises were based on favouritism. Of course, if you get the rise in the first place, then you’ll be less concerned with how the decision was made. Beyond outcomes and procedures, research has shown that employees care about two other types of fairness that have to do with the way they are treated during interactions with others. The first type is informational justice, which reflects whether managers provide employees with explanations for key decisions and keep them informed of important organizational matters. The more detailed and candid managers are with employees, the more fairly treated those employees feel. Though it may seem obvious that managers should be honest with their employees and not keep them in the dark about organizational matters, many managers are hesitant to share information. This is especially the case with bad news, which is uncomfortable for both the manager delivering it and the employee receiving it. For example, managers may fail to provide an adequate explanation for bad news such as a layoff or temporary pay cut out of a fear of being blamed, worries about making the situation worse, or concerns about triggering legal action.78 In fact, research has linked the absence of explanations to increased litigation inten­ tions by employees who have been laid off.79 Explanations for bad news are beneficial when they take the form of post hoc excuses (‘I know this is bad, and I wanted to give you the office, but it wasn’t my decision’) rather than justifications (‘I decided to give the office to Sam, but having it isn’t a big deal’).80 The second type of justice relevant to interactions between managers and employees is interpersonal justice, which reflects whether employees are treated with dignity and respect. Compared to the three other forms of justice we’ve discussed, interpersonal justice is unique in that it can occur in everyday interactions between managers and employees.81 This quality allows managers to take advantage of (or miss out on) opportunities to make their employees

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Tim Ockenden/PA Archive/Press Association

feel fairly treated. Many managers may view treating employees politely and respectfully as too ‘soft’, choosing more aggressive tactics out of a belief that doing so will be more moti­ vating. Although displays of negative emotions such as anger may be motivating in some cases,82 managers sometimes take this too far. After all this talk about types of justice, how much does justice really matter to employees? A great deal, as it turns out. When employees feel fairly treated, they respond in a number of positive ways. All four types of justice discussed in this section have been linked to higher levels of task performance and citizenship behaviours such as helping co-workers, as well as lower levels of counterproductive behaviours such as shirking job duties. Distributive and procedural justice are more strongly associated with task performance, while informational and interper­ sonal justice are more strongly associated with citizenship behaviour. Even more physiological outcomes, such as how well employees sleep and the state of their health, have been linked to fair treatment.83 Why does justice have these positive effects? First, fair treatment enhances commitment to the organization and makes employees feel it cares about their well-being. In addition, employees who feel fairly treated trust their supervisors more, which reduces uncertainty and fear of being exploited by the organization. Finally, fair treatment elicits positive emotions, which in turn prompts behaviours like citizenship.84 Studies suggest that managers are indeed motivated to foster employees’ perceptions of justice because they wish to ensure compliance, maintain a positive identity and establish fairness at work.85 To enhance perceptions of justice, they should realize that employees are especially sensitive to unfairness in procedures when bad news has to be communicated (that is, when distributive justice is low). Thus, it’s especially important to openly share informa­ tion about how allocation decisions are made, follow consistent and unbiased procedures and engage in similar practices to increase the perception of procedural justice. However, it may be that managers are constrained in how much they can affect distrib­ utive and procedural justice because of formal organizational policies or cost constraints. Interpersonal and informational justice are less likely to be governed by these mechanisms, because providing information and treating employees with dignity are practically ‘free’.

The Queen of the United Kingdom faced the first ever industrial action by staff when uniformed wardens at Windsor Castle voted on working to rule over claims of appalling low pay and allowances. The wardens’ work specifically relates to the castle’s role as a tourist attraction and carry out roles such as protecting the exhibits, helping the public and working in the ticket office. The wardens are employees of the Royal Collection Trust and are distinct from employees of the Royal Household, who include footmen, butlers and cleaners, who work specifically for the Royal family. The wardens perceived inequity when they compared their pay to the employees of the royal household who earn up to three times more.

Contemporary theories of motivation   167

7  Apply the key tenents of expectancy theory to motivating employees. expectancy theory A theory which says that the strength of a tendency to act in a certain way depends on the strength of an expectation that the act will be followed by a given outcome and on the attractiveness of that outcome to the individual.

In such cases, managers wishing to promote fairness could focus their efforts more on informational and interpersonal justice.86 Despite all attempts to enhance fairness, perceived injustices are still likely to occur. Fairness is often subjective; what one person sees as unfair, another may see as perfectly appropriate. In general, people see allocations or procedures favouring themselves as fair.87 So, when addressing perceived injustices, managers need to focus their actions on the source of the problem. In addition, if employees feel they have been treated unjustly, having opportunities to express their frustration has been shown to reduce their desire for retribution.88 In terms of cultural differences, meta-analytic evidence shows individuals in both individualistic and collectivistic cultures prefer an equitable distribution of rewards over an equal division (everyone gets paid the same regardless of performance).89 Across nations, the same basic principles of procedural justice are respected, and workers around the world prefer rewards based on performance and skills over rewards based on seniority.90 However, in collectivist cultures employees expect rewards to reflect their individual needs as well as their performance.91 Other research suggests that inputs and outcomes are valued differently in various cultures.92 Some cultures emphasize status over individual achievement as a basis for allocating resources. Materialistic cultures are more likely to see cash compensation and rewards as the most relevant outcomes of work, whereas relational cultures will see social rewards and status as important outcomes. International managers must consider the cultural preferences of each group of employees when determining what is ‘fair’ in different contexts.

Expectancy theory One of the most widely accepted explanations of motivation is Victor Vroom’s expectancy theory.93 Although it has its critics, most of the evidence supports the theory.94 Expectancy theory argues that the strength of a tendency to act in a certain way depends on the strength of an expectation that the act will be followed by a given outcome and on the attractiveness of that outcome to the individual. In more practical terms, expectancy theory says that employees will be motivated to exert a high level of effort when they believe that effort will lead to a good performance appraisal; that a good appraisal will lead to organiz­ ational rewards such as salary increases and/or intrinsic rewards; and that the rewards will satisfy the employees’ personal goals. The theory, therefore, focuses on three relationships (see Figure 6.8): 1. Effort–performance relationship. The probability perceived by the individual that exerting

a given amount of effort will lead to performance. 2. Performance–reward relationship. The degree to which the individual believes that

performing at a particular level will lead to the attainment of a desired outcome. 3. Rewards–personal goals relationship. The degree to which organizational rewards satisfy

an individual’s personal goals or needs and the attractiveness of those potential rewards for the individual.95 Expectancy theory helps explain why a lot of workers aren’t motivated on their jobs and do only the minimum necessary to get by. This is evident when we look at the theory’s three relationships in a little more detail. We present them as questions employees need to answer in the affirmative if their motivation is to be maximized.

Individual effort

1

Figure 6.8  Expectancy theory

Individual performance

2

Organizational rewards

1

Effort–performance relationship

2

Performance–reward relationship

3

Rewards–personal goals relationship

3

Personal goals

168  6 Motivation concepts

First, if I give a maximum effort, will it be recognized in my performance appraisal? For a lot of employees, the answer is ‘no’. Why? Their skill level may be deficient, which means that no matter how hard they try, they’re not likely to be high performers. The organization’s perfor­ mance appraisal system may be designed to assess non-performance factors such as loyalty, initiative or courage, which means more effort won’t necessarily result in a higher evaluation. Another possibility is that employees, rightly or wrongly, perceive that the boss doesn’t like them. As a result, they expect a poor appraisal, regardless of effort. These examples suggest that people will only be motivated if they perceive a link between their effort and their performance. Second, if I get a good performance appraisal, will it lead to organizational rewards? Many employees see the performance–reward relationship in their job as weak. The reason is that organizations reward a lot of things besides just performance. For example, when pay is allo­ cated to employees based on factors such as seniority, being cooperative, or flattering the boss, employees are likely to see the performance–reward relationship as being weak and demotivating. Finally, if I’m rewarded, are the rewards ones that I find personally attractive? The employee works hard in the hope of getting a promotion but gets a pay rise instead. Or the employee wants a more interesting and challenging job but receives only a few words of praise. Or the employee puts in extra effort to be relocated to the company’s Paris office but instead is trans­ ferred to Singapore. These examples illustrate the importance of the rewards being tailored to individual employee needs. Unfortunately, many managers are limited in the rewards they can distribute, which makes it difficult to individualize rewards. Moreover, some managers incor­ rectly assume that all employees want the same thing, thus overlooking the motivational effects of differentiating rewards. In either case, employee motivation is submaximized. As a vivid example of how expectancy theory can work, consider stock analysts. They make their living trying to forecast a stock’s future price; the accuracy of their buy, sell or hold recommendations is what keeps them in work or gets them fired. But it’s not quite that simple. Analysts place few sell ratings on stocks, although in a steady market, by definition, as many stocks are falling as are rising. Expectancy theory provides an explanation: analysts who place a sell rating on a company’s stock have to balance the benefits they receive by being accurate against the risks they run by drawing that company’s ire. What are these risks? They include public rebuke, professional blackballing and exclusion from information. When analysts place a buy rating on a stock, they face no such trade-off because, obviously, companies love it when analysts recommend that investors buy their stock. So the incentive structure suggests the expected outcome of buy ratings is higher than the expected outcome of sell ratings, and that’s why buy ratings vastly outnumber sell ratings.96 Does expectancy theory work? Some critics suggest it has only limited use and is more valid where individuals clearly perceive effort–performance and performance–reward link­ ages.97 Because few individuals do, the theory tends to be idealistic. If organizations actually rewarded individuals for performance rather than seniority, effort, skill level and job difficulty, expectancy theory might be much more valid. However, rather than invalidating it, this criti­ cism can explain why a significant segment of the workforce exerts low effort on the job.

Integrating contemporary theories of motivation 8 Compare We’ve looked at a lot of motivation theories in this chapter. The fact that a number of these contemporary theories have been supported only complicates the matter. It would be simpler if, after theories of motivation. presenting half a dozen theories, only one was found valid. But the theories we presented are

not all in competition with one another. Because one is valid doesn’t automatically make the others invalid. In fact, many of the theories presented in this chapter are complementary. The challenge is now to tie these theories together to help you understand their interrelationships.98 Figure 6.9 presents a model that integrates much of what we know about motivation. Its basic foundation is the expectancy model shown in Figure 6.8. Let’s work through Figure 6.9. (We will look at job design closely in Chapter 7.) We begin by explicitly recognizing that opportunities can either aid or hinder individual effort. The individual effort box also has another arrow leading into it. This arrow flows out

Integrating contemporary theories of motivation   169

High nAch

Job design Equity comparison/ organizational justice O : O IA IB

Opportunity

Performance evaluation criteria

Ability

Individual effort

Individual performance Objective performance evaluation system

Organizational rewards

Reinforcement

Personal goals

Dominant needs

Goals direct behaviour

Figure 6.9  Integrating contemporary theories of motivation

of the person’s goals. Consistent with goal-setting theory, this goals–effort loop is meant to remind us that goals direct behaviour. Expectancy theory predicts that employees will exert a high level of effort if they perceive that there is a strong relationship between effort and performance, performance and rewards, and rewards and satisfaction of personal goals. Each of these relationships, in turn, is influenced by certain factors. For effort to lead to good performance, the individual must have the requisite ability to perform, and the performance appraisal system that measures the individual’s performance must be perceived as being fair and objective. The performance–reward relationship will be strong if the individual perceives that it is performance (rather than seniority, personal favourites or other criteria) that is rewarded. If cognitive evaluation theory were fully valid in the actual workplace, we would predict here that basing rewards on performance should decrease the individual’s intrinsic motivation. The final link in expectancy theory is the rewards–goals relationship. Motivation would be high to the degree that the rewards an individual received for high performance satisfied the dominant needs consistent with individual goals. A closer look at Figure 6.9 also reveals that the model considers achievement motivation, job design, reinforcement and equity theories/organizational justice. A high achiever is not motivated by an organization’s assessment of performance or organizational rewards, hence the jump from effort to personal goals for those with a high nAch. Remember, high achievers are internally driven as long as the jobs they are doing provide them with personal responsibility, feedback and moderate risks. They are not concerned with the effort–performance, performance–rewards or rewards–goal linkages. Reinforcement theory enters the model by recognizing that the organ­ ization’s rewards reinforce the individual’s performance. If management has designed a reward system that is seen by employees as ‘paying off’ for good performance, the rewards will reinforce and encourage continued good performance. Rewards also play the key part in organizational justice research. Individuals will judge the favourability of their outcomes (for example, their pay) relative to what others receive but also with respect to how they are treated: when people are disappointed in their rewards, they are likely to be sensitive to the perceived fairness of the procedures used and the consideration given to them by their supervisor.

170  6 Motivation concepts

SUMMARY The motivation theories in this chapter differ in their predictive strength. Maslow’s hierarchy, McClelland’s needs, and the two-factor theory focus on needs. None has found widespread support, although McClelland’s is the strongest, particularly regarding the relationship between achievement and productivity. Self-determination theory and cognitive evaluation theory have merits to consider. Goal-­ setting theory can be helpful but does not cover absenteeism, turnover or job satisfaction. Reinforcement theory can be helpful, but not regarding employee satisfaction or the decision to quit. Equity theory’s strongest legacy is that it provided the spark for research on organ­ izational justice, which has more support in the literature. Expectancy theory can be helpful, but assumes employees have few constraints on decision making, such as bias or incomplete information, and this limits its applicability.

IMPLICATIONS FOR MANAGERS ●

●

●

●

●

Make sure extrinsic rewards for employees are not viewed as coercive, but instead provide information about competence and relatedness. Consider goal-setting theory: clear and difficult goals often lead to higher levels of employee productivity. Consider reinforcement theory regarding quality and quantity of work, persistence of effort, absenteeism, tardiness and accident rates. Consult equity theory to help understand productivity, satisfaction, absence and turnover variables. Expectancy theory offers a powerful explanation of performance variables such as employee productivity, absenteeism and turnover.

Goals get you to where you want to be

POINT/COUNTERPOINT

POINT Of course this is a true statement. Goal-setting theory is one of the best-supported theories in all the motivation literature. Study after study has consistently shown the benefits of goals. Want to excel on a test, lose a certain amount of weight, obtain a job with a particular income level, or improve your golf game? If you want to be a high performer, merely set a specific, difficult goal and let nature take its course. That goal will dominate your attention, cause you to focus and make you try harder. All too often, people are told by others to simply ‘do their best’. Could anything be more vague? What does ‘do your

best’ actually mean? Maybe you feel that your ‘best’ on one day is to muster a grade of 50 per cent on an exam, while your ‘best’ on another day is an 80. But if you were given a more difficult goal – say, to score a 95 on the exam – and you were committed to that goal, you would ultimately perform better. Edwin Locke and Gary Latham, the researchers best known for goal-setting theory, put it best when they said: ‘The effects of goal setting are very reliable.’ In short, goal-setting theory is among the most valid and practical theories of motivation in organizational psychology.

COUNTERPOINT Sure, a lot of research has shown the benefits of goalsetting, but those studies ignore the harm that’s often done. For one, how often have you set a ‘stretch’ goal, only to see yourself later fail? Goals create anxiety and worry about reaching them, and they often create unrealistic expectations as well. Imagine those who had set a goal to earn a promotion in a

certain period of time (a specific, difficult goal), only to find themselves laid off once the recession hit. Or how about those who envisioned a retirement of leisure yet were forced to take on a part-time job or delay retirement altogether in order to continue to make ends meet. When too many things are out of our control, our difficult goals become impossible.

ETHICAL DILEMMA   171

Or, consider this: goals can lead to unethical behaviour and poorer performance. How many reports have you read over the years about sales staff using unethical tactics to achieve goals (such as targeting the elderly, misleading information, broken promises and the like)? Or what about people being so focused on achieving their own goals that they pursue these at the expense of the organization’s goals? In addition to this anecdotal evidence, research has directly linked goal-setting to cheating. We should heed the warning of

Professor Maurice E. Schweitzer – ‘Goal-setting is like a powerful medication’ – before blindly accepting that specific, difficult goal. Sources: E. A. Locke and G. P. Latham, ‘Building a practically useful theory of goal setting and task motivation’, American Psychologist, 57 (2002), pp. 705–71; A.  Tugend, ‘Expert’s advice to the goal-oriented: don’t overdo it’, New York Times, 6 October 2012, p. B5; and C. Richards, ‘Letting go of long-term goals’, New York Times, 4 August 2012.

QUESTIONS FOR REVIEW 1. What are the three key elements of motivation? 2. What are some early theories of motivation? How

applicable are they today? 3. How do the predictions of self-determination theory

apply to intrinsic and extrinsic rewards? 4. What are the implications of employee job engage­

ment for management?

5. What are the key principles of goal-setting theory,

self-efficacy theory and reinforcement theory? 6. How is organizational justice a refinement of equity

theory? 7. What are the key tenets of expectancy theory? 8. What are some contemporary theories of motivation,

and how do they compare to one another?

EXPERIENTIAL EXERCISE GOAL-SETTING TASK Purpose This exercise will help you learn how to write tangible, verifiable, measurable and relevant goals that might evolve from an MBO programme.

Time Approximately 20 to 30 minutes.

Instructions 1. Break into groups of three to five. 2. Spend a few minutes discussing your class instructor’s

3. Each group is to develop a list of five goals that,

although not established participatively with your instructor, you believe might be developed in an MBO programme at your college. Try to select goals that seem most critical to the effective performance of your instructor’s job. 4. Each group will select a leader who will share the

group’s goals with the entire class. For each group’s goals, class discussion should focus on the goals’ (a) specificity, (b) ease of measurement, (c) importance and (d) motivational properties.

job. What does he or she do? What defines good perfor­ mance? What behaviours lead to good ­performance?

ETHICAL DILEMMA EMPLOYEE MONITORING Technology is a great thing. The internet provides us with instant access to an abundance of information, and smartphones allow us to stay easily connected with others through email, texting, tweeting and conversation. Yet that ease of connectivity has also left employees feeling like they can’t leave work . . . which is becoming true. Some companies are using technology to track their employees’ activities, and some of this tracking is done

in the name of science. Bank of America Corp. wanted to learn whether face-to-face interaction made a differ­ ence to the productivity of its call-centre teams, so it asked around 100 workers to wear badges for a few weeks that tracked their whereabouts. Discovering that the most productive workers interacted most frequently with others, the company scheduled work breaks in groups rather than individually.

172  6 Motivation concepts

Other companies track employees to ensure they are hard at work. Accurate Biometrics, for example, uses computer monitoring to oversee its telecommuters. Vice-president of operations Timothy Daniels says looking at websites his employees have visited ‘enables us to keep a watchful eye without being over-invasive’. As a manager, if you have the ability to monitor your employees, how could you do so in an ethical way? First and foremost, employees should be informed their ­activities will be tracked. Second, the purpose of tracking should be made clear to employees. Are they being

­ onitored to learn something that might help them and m the organization as a whole? Or are they being monitored to ensure they never slack off? Finally, it should be made clear which behaviours are inappropriate. Taking a legitimate work break is different from spending hours on a social networking site. These guide­ lines should increase the likelihood that monitoring programmes are accepted and perceived to be fair. Sources: S. Shellenbarger, ‘Working from home without slacking off’, Wall Street Journal, 13–15 July 2012, p. 29; and R. E. Silverman, ‘Tracking sensors invade the workplace’, Wall Street Journal, 7 March 2003, www.wsj.com.

From good to great: motivation at Torfs For several decades, Belgian shoe retailer Torfs was a decent place to work. The family-owned chain of stores was fair and caring to employees. But it was a traditional ‘top-down’ company. ‘It was more, “The company says how it has to be, and the coworkers just execute”,’ recalls Els Van Keymeulen, Torfs HR Manager. ‘They have to follow.’ Things began to change in the mid-1990s under Wouter Torfs, the third-generation leader of Torfs. As part of a broad plan for the shoe company to take larger strides, Wouter Torfs started empowering his employees. He began to bring all employees together twice a year to share information about the company’s direction. And gradually these meetings became more interactive and engaging. In 2009, for example, Torfs employees were asked to help come up with the company values. They defined the values to include a family feel, a focus on results and ‘goesting’ – a Flemish word that roughly translates to ‘enthusiasm’. The company’s ‘goesting’ was in full force at the last semi-annual employee summit, when store employees were asked to get into small groups and design a sneaker. ‘Things got crazy,’ Van Keymeulen says of the activity. ‘The energy that generated was amazing.’ At the meeting, Torfs employees voted on the two best designs. The winning designs are currently in production and will be sold in all the stores – the first time Torfs will sell its own shoe. In recent years, Torfs has also beefed up its philanthropic efforts. Working with a Flemish development agency, it helped build an orphanage in South Africa in 2007 and since 2012 has provided aid to schoolchildren in Nepal. Employees

Workplace cyberbullies The emails were ‘hostile and constant’. Jane Allen, a sales representative for a medical company, would spend half a day responding to her boss, defending herself from cruel smears. It got to the point that she would dread checking her inbox for fear of the latest

CASE INCIDENT 1

have travelled to Nepal to work directly with community leaders. And when a massive earthquake shook Nepal in late April 2015, Torfs organized a fundraising campaign at its stores. The employee involvement, the excitement and the social purpose have helped fuel better business results, Van Keymeulen says. The number of shops has more than doubled from 30 stores two decades ago to 73 today. The number of employees has jumped from 235 to more than 600. Shoppers in Flanders have voted Torfs the number one shoe store for customer friendliness 10 years in a row. And revenue has doubled in the past five years, to €140 million in 2014. ‘We want to inspire customers,’ Van Keymeulen says. ‘If we want to inspire customers, we have to inspire our employees first.’

Questions 1. List the different methods Torfs is using to motivate its employees.

2. Which motivation theories described in this chapter support the use of these techniques?

3. Do you think the motivation techniques used at this chain of shoe stores would also be useful, for example, at an advertising agency? A pharmaceutical company? Or a fastfood restaurant? Source: E. Frauenheim, ‘The basics and beyond in Europe’, Great Place to Work 3 June 2015, http://www.greatplacetowork.net/publications-and-events/blogsand-news/2046-the-basics-and-beyond-in-europe

CASE INCIDENT 2 humiliation. ‘I would see an email come in [on my phone] and I’d become physically sick.’ With children and a mortgage to pay, Ms Allen, who does not want to use her real name, felt unable to quit her job. So she stuck it out until she could find a new position.

endnotes   173

‘I felt like I was in a battlefield. Always on the defence and the bullets were fired at me.’ Ultimately, it affected her ability to sleep, hit her confidence hard and led to depression. Ms Allen, who is now employed elsewhere and is considering taking her previous employer to court, feels that the emails were a form of cyberbullying, and different from conventional workplace bullying. Emails are particularly destructive, she says, as they are there to be read and reread. It meant that Ms Allen – who depended on her phone to keep in touch with head office and colleagues while out on the road – felt her persecutor was always with her. Researchers typically define workplace cyberbullying as a situation where an individual is repeatedly subjected to perceived negative acts conducted through technology – email, websites, social media – that are related to their work context. Samuel Farley of the Institute of Work Psychology at Sheffield University management school in the UK, is researching the issue. In the UK, the conciliation service Acas elaborates on how this might manifest itself in social media: ‘Inappropriate photographs, offensive or threatening comments or sensitive personal information might be posted vindictively. A manager or an employee might be targeted. The victim may, or may not, be aware that they are being bullied.’ For example, while they are likely to see a threat that is emailed to them, they may

not see comments about them on a social networking site. Gary Namie, a social psychologist and director of the Workplace Bullying Institute in the US, says cyberbullies are often aggressive in a way they never would be face to face: ‘Technology makes it so much easier to be hateful and cruel from a distance.’ Unlike bullying in person, the fact that we carry our smartphones around with us means that cyberbullies can penetrate the safe havens of people’s homes. In  some cases a cyberbully can be anonymous, unlike in Ms Allen’s situation where the perpetrator was clearly traceable. Mr Farley says that technology may exacerbate aggressive behaviour. ‘When you work remotely there is a problem of de-individuation – you focus on screens and become less empathetic. It can lead you to send something you wouldn’t say to their face.’ Nancy Willard, who works in the US on anti-bullying campaigns for children, agrees. ‘Technology tends to increase the emotional tenor. There’s potentially a greater audience – online, more people might see it.’ Many victims suffer in silence, says Mr Farley, because they perceive cyberbullying as an issue affecting younger people in school rather than working adults. Consequently, it may be an under-reported issue in the office. ‘No one knows what the levels are,’ he adds.

Source: Adapted from Jacobs, E. (2015) The workplace cyberbullies whose weapon is a smartphone, Financial Times, 4 June. © The Financial Times Limited. All Rights Reserved. Pearson Education Ltd. is responsible for providing this adaptation of the original article.

Questions 1. Of the three types of organizational justice, which one does cyberbullying most closely resemble?

3. What other negative effects for the individual and the organization might cyberbullying cause?

2. What aspects of motivation might cyberbullying reduce?

4. If you were a victim of cyberbullying, what steps would you

For example, are there likely to be effects on an employee’s self-efficacy? If so, what might those effects be?

take to try to reduce its occurrence? What strategies would be most effective? What strategies might be ineffective?

ENDNOTES 1 C. A. O’Reilly, III, ‘Organizational behavior: where we’ve been, where we’re going’, in M. R. Rosenzweig and L. W. Porter (eds), Annual Review of Psychology, vol. 42 (Palo Alto, CA: Annual Reviews, Inc., 1991), p. 431. See also M. L. Ambrose and C. T. Kulik, ‘Old friends, new faces: motivation research in the 1990s’, Journal of Management, 25, 3 (1999), pp. 231–92. 2 Salary.com (2013), ‘The 2013 wasting time at work survey: everything you’ve always wanted to know about wasting time in the office’, www.salary.com. 3 See, for instance, T. R. Mitchell, ‘Matching motivational strat­ egies with organizational contexts’, in L. L. Cummings and B. M. Staw (eds), Research in Organizational Behavior, vol. 19 (Greenwich, CT: JAI Press, 1997), pp. 60–62. 4 A. Maslow, Motivation and Personality (New York: Harper & Row, 1954).

5 G. Hofstede, ‘Motivation, leadership, and organization: do American theories apply abroad?’ Organizational Dynamics (Summer 1980), p. 55. 6 See, for example, E. E. Lawler III and J. L. Suttle, ‘A causal correla­ tion test of the need hierarchy concept’, Organizational Behavior and Human Performance, April 1972, pp. 265–87; D. T. Hall and K. E. Nougaim, ‘An examination of Maslow’s need hierarchy in an organizational setting’, Organizational Behavior and Human Performance, February 1968, pp. 12–35; A. K. Korman, J. H. Greenhaus and I. J. Badin, ‘Personnel attitudes and motivation’, in M. R. Rosenzweig and L. W. Porter (eds), Annual Review of Psychology (Palo Alto, CA: Annual Reviews, 1977), pp. 178–9; and J. Rauschenberger, N. Schmitt and J. E. Hunter, ‘A test of the need hierarchy concept by a Markov model of change in need strength’, Administrative Science Quarterly, December 1980, pp. 654–70.

174  6 Motivation concepts   7 D. T. Kenrick, V. Griskevicius, S. L. Neuberg and M. Schaller, ‘Renovating the pyramid of needs: contemporary extensions built on ancient foundations’, Perspectives on Psychological Science, 5, 3 (2010), pp. 292–314.  8 D. McGregor, The Human Side of Enterprise (New York: McGraw-Hill, 1960). For an updated analysis of Theory X and Theory Y constructs, see R. J. Summers and S. F. Cronshaw, ‘A study of McGregor’s Theory X, Theory Y and the influence of Theory X, Theory Y assumptions on causal attributions for instances of worker poor performance’, in S. L. McShane (ed.), Organizational Behavior, ASAC 1988 Conference Proceedings, vol. 9, Part 5 (Halifax, Nova Scotia, 1988), pp. 115–23.   9 F. Herzberg, B. Mausner and B. Snyderman, The Motivation to Work (New York: Wiley, 1959). 10 R. J. House and L. A. Wigdor, ‘Herzberg’s dual-factor theory of job satisfaction and motivations: a review of the evidence and criticism’, Personnel Psychology, Winter 1967, pp. 369–89; D. P. Schwab and L. L. Cummings, ‘Theories of performance and satisfaction: a review’, Industrial Relations, October 1970, pp. 403–30; and J. Phillipchuk and J. Whittaker, ‘An inquiry into the continuing relevance of Herzberg’s motivation theory,’ Engineering Management Journal, 8 (1996), pp. 15–20. 11 D. C. McClelland, The Achieving Society (New York: Van Nostrand Reinhold, 1961); J. W. Atkinson and J. O. Raynor, Motivation and Achievement (Washington, DC: Winston, 1974); D. C. McClelland, Power: The Inner Experience (New York: Irvington, 1975); and M. J. Stahl, Managerial and Technical Motivation: Assessing Needs for Achievement, Power, and Affiliation (New York: Praeger, 1986). 12 D. C. McClelland and D. G. Winter, Motivating Economic Achievement (New York: The Free Press, 1969); and J. B. Miner, N. R. Smith and J. S. Bracker, ‘Role of entrepreneurial task moti­ vation in the growth of technologically innovative firms: inter­ pretations from follow-up data’, Journal of Applied Psychology, October 1994, pp. 627–30. 13 D. C. McClelland, Power; D. C. McClelland and D. H. Burnham, ‘Power is the great motivator’, Harvard Business Review, March– April 1976, pp. 100–10; and R. E. Boyatzis, ‘The need for close relationships and the manager’s job’, in D. A. Kolb, I. M. Rubin and J. M. McIntyre, Organizational Psychology: Readings on Human Behavior in Organizations, 4th edn (Upper Saddle River, NJ: Prentice Hall, 1984), pp. 81–6. 14 D. G. Winter, ‘The motivational dimensions of leadership: power, achievement, and affiliation’, in R. E. Riggio, S. E. Murphy and F. J. Pirozzolo (eds), Multiple Intelligences and Leadership (Mahwah, NJ: Lawrence Erlbaum, 2002), pp. 119–38. 15 J. B. Miner, Studies in Management Education (New York: Springer, 1965). 16 E. Deci and R. Ryan (eds), Handbook of Self-Determination Research (Rochester, NY: University of Rochester Press, 2002); R. Ryan and E. Deci, ‘Self-determination theory and the facilita­ tion of intrinsic motivation, social development, and well-being’, American Psychologist, 55, 1 (2000), pp. 68–78; and M. Gagné and E. L. Deci, ‘Self-determination theory and work motivation’, Journal of Organizational Behavior, 26, 4 (2005), pp. 331–62. 17 See, for example, E. L. Deci, R. Koestner and R. M. Ryan, ‘A meta-analytic review of experiments examining the effects of extrinsic rewards on intrinsic motivation’, Psychological Bulletin, 125, 6 (1999), pp. 627–68; G. J. Greguras and J. M. Diefendorff, ‘Different fits satisfy different needs: linking person-environment fit to employee commitment and performance using self-deter­ mination theory’, Journal of Applied Psychology, 94, 2 (2009), pp. 465–77; and D. Liu, X. Chen and X. Yao, ‘From autonomy to creativity: a multilevel investigation of the mediating role

of harmonious passion’, Journal of Applied Psychology, 96, 2 (2011), pp. 294–309. 18 R. Eisenberger and L. Rhoades, ‘Incremental effects of reward on creativity’, Journal of Personality and Social Psychology, 81, 4 (2001), 728–41; and R. Eisenberger, W. D. Pierce and J. Cameron, ‘Effects of reward on intrinsic motivation-negative, neutral, and positive: comment on Deci, Koestner, and Ryan (1999)’, Psychological Bulletin, 125, 6 (1999), pp. 677–91. 19 M. Burgess, M. E. Enzle and R. Schmaltz, ‘Defeating the poten­ tially deleterious effects of externally imposed deadlines: prac­ titioners’ rules-of-thumb’, Personality and Social Psychology Bulletin, 30, 7 (2004), pp. 868–77. 20 K. Byron and S. Khazanchi, ‘Rewards and creative perfor­ mance: a meta-analytic test of theoretically derived hypotheses’, Psychological Bulletin, 138, 4 (2012), pp. 809–30. 21 K. M. Sheldon, A. J. Elliot and R. M. Ryan, ‘Self-concordance and subjective well-being in four cultures’, Journal of CrossCultural Psychology, 35, 2 (2004), pp. 209–23. 22 J. E. Bono and T. A. Judge, ‘Self-concordance at work: toward understanding the motivational effects of transformational l­ eaders’, Academy of Management Journal, 46, 5 (2003), pp. 554–71. 23 L. M. Graves, M. N. Ruderman, P. J. Ohlott and Todd J. Webber, ‘Driven to work and enjoyment of work: effects on managers’ outcomes’, Journal of Management, 38, 5 (2012), pp. 1655–1680. 24 J. P. Meyer, T. E. Becker and C. Vandenberghe, ‘Employee Commitment and Motivation: A Conceptual Analysis and Integrative Model’, Journal of Applied Psychology, 89, 6 (2004), pp. 991–1007. 25 W. A. Kahn, ‘Psychological conditions of personal engagement and disengagement at work’, Academy of Management Journal, 33, 4 (1990), pp. 692–724. 26 www.gallup.com/consulting/52/Employee-Engagement.aspx 27 J. K. Harter, F. L. Schmidt and T. L. Hayes, ‘Business-unit-level relationship between employee satisfaction, employee engage­ ment, and business outcomes: a meta- analysis’, Journal of Applied Psychology, 87, 2 (2002), pp. 268–79. 28 M. S. Christian, A. S. Garza and J. E. Slaughter, ‘Work engage­ ment: a quantitative review and test of its relations with task and contextual performance’, Personnel Psychology, 64, 1 (2011), pp. 89–136. 29 W. B. Schaufeli, A. B. Bakker and W. van Rhenen, ‘How changes in job demands and resources predict burnout, work engagement, and sickness absenteeism’, Journal of Organizational Behavior, 30, 7 (2009), pp. 893–917; E. R. Crawford, J. A. LePine and B. L. Rich, ‘Linking job demands and resources to employee engage­ ment and burnout: a theoretical extension and meta-­analytic test’, Journal of Applied Psychology, 95, 5 (2010), pp. 834–48; and D. Xanthopoulou, A. B. Bakker, E. Demerouti and W. B. Schaufeli, ‘Reciprocal relationships between job resources, per­ sonal resources, and work engagement’, Journal of Vocational Behavior, 74, 3 (2009), pp. 235–44. 30 B. L. Rich, J. A. LePine and E. R. Crawford, ‘Job engagement: antecedents and effects on job performance’, Academy of Management Journal, 53, 3 (2010), pp. 617–35. 31 M. Tims, A. B. Bakker and D. Xanthopoulou, ‘Do transfor­ mational leaders enhance their followers’ daily work engage­ ment?’, Leadership Quarterly, 22, 1 (2011), pp. 121–31; and F. O. Walumbwa, P. Wang, H. Wang, J. Schaubroeck and B. J. Avolio, ‘Psychological processes linking authentic leadership to follower behaviors’, Leadership Quarterly, 21, 5 (2010), pp. 901–14. 32 D. A. Newman and D. A. Harrison, ‘Been there, bottled that: are state and behavioral work engagement new and useful con­ struct “wines”?’, Industrial and Organizational Psychology, 1,

ENDNOTES   175 1 (2008), pp. 31–35; and A. J. Wefald and R. G. Downey, ‘Job engagement in organizations: fad, fashion, or folderol’, Journal of Organizational Behavior, 30, 1 (2009), pp. 141–45. 33 See, for example, Rich, LePine and Crawford, ‘Job engagement: antecedents and effects on job performance’; and Christian, Garza and Slaughter, ‘Work engagement: a quantitative review and test of its relations with task and contextual performance’. 34 J. M. George, ‘The wider context, costs, and benefits of work engagement’, European Journal of Work and Organizational Psychology, 20, 1 (2011), pp. 53–9; and J. R. B. Halbesleben, J. Harvey and M. C. Bolino, ‘Too engaged? A conservation of resources view of the relationship between work engagement and work interference with family’, Journal of Applied Psychology, 94, 6 (2009), pp. 1452–65. 35 E. A. Locke, ‘Toward a theory of task motivation and incentives’, Organizational Behavior and Human Performance, May 1968, pp. 157–89. 36 P. C. Earley, P. Wojnaroski and W. Prest, ‘Task planning and energy expended: exploration of how goals influence performance’, Journal of Applied Psychology, February 1987, pp. 107–14. 37 See M. E. Tubbs, ‘Goal setting: a meta-analytic examination of the empirical evidence’, Journal of Applied Psychology, August 1986, pp. 474–83; E. A. Locke and G. P. Latham, ‘Building a practically useful theory of goal setting and task motivation’, American Psychologist, September 2002, pp. 705–17; and E. A. Locke and G. P. Latham, ‘New directions in goal-setting theory’, Current Directions in Psychological Science, 15, 5 (2006), pp. 265–68. 38 E. A. Locke and G. P. Latham, ‘Building a practically useful theory of goal setting and task motivation: a 35-year odyssey’, American Psychologist, 57, 9 (2002), pp. 705–17. 39 J. M. Ivancevich and J. T. McMahon, ‘The effects of goal setting, external feedback, and self-generated feedback on outcome variables: a field experiment’, Academy of Management Journal, June 1982, pp. 359–72; and E. A. Locke, ‘Motivation through conscious goal setting’, Applied and Preventive Psychology, 5 (1996), pp. 117–24. 40 S. Huang, Y. Zhang and S. M. Broniarczyk, ‘So near and yet so far: the mental representation of goal progress’, Journal of Personality and Social Psychology, 103, 2 (2012), pp. 225–41. 41 K. Dewettinck and H. van Dijk, ‘Linking Belgian employee performance management system characteristics with performance management system effectiveness: exploring the mediating role of fairness’, International Journal of Human Resource Management, 1 February 2013, pp. 806–825; and M. Erez, P. C. Earley and C. L. Hulin, ‘The impact of participation on goal acceptance and performance: a two-step model’, Academy of Management Journal, 28, 1 (1985), pp. 50–66. 42 T. S. Bateman and B. Bruce, ‘Masters of the long haul: pursuing long-term work goals’, Journal of Organizational Behavior, October 2012, pp. 984–1006; and E. A. Locke, ‘The motivation to work: what we know’, Advances in Motivation and Achievement, 10 (1997), pp. 375–412. 43 Ibid. 44 J. E. Bono and A. E. Colbert, ‘Understanding responses to multi-source feedback: the role of core self-evaluations’, Personnel Psychology, 58, 1 (2005), pp. 171–203; and S. A. Jeffrey, A. Schulz and A. Webb, ‘The performance effects of an ability-based approach to goal assignment’, Journal of Organizational Behavior Management, 32 (2012), pp. 221–41. 45 A. M. O’Leary-Kelly, J. J. Martocchio and D. D. Frink, ‘A review of the influence of group goals on group performance’,

Academy of Management Journal, 37, 5 (1994), pp. 1285–301; and T. Tammemagi, D. O’Hora and K. A. Maglieri, ‘The effects of a goal setting intervention on productivity and persistence in an analogue work task’, Journal of Organizational Behavior Management, 1 (2013), pp. 31–54. 46 K. D. Vohs, J. K. Park and B. J. Schmeichel, ‘Self-affirmation can enable goal disengagement’, Journal of Personality and Social Psychology, 104, 1 (2013), pp. 14–27. 47 D. F. Crown, ‘The use of group and groupcentric individual goals for culturally heterogeneous and homogeneous task groups: an assessment of European work teams’, Small Group Research, 38, 4 (2007), pp. 489–508; J. Kurman, ‘Self-regulation strategies in achievement settings: culture and gender differences’, Journal of Cross-Cultural Psychology, 32, 4 (2001), pp. 491–503; and M. Erez and P. C. Earley, ‘Comparative analysis of goal-setting strategies across cultures’, Journal of Applied Psychology, 72, 4 (1987), pp. 658–65. 48 C. Sue-Chan and M. Ong, ‘Goal assignment and performance: assessing the mediating roles of goal commitment and self-efficacy and the moderating role of power distance’, Organizational Behavior and Human Decision Processes, 89, 2 (2002), pp. 1140–61. 49 G. P. Latham and E. A. Locke, ‘Enhancing the benefits and overcoming the pitfalls of goal setting’, Organizational Dynamics, 35, 6, pp. 332–40; L. D. Ordóñez, M. E. Schweitzer, A. D. Galinsky and M. H. Bazerman, ‘Goals gone wild: the systematic side effects of overprescribing goal setting’, Academy of Management Perspectives, 23, 1 (2009), pp. 6–16; and E. A. Locke and G. P. Latham, ‘Has goal setting gone wild, or have its attackers abandoned good scholarship?’, Academy of Management Perspectives, 23, 1 (2009), pp. 17–23. 50 S. J. Perry, L. A. Witt, L. M. Penney and L. Atwater, ‘The downside of goal-focused leadership: the role of personality in subordinate exhaustion’, Journal of Applied Psychology, 95, 6 (2010), pp. 1145–53. 51 K. Lanaj, C. D. Chang and R. E. Johnson, ‘Regulatory focus and work-related outcomes: a review and meta-analysis’, Psychological Bulletin, 138, 5 (2012), pp. 998–1034. 52 ‘Key group survey finds nearly half of all employees have no set performance goals’, IPMA-HR Bulletin, 10 March 2006, p. 1; S. Hamm, ‘SAP dangles a big, fat carrot’, Business Week, 22 May 2006, pp. 67–8; and ‘P&G CEO wields high expectations but no whip’, USA Today, 19 February 2007, p. 3B. 53 See, for instance, S. J. Carroll and H. L. Tosi, Management by Objectives: Applications and Research (New York: Macmillan, 1973); and R. Rodgers and J. E. Hunter, ‘Impact of management by objectives on organizational productivity’, Journal of Applied Psychology, April 1991, pp. 322–36. 54 See, for instance, T. H. Poister and G. Streib, ‘MBO in municipal government: variations on a traditional management tool’, Public Administration Review, January/February 1995, pp. 48–56; C. Garvey, ‘Goalsharing scores’, HRMagazine, April 2000, pp. 99–106; E. Lindberg and T. L. Wilson, ‘Management by objectives: the Swedish experience in upper secondary schools’, Journal of Educational Administration, 49, 1 (2011), pp. 62–75; and A. C. Spaulding, L. D. Gamm and J. M. Griffith, ‘Studer unplugged: identifying underlying managerial concepts’, Hospital Topics, 88, 1 (2010), pp. 1–9. 55 See, for instance, R. Rodgers, J. E. Hunter and D. L. Rogers, ‘Influence of top management commitment on management program success’, Journal of Applied Psychology, 78, 1 (1993), pp. 151–5; M. Tanikawa, ‘Fujitsu decides to backtrack on performance-based pay’, New York Times, 22 March 2001, p. W1; and W. F. Roth, ‘Is management by objectives obsolete?’, Global

176  6 Motivation concepts Business and Organizational Excellence, 28 (May/June 2009), pp. 36–43. 55 A. Bandura, Self-Efficacy: The Exercise of Control (New York: Freeman, 1997). 56 A. D. Stajkovic and F. Luthans, ‘Self-efficacy and work-related performance: a meta-analysis’, Psychological Bulletin, September 1998, pp. 240–61; and A. Bandura, ‘Cultivate self-efficacy for personal and organizational effectiveness’, in E. Locke (ed.), Handbook of Principles of Organizational Behavior (Malden, MA: Blackwell, 2004), pp. 120–36. 57 M. Salanova, S. Llorens and W. B. Schaufeli, ‘Yes I can, I feel good, and I just do it! On gain cycles and spirals of efficacy beliefs, affect, and engagement’, Applied Psychology, 60, 2 (2011), pp. 255–85.

of Applied Social Psychology, 31, 5 (2001), pp. 1017–37; and L. K. Scheer, N. Kumar and J.-B. E. M. Steenkamp, ‘Reactions to perceived inequity in U.S. and Dutch interorganizational rela­ tionships’, Academy of Management, 46, 3 (2003), pp. 303–16. 72 See, for example, R. C. Huseman, J. D. Hatfield and E. W. Miles, ‘A new perspective on equity theory: the equity sensitiv­ ity construct’, Academy of Management Journal, 12, 2 (1987), pp. 222–34; K. S. Sauley and A. G. Bedeian, ‘Equity sensitivity: construction of a measure and examination of its psychometric properties’, Journal of Management, 26, 5 (2000), pp. 885–910; and J. A. Colquitt, ‘Does the justice of one interact with the jus­ tice of many? Reactions to procedural justice in teams’, Journal of Applied Psychology, 89, 4 (2004), pp. 633–46.

60 A. Bandura, Self-Efficacy: The Exercise of Control (New York: Freeman, 1997).

73 See, for instance, J. A. Colquitt, D. E. Conlon, M. J. Wesson, C. O. L. H. Porter and K.-Y. Ng, ‘Justice at the millennium: a meta-analytic review of the 25 years of organizational jus­ tice research’, Journal of Applied Psychology, 86, 3 (2001), pp. 425–45; T. Simons and Q. Roberson, ‘Why managers should care about fairness: the effects of aggregate justice perceptions on organizational outcomes’, Journal of Applied Psychology, 88, 3 (2003), pp. 432–43; and B. C. Holtz and C. M. Harold, ‘Fair today, fair tomorrow? A longitudinal investigation of overall jus­ tice perceptions’, Journal of Applied Psychology, 94, 5 (2009), pp. 1185–99.

61 C. L. Holladay and M. A. Quiñones, ‘Practice variability and transfer of training: the role of self-efficacy generality’, Journal of Applied Psychology, 88, 6 (2003), pp. 1094–103.

74 See, for example, R. Cropanzano, J. H. Stein and T. Nadisic, Social Justice and the Experience of Emotion (New York: Routledge/Taylor and Francis Group, 2011).

62 R. C. Rist, ‘Student social class and teacher expectations: the selffulfilling prophecy in ghetto education’, Harvard Educational Review, 70, 3 (2000), pp. 266–301.

75 G. S. Leventhal, ‘What should be done with equity theory? New approaches to the study of fairness in social relationships’, in K. Gergen, M. Greenberg and R. Willis (eds), Social exchange: advances in theory and research (New York: Plenum, 1980), pp. 27–55.

58 P. Tierney and S. M. Farmer, ‘Creative self-efficacy develop­ ment and creative performance over time’, Journal of Applied Psychology, 96, 2 (2011), pp. 277–93. 59 A. Bandura and D. Cervone, ‘Differential engagement in self-­reactive influences in cognitively-based motivation’, Organizational Behavior and Human Decision Processes, August 1986, pp. 92–113.

63 D. Eden, ‘Self-fulfilling prophecies in organizations’, in J. Greenberg (ed.), Organizational Behavior: The State of the Science, 2nd edn (Mahwah, NJ: Erlbaum, 2003), pp. 91–122. 64 Ibid. 65 T. A. Judge, C. L. Jackson, J. C. Shaw, B. Scott and B. L. Rich, ‘Self-efficacy and work-related performance: the integral role of individual differences’, Journal of Applied Psychology, 92, 1 (2007), pp. 107–27. 66 Ibid. 67 K. M. Eddington, C. Majestic and P. J. Silvia, ‘Contrasting regulatory focus and reinforcement sensitivity: a daily diary study of goal pursuit and emotion’, Personality and Individual Differences, August 2012, pp. 335–40. 68 E. A. Locke, ‘Latham vs. Komaki: a tale of two paradigms’, Journal of Applied Psychology, February 1980, pp. 16–23. 69 J. S. Adams, ‘Inequity in social exchanges’, in L. Berkowitz (ed.), Advances in Experimental Social Psychology (New York: Academic Press, 1965), pp. 267–300. 70 See, for example, J. Greenberg, ‘Cognitive reevaluation of out­ comes in response to underpayment inequity’, Academy of Management Journal, March 1989, pp. 174–84; and C. Maslach and M. P. Leiter, ‘Early predictors of job burnout and engage­ ment, Journal of Applied Psychology, May 2008, pp. 498–512. 71 P. S. Goodman and A. Friedman, ‘An examination of Adams’ the­ ory of inequity’, Administrative Science Quarterly, 16, 3 (1971), pp. 271–88; R. P. Vecchio, ‘An individual-differences interpreta­ tion of the conflicting predictions generated by equity theory and expectancy theory’, Journal of Applied Psychology, 66, 4 (1981), pp. 470–81; R. T. Mowday, ‘Equity theory predictions of behavior in organizations’, in R. Steers, L. W. Porter and G. Bigley (eds), Motivation and Work Behavior, 6th edn (New York: McGrawHill, 1996), pp. 111–31; R. W. Griffeth and S. Gaertner, ‘A role for equity theory in the turnover process: an empirical test’, Journal

76 J. Brockner and B. M. Wiesenfeld, ‘An integrative framework for examining reactions to decisions: interactive effects of outcomes and procedures’, Psychological Bulletin, 120 (1996), pp. 189–208. 77 R. Folger and D. P. Skarlicki, ‘Fairness as a dependent vari­ able: why tough times can lead to bad management’, in R. Cropanzano (ed.), Justice in the Workplace: From Theory to Practice (Mahway, NJ: Erlbaum, 2001), pp. 97–118. 78 C. R. Wanberg, L. W. Bunce and M. B. Gavin, ‘Perceived fairness of layoffs among individuals who have been laid off’, Personnel Psychology, 52 (1999), pp. 59–84. 79 J. C. Shaw, E. Wild and J. A. Colquitt, ‘To justify or excuse? A meta-analytic review of the effects of explanations’, Journal of Applied Psychology, 88, 3 (2003), pp. 444–58. 80 R. J. Bies, ‘Are procedural and interactional justice conceptually distinct?’, in J. Greenberg and J. A. Colquitt (eds), Handbook of Organizational Justice (Mahwah, NJ: Erlbaum, 2005), pp. 85–112; and B. A. Scott, J. A. Colquitt and E. L. Paddock, ‘An actor-focused model of justice rule adherence and violation: the role of managerial motives and discretion’, Journal of Applied Psychology, 94, 3 (2009), pp. 756–69. 81 G. A. Van Kleef, A. C. Homan, B. Beersma, D. V. Knippenberg, B. V. Knippenberg and F. Damen, ‘Searing sentiment or cold cal­ culation? The effects of leader emotional displays on team per­ formance depend on follower epistemic motivation’, Academy of Management Journal, 52, 3 (2009), pp. 562–80. 82 J. M. Robbins, M. T. Ford and L. E. Tetrick, ‘Perceived unfair­ ness and employee health: a meta-analytic integration’, Journal of Applied Psychology, 97, 2 (2012), pp. 235–72. 83 J. A. Colquitt, B. A. Scott, J. B. Rodell, D. M. Long, C. P. Zapata, D. E. Conlon and M. J. Wesson, ‘Justice at the millennium, a dec­ ade later: a meta-analytic test of social exchange and affect-based

ENDNOTES   177 perspectives’, Journal of Applied Psychology, 98, 2 (2013), pp. 199–236. 84 B. A. Scott, J. A. Colquitt and E. L. Paddock, ‘An actor-focused model of justice rule adherence and violation: the role of managerial motives and discretion’, Journal of Applied Psychology, 94, 3 (2009), pp. 756–69. 85 Ibid. 86 K. Leung, K. Tong and S. S. Ho, ‘Effects of interactional justice on egocentric bias in resource allocation decisions’, Journal of Applied Psychology, 89, 3 (2004), pp. 405–15; and L. FrancisGladney, N. R. Manger and R. B. Welker, ‘Does outcome favorability affect procedural fairness as a result of self-serving attributions’, Journal of Applied Social Psychology, 40, 1 (2010), pp. 182–94. 87 L. J. Barclay and D. P. Skarlicki, ‘Healing the wounds of organ­ izational injustice: examining the benefits of expressive writing’, Journal of Applied Psychology, 94, 2 (2009), pp. 511–23. 88 R. Fischer and P. B. Smith, ‘Reward allocation and culture: a meta-analysis’, Journal of Cross-Cultural Psychology, 34, 3 (2003), pp. 251–68. 89 F. F. T. Chiang and T. Birtch, ‘The transferability of management practices: examining cross-national differences in reward preferences’, Human Relations, 60, 9 (2007), pp. 1293–330; A. E. Lind, T. R. Tyler and Y. J. Huo, ‘Procedural context and culture: variation in the antecedents of procedural justice judgments’, Journal of Personality and Social Psychology, 73, 4 (1997), pp. 767–80; and M. J. Gelfand, M. Erez and Z. Aycan, ‘Cross-cultural organizational behavior’, Annual Review of Psychology, 58 (2007), pp. 479–514. 90 J. K. Giacobbe-Miller, D. J. Miller and V. I. Victorov, ‘A comparison of Russian and U.S. pay allocation decisions, distributive justice judgments, and productivity under different payment conditions’, Personnel Psychology, 51, 1 (1998), pp. 137–63.

91 M. C. Bolino and W. H. Turnley, ‘Old faces, new places: equity theory in cross-cultural contexts’, Journal of Organizational Behavior, 29, 1 (2008), pp. 29–50. 92 V. H. Vroom, Work and Motivation (New York: Wiley, 1964). 93 For criticism, see H. G. Heneman III and D. P. Schwab, ‘Evaluation of research on expectancy theory prediction of employee performance’, Psychological Bulletin, July 1972, pp. 1–9; T. R. Mitchell, ‘Expectancy models of job satisfaction, occupational preference and effort: a theoretical, methodological and empirical appraisal’, Psychological Bulletin, November 1974, pp. 1053–77; and W. Van Eerde and H. Thierry, ‘Vroom’s expectancy models and work-­ related criteria: a meta-analysis’, Journal of Applied Psychology, October 1996, pp. 575–86. For support, see L. W. Porter and E. E. Lawler III, Managerial Attitudes and Performance (Homewood, IL: Irwin, 1968); and J. J. Donovan, ‘Work motivation’, in N. Anderson D. Ones, H. K. Sinangil and C. Viswesvaran (eds), Handbook of Industrial, Work & Organizational Psychology, vol. 2 (Thousand Oaks, CA: Sage, 2001), pp. 56–9. 95 Vroom refers to these three variables as expectancy, instrumentality and valence, respectively. 96 J. Nocera, ‘The anguish of being an analyst’, New York Times, 4 March 2006, pp. B1, B12. 97 R. J. House, H. J. Shapiro and M. A. Wahba, ‘Expectancy theory as a predictor of work behavior and attitudes: a re-evaluation of empirical evidence’, Decision Sciences 5, 3 (1974), pp. 481–506. 98 For other examples of models that seek to integrate motivation theories, see H. J. Klein, ‘An integrated control theory model of work motivation’, Academy of Management Review, April 1989, pp. 150–72; E. A. Locke, ‘The motivation sequence, the motivation hub, and the motivation core’, Organizational Behavior and Human Decision Processes, December 1991, pp. 288–99; and Mitchell, ‘Matching motivational strategies with organizational contexts’.

CHAPTER 7 Motivation: from concepts to applications Learning objectives After studying this chapter, you should be able to: 1 Describe the job characteristics model and the way it motivates by changing the work environment. 2 Compare the main ways jobs can be redesigned. 3 Explain how specific alternative work arrangements can motivate employees. 4 Describe how employee involvement measures can motivate employees. 5 Demonstrate how the different types of variable-pay programmes can increase employee motivation. 6 Show how flexible benefits turn benefits into motivators. 7 Identify the motivational benefits of intrinsic rewards.

Knowing is not enough, we must apply. Being willing is not enough, we must do. Leonardo Da Vinci

MOTIVATION LESSONS FROM THE BEST IN EUROPE

Northfoto/Shutterstock

The following firms have all received the ‘Best Workplace in Europe’ award and as such, stand out for their employee practices. So what lessons can we learn from them?

Microsoft Corporation: Best multinational in Europe Founded in 1975, Microsoft has offices in more than 100 countries and employs more than 90,000 people at a global level. Microsoft values work–life balance and provides its employees with a range of programmes that promote equilibrium between their personal and professional lives. One such programme is the Working Parent Policy, which is designed to address the needs of parents, and covers a range of benefits available to those who combine active professional involvement with pregnancy or childcare. Under the Working Parent Policy employees are entitled to additional days off work whenever they need to spend extra time with their children, flexible working hours and working from home options (using the latest technology solutions). Microsoft also provides free medical care for the entire family and organizes special themed events and gives presents to employees’ children.

Capital One: Best large workplace in Europe Capital One, among the UK’s largest credit card companies, vision is ‘Let’s Make Lives Better’, which applies to employees, customers, community and the environment. Capital One has a number of programmes for employees that support both personal and career growth leading to a culture of recognition and rewards. For example, team members are person-

ally thanked by the Managing Director when a department has gone the extra mile to help the business succeed. They are rewarded in a departmental celebration. To ensure that employees are connected with Capital One’s vision, the company hosts an annual Vision Day. This provides an opportunity for employees to see the ways that Capital One makes lives better and how they, as individuals, can contribute to the company vision.

Futurice: Best small and medium workplace in Europe Founded in 2000, Futurice is a Finnish software service company that develops customers’ businesses by building user-driven web and mobile services. It currently employs more than 150 people at its Helsinki headquarters and across offices in Tampere, Berlin, Düsseldorf and London. Futurice hosts monthly staff events called FutuFridays, which take place at each company office. FutuFridays always start with the Monthly Anonymous Developer (MAD) Meeting where each employee goes over his or her goals with their peers. The meeting is organized as a conversation where everyone walks through objectives and accomplishments of the past six months. Topics include: what each of the participants achieved in the last month; how they have developed and learned; and what they plan to do in the upcoming month. MAD supports Futurice company values by enhancing transparency, highlighting the importance of continuous improvement and inspiring confidence in career and professional goals by allowing employees to share them publicly.

Source: The 100 Best Workplaces in Europe 2013, Great Place to Work see: www.greatplacetowork.net

180  7 Motivation: from concepts to applications

In Chapter 6, we focused on motivation theories. In this chapter, we start applying motivation concepts to practices because while it’s important to understand the underlying concepts, it’s even more important to see how, as a manager, you can use them. The lessons from the ‘Best Workplaces in Europe’ demonstrate topics we will cover in this chapter such as alternative work arrangements, employee involvement and rewards. But we begin with job design.

REFLECTION Consider your job or if you currently do not have a job, think about your most recent work experience. What good examples of motivational techniques were used? Why do you think they were effective?

Motivating by job design: the job characteristics model 1  Describe the job characteristics model and the way it motivates by changing the work environment. job design The way the elements in a job are organized. job characteristics model ( JCM) A model that proposes that any job can be described in terms of five core job dimensions: skill variety, task identity, task significance, autonomy and feedback. skill variety The degree to which a job requires a variety of different activities. task identity The degree to which a job requires completion of a whole and identifiable piece of work. task significance The degree to which a job has a substantial impact on the lives or work of other people.

Increasingly, research on motivation focuses on approaches that link motivational concepts to changes in the way work is structured. Research in job design suggests the way the elements in a job are organized can increase or decrease effort and also suggests what those elements are. We’ll first review the job characteristics model and then discuss some ways jobs can be redesigned. Finally, we’ll explore alternative work arrangements.

The job characteristics model Developed by J. Richard Hackman and Greg Oldham, the job characteristics model ( JCM) proposes that any job can be described in terms of five core job dimensions:1 1. Skill variety is the degree to which a job requires a variety of different activities so the

worker can use a number of different skills and talents. For instance, an example of a job scoring high on skill variety would be the job of an owner-operator of a garage who does electrical repairs, rebuilds engines, does body work and interacts with customers. A job scoring low on this dimension would be the job of a body shop worker who sprays paint eight hours a day. 2. Task identity is the degree to which a job requires completion of a whole and identifiable

piece of work. An example of a job scoring high on identity would be the job of a cabinetmaker who designs a piece of furniture, selects the wood, builds the object and finishes it to perfection. A job scoring low on this dimension would be the job of a worker in a furniture factory who operates a lathe solely to make table legs. 3. Task significance is the degree to which a job has a substantial impact on the lives or work of

other people. An example of a job scoring high on significance would be the job of a nurse handling the diverse needs of patients in a hospital intensive care unit. A job scoring low on this dimension would be the job of a janitor sweeping floors in a hospital. 4. Autonomy is the degree to which a job provides substantial freedom, independence and

discretion to the individual in scheduling the work and in determining the procedures to be used in carrying it out. An example of a job scoring high on autonomy is the job of a salesperson who schedules his or her own work each day and decides on the most effective sales approach for each customer without supervision. A job scoring low on this dimension would be the job of a salesperson who is given a set of leads each day and is required to follow a standardized sales script with each potential customer. 5. Feedback is the degree to which carrying out the work activities required by a job results in

the individual obtaining direct and clear information about the effectiveness of his or her

Motivating by job design: the job characteristics model   181 autonomy The degree to which a job provides substantial freedom and discretion to the individual in scheduling the work and in determining the procedures to be used in carrying it out. feedback The degree to which carrying out the work activities required by a job results in the individual obtaining direct and clear information about the effectiveness of his or her performance.

motivating potential score (MPS) A predictive index that suggests the motivating potential in a job.

performance. An example of a job with high feedback is the job of a factory worker who assembles iPads and tests them to see if they operate properly. A job scoring low on feedback would be the job of a factory worker who, after assembling an iPad, is required to pass it to a quality-control inspector who tests it for proper operation and makes needed adjustments. Figure 7.1 presents the job characteristics model. Note how the first three dimensions – skill variety, task identity and task significance – combine to create meaningful work. That is, if these three characteristics exist in a job, the model predicts that the incumbent will view the job as being important, valuable and worthwhile. Note, too, that jobs with high autonomy give job incumbents a feeling of personal responsibility for the results and that, if a job provides feedback, employees will know how effectively they are performing. From a motivational standpoint, the JCM says that individuals obtain internal rewards when they learn (knowledge of results) that they personally (experienced responsibility) have performed well on a task that they care about (experienced meaningfulness).2 The more these three psychological states are present, the greater will be employees’ motivation, performance and satisfaction, and the lower their absenteeism and likelihood of leaving the organization. As Figure 7.1 shows, the links between the job dimensions and the outcomes are moderated or adjusted by the strength of the individual’s growth need – that is, by the employee’s desire for self-esteem and self-­actualization. This means that individuals with a high growth need are more likely to experience the psychological states when their jobs are enriched than are their counterparts with low growth need. Moreover, the individuals with a high growth need will respond more positively to the psychological states when they are present than will individuals with a low growth need. The core dimensions can be combined into a single predictive index, called the motivating potential score (MPS), which is calculated as follows: MPS 5

Skill variety 1 Task identity 1 Task significance 3 Autonomy 3 Feedback 3

Jobs that are high on motivating potential must be high on at least one of the three factors that lead to experienced meaningfulness, and they must be high on both autonomy and feedback. If jobs score high on motivating potential, the model predicts that motivation, performance and satisfaction will be positively affected and that the likelihood of absence and turnover will be reduced.

Core job dimensions Skill variety i t Task identity Task significance Autonomy

Feedback

Critical psychological states E i d Experienced meaningfulness of the work Experienced responsibility for outcomes of the work Knowledge of the actual results of the work activities

Personal and work outcomes High internal work motivation High-quality work performance High satisfaction with the work Low absenteeism and turnover

Employee growthneed strength

Figure 7.1  The job characteristics model Source: J. R. Hackman and G. R. Oldham, Work Redesign ©1980, p. 77. Adapted by permission of Pearson Education, Inc., Upper Saddle River, NJ.

182  7 Motivation: from concepts to applications

Much evidence supports the JCM concept that the presence of a set of job characteristics – variety, identity, significance, autonomy and feedback – does generate higher and more satisfying job performance.3 But we can better calculate motivating potential by simply adding the characteristics rather than using the formula. Think about your job. Do you have the opportunity to work on different tasks, or is your day routine? Are you able to work independently, or do you constantly have a supervisor or co-worker looking over your shoulder? A few studies have tested the job characteristics model in different cultures, but the results aren’t consistent. One study suggested that when employees were ‘other oriented’ (concerned with the welfare of others at work), the relationship between intrinsic job characteristics and job satisfaction was weaker. The fact that the job characteristics model is relatively individualistic (it considers the relationship between the employee and his or her work) suggests job enrichment strategies may not have the same effects in collectivistic cultures as in individualistic cultures.4 However, another study suggested the degree to which jobs had intrinsic job characteristics predicted job satisfaction and job involvement equally well for Japanese, US and Hungarian employees.5

How can jobs be redesigned? 2  Compare the main ways jobs can be redesigned.

‘Every day was the same thing,’ Frank said. ‘Stand on that assembly line. Wait for an instrument panel to be moved into place. Unlock the mechanism and drop the panel into the Jeep Liberty as it moved by on the line. Then I plugged in the harnessing wires. I repeated that for eight hours a day. I don’t care that they were paying me €20 an hour. I was going crazy. I did it for almost a year and a half. Finally, I just said to my wife that this isn’t going to be the way I’m going to spend the rest of my life. My brain was turning to jelly on that Jeep assembly line. So I quit. Now I work in a print shop and I make less than €12 an hour. But let me tell you, the work I do is really interesting. The job changes all the time, I’m continually learning new things, and the work really challenges me! I look forward every morning to going to work again.’ Frank’s job at the Jeep plant involved repetitive tasks that provided him with little variety, autonomy or motivation. In contrast, his job in the print shop is challenging and stimulating. Let’s look at some of the ways to put JCM into practice to make jobs more motivating.

Job rotation job rotation The periodic shifting of an employee from one task to another.

If employees suffer from over-routinization of their work, one alternative is job rotation, or the periodic shifting of an employee from one task to another with similar skill requirements at the same organizational level (also called cross-training). At Singapore Airlines, a ticket agent may take on the duties of a baggage handler. Extensive job rotation is among the reasons Singapore Airlines is rated one of the best airlines in the world.6 Many manufacturing firms have adopted job rotation as a means of increasing flexibility and avoiding layoffs. Managers at these companies train workers on all their equipment so they can move around as needed in response to incoming orders. Although job rotation has often been conceptualized as an activity for assembly line and manufacturing employees, many organizations use job rotation for new managers to help them get a picture of the whole business as well.7 The strengths of job rotation are that it reduces boredom, increases motivation and helps employees better understand how their work contributes to the organization. Evidence from Italy, Britain and Turkey shows that job rotation is associated with higher levels of organiz­ ational performance in manufacturing settings.8 However, job rotation has drawbacks. Training costs increase, and moving a worker into a new position reduces productivity just when efficiency at the prior job is creating organizational economies. Work that is done repeatedly may become habitual and ‘routine’, which makes decision making more automatic and efficient. Job rotation creates disruptions when members of the work group have to adjust to new employees. And supervisors may have to spend more time answering questions and monitoring the work of recently rotated employees.

Motivating by job design: the job characteristics model   183

‘Money can’t buy happiness’ In addition to this clichéd statement, you’ve probably heard the alternative: that money does buy happiness. Those who say how much money you have has no bearing on your happiness often refer to the Easterlin paradox, named after the economist Richard Easterlin who argued that once basic financial needs have been met, more money doesn’t really do much to make a person happy. Other researchers point to data that agree with Easterlin’s assertion. For example, when Robert Kenny surveyed 165 households earning €22 million or more, most said their money is not always helpful. They worried about how their children would be treated by others and whether they would be motivated to be independent. Does that mean we should stop making money because it will make us miserable? Not so fast. Recent research surveying a much broader set of people, including people in various countries, indicates the exact opposite: the more money, the better. Using data collected by the Gallup organization, economists Betsy Stevenson and Justin Wolfers of the University of Michigan found that people all over the world, from countries including France, Germany, Britain, Brazil, Japan, India, Nigeria, Iran, Russia, United States and Mexico, reported greater happiness as they grew richer. More interesting is the finding that the relationship between income and happiness doesn’t change for the very rich. So going from richer to richest increases happiness about as much as moving from

MYTH OR SCIENCE? the poorest to less poor. The authors say, ‘The relationship between well-being and income . . . does not diminish as incomes rise. If there is a satiation point, we are yet to reach it.’ The relationship between happiness and income also seems to be the same whether we look within a given country (you’re happier if you’re wealthier than your fellow citizens) or between countries (people from countries with higher per capita gross domestic product levels are happier than those from countries with lower levels). Still, Stevenson and Wolfers caution against causal inferences. Income may contribute to happiness, but happiness may also contribute to higher income if those who are cheerful and pleasant get promoted more than those who are grumpy. Says Wolfers, ‘I suspect what’s actually going on is that income is a marker for something else. It may be that what really makes us happy is leading fulfilling lives. It’s not income per se, but it’s having a broad set of choices, including the choice to have a healthy income.’ Sources: R. Easterlin, ‘Does economic growth improve the human lot? Some empirical evidence’, in P. A. David and M. W. Reder (eds), Nations and Households in Economic Growth: Essays in Honor of Moses Abramovitz (New York: Academic Press, 1974); D. Kurtzleben, ‘Finally: proof that money buys happiness (sort of)’, USNews.com, 29 April 2013; A. Novotney, ‘Money can’t buy happiness’, Monitor on Psychology, July/August 2012, pp. 24–6; B. Stevenson and J. Wolfers, ‘Subjective well-being and income: is there any evidence of satiation?’, NBER Working Paper 18992, April 2013; and ‘Money can buy happiness’, Economist. com, 2 May 2013.

Job enrichment job enrichment The vertical expansion of jobs, which increases the degree to which the worker controls the planning, execution and evaluation of the work.

Job enrichment refers to the vertical expansion of jobs. It increases the degree to which the worker controls the planning, execution and evaluation of the work. An enriched job organizes tasks so as to allow the worker to do a complete activity, increases the employee’s freedom and independence, increases responsibility and provides feedback so individuals will be able to assess and correct their own performance.9 How does management enrich an employee’s job? Figure 7.2 offers suggested guidelines based on the job characteristics model. Combining tasks takes existing and fractionalized tasks and puts them back together to form a new and larger module of work. Forming natural work units means that the tasks an employee does create an identifiable and meaningful whole. Establishing client relationships increases the direct relationships between workers and their clients (these may be an internal customer as well as someone outside the organization). Expanding jobs vertically gives employees responsibilities and control that were formerly reserved for management. Opening feedback channels lets employees know how well they are performing their jobs and whether their performance is improving, deteriorating or remaining at a constant level. To illustrate job enrichment, let’s look at what management at Bank One did with its international trade banking department.10 The department’s chief product is commercial letters of credit – essentially a bank guarantee to stand behind huge import and export transactions. Prior to enriching jobs, the department’s 300 employees processed documents in an a­ ssembly-line fashion, with errors creeping in at each handoff. Meanwhile, employees did little to hide the boredom they were experiencing from doing narrow and specialized tasks. Management enriched these jobs by making each clerk a trade expert who was able to handle a customer from start

184  7 Motivation: from concepts to applications

Suggested action

Core job dimensions

Combine tasks

Skill variety

Form natural work units

Task identity

Establish client relationships

Task significance

Expand jobs vertically

Autonomy

Open feedback channels

Feedback

Figure 7.2  Guidelines for enriching a job Source: J. R. Hackman and J. L. Suttle (eds), Improving Life at Work (Glenview, IL: Scott Foresman, 1977), p. 138. Reprinted by permission of Richard Hackman and J. Lloyd Suttle.

to finish. After 200 hours of training in finance and law, the clerks became full-­service advisers who could turn around documents in a day while advising clients on such arcane matters as bank procedures in Turkey. The results? Department productivity more than tripled, employee satisfaction soared and transaction volume rose more than 10 per cent per year. The evidence on job enrichment shows it reduces absenteeism and turnover costs and increases satisfaction, but not all programmes are equally effective.11 A review of 83 organizational interventions designed to improve performance management showed that frequent, specific feedback related to solving problems was linked to consistently higher performance, but infrequent feedback that focused more on past problems than future solutions was much less effective.12 Some recent evidence suggests job enrichment works best when it compensates for poor feedback and reward systems.13 Work design may also not affect everyone in the same way. One recent study showed employees with a higher preference for challenging work experienced larger reductions in stress following job redesign than individuals who did not prefer challenging work.14

Relational job design While redesigning jobs on the basis of job characteristics theory is likely to make work more intrinsically motivating to people, more contemporary research is focusing on how to make jobs more prosocially motivating to people. In other words, how can managers design work so employees are motivated to promote the well-being of the organization’s beneficiaries? Beneficiaries of organizations might include customers, clients, patients and users of products or services. This view of job design shifts the spotlight from the employee to those whose lives are affected by the job that employee performs.15 One way to make jobs more prosocially motivating is to better connect employees with the beneficiaries of their work, for example, by relating stories from customers who have found the company’s products or services to be helpful. The medical device manufacturer Medtronic invites people to describe how Medtronic products have improved, or even saved, their lives and shares these stories with employees during annual meetings, providing a powerful reminder of the impact of their work. One study found that radiologists who saw photographs of patients whose scans they were examining made more accurate diagnoses of their medical problems. Why? Seeing the photos made it more personal, which elicited feelings of empathy in the radiologists.16 Even better, in some cases managers may be able to connect employees directly with beneficiaries. Researchers found that when university fundraisers briefly interacted with the undergraduates who would receive the scholarship money they raised, they persisted 42 per cent longer, and raised nearly twice as much money, as those who didn’t interact with potential

Motivating by job design: the job characteristics model   185

recipients.17 The positive impact of connecting employees was apparent even when they met with just a single scholarship recipient. Why do these connections have such positive consequences? There are several reasons. Meeting beneficiaries first-hand allows employees to see that their actions affect a real, live person and that their jobs have tangible consequences. In addition, connections with beneficiaries make customers or clients more accessible in memory and more emotionally vivid, which leads employees to consider the effects of their actions more. Finally, connections allow employees to easily take the perspective of beneficiaries, which fosters higher levels of commitment. You might be wondering whether connecting employees is already covered by the idea of task significance in job characteristics theory. However, some differences make beneficiary contact unique. For one, many jobs might be perceived to be high in significance, yet employees in those jobs never meet the individuals affected by their work. Second, beneficiary contact seems to have a distinct relationship with prosocial behaviours such as helping others. One study found that lifeguards who read stories about how their actions benefited swimmers were rated as more helpful by their bosses; this was not the case for lifeguards who read stories about the personal benefits of their work.18 The upshot? There are many ways you can design jobs to be more motivating, and the choice should depend on the outcome or outcomes you’d like to achieve.

Alternative work arrangements 3  Explain how specific Another approach to motivation is to alter work arrangements with flexitime, job sharing or teleworking. These are likely to be especially important for a diverse workforce such as dualalternative work earner couples, single parents and employees caring for a sick or ageing relative. arrangements can motivate employees.

Flexitime

flexitime Flexible work hours.

Susan Ross is the classic ‘morning person’. She rises each day at 5 a.m. sharp and full of energy. However, as she puts it, ‘I’m usually ready for bed right after the 7 p.m. news.’ Susan’s work schedule as a claims processor at the Hartford Financial Services Group is flexible. It allows her some degree of freedom as to when she comes to work and when she leaves. Her office opens at 6 a.m. and closes 7 p.m. It’s up to her how she schedules her 8-hour day within this 13-hour period. Because Susan is a morning person and also has a sevenyear-old son who gets out of school at 3 p.m. every day, she opts to work from 6 a.m. to 3 p.m. ‘My work hours are perfect. I’m at the job when I’m mentally most alert, and I can be home to take care of my son after he gets out of school.’ Susan Ross’s work schedule is an example of flexitime. The term is short for ‘flexible work time’. It allows employees some discretion over when they arrive at work and when they leave. Employees have to work a specific number of hours a week, but they are free to vary the hours of work within certain limits. As shown in Figure 7.3, each day consists of a common core, usually six hours, with a flexibility band surrounding the core. For example, exclusive of a one-hour lunch break, the core may be 9 a.m. to 3 p.m with the office actually opening at 6 a.m. and closing at 6 p.m. All employees are required to be at their jobs during the common core period, but they are allowed to accumulate their other two hours before and/or after the core time. Some flexitime programmes allow extra hours to be accumulated and turned into a free day off each month. Flexitime has become a popular scheduling option. For example, in the European Union in 2009, flexitime was offered in 57 per cent of establishments. In 2013, this figure had risen Flexible hours 6

A.M.

Common core 9

A.M.

Common core

Lunch

12 noon

1

P.M.

Time during the day

Figure 7.3  Example of a flexitime schedule

Flexible hours 3

P.M.

6

P.M.

186  7 Motivation: from concepts to applications

to 66 per cent. In fact, in Germany, Belgium, the Netherlands and France, by law, employers are not allowed to refuse an employee’s request for either a part-time or a flexible work schedule as long as that request is reasonable, such as to care for an infant child.19 The UK also has ‘right to request’ flexible working legislation for all employees and it can only be declined if a business reason is provided by the employer. The benefits claimed for flexitime are numerous. They include reduced absenteeism, increased productivity, reduced overtime expenses, reduced hostility towards management, reduced traffic congestion around work sites, improved punctuality and increased autonomy and responsibility for employees – any of which may increase employee job satisfaction.20 But beyond the claims, what’s flexitime’s record? Most of the evidence stacks up favourably. Flexitime tends to reduce absenteeism and frequently improves worker productivity,21 probably for several reasons. Employees can schedule their work hours to align with personal demands, reducing tardiness and absences, and they can work when they are most productive. Flexitime can also help employees balance work and family lives; it is a popular criterion for judging how ‘family friendly’ a workplace is. Flexitime’s major drawback is that it’s not applicable to every job or every worker. It works well with clerical tasks for which an employee’s interaction with people outside his or her department is limited. It is not a viable option for receptionists, sales personnel in retail stores, or people whose service jobs require them to be at their workstations at predetermined times. It also appears that people who have a stronger desire to separate their work and family lives are less prone to take advantage of opportunities for flexitime.22 Overall, employers need to consider the appropriateness of both the work and the workers before implementing flexitime schedules.

Job sharing job sharing An arrangement that allows two or more individuals to split a traditional 40-hour-aweek job.

Job sharing allows two or more individuals to split a traditional 40-hour-a-week job. One might perform the job from 8 a.m. to noon and the other from 1 p.m. to 5 p.m., or the two could work full but alternate days. For example, top Ford engineers Julie Levine and Julie Rocco engaged in a job-sharing programme that allowed both of them to spend time with their families while working on the time-intensive job of redesigning the Explorer crossover. Typically, one of the pair would work late afternoons and evenings while the other worked mornings. They both agreed that the programme worked well, although making such a relationship work required a great deal of time and preparation.23 Job sharing is widely offered in Europe, for example by approximately 30 per cent of employers in Italy and 45 per cent in the UK. However, despite its availability, it doesn’t seem to be widely adopted by employees. For example, although 30 per cent of employers offer job sharing in Ireland, only about 6 per cent are personally involved in job sharing.24 This is probably because of the difficulty of finding compatible partners to share a job and the negative perceptions historically held of individuals not completely committed to their job and employer. Job sharing allows an organization to draw on the talents of more than one individual in a given job. A bank manager who oversees two job sharers describes it as an opportunity to get two heads but ‘pay for one’.25 It also opens up the opportunity to acquire skilled workers – for instance, women with young children and retirees – who might not be available on a full-time basis.26 Many Japanese firms are increasingly considering job sharing – but for a very different reason.27 Because Japanese executives are extremely reluctant to fire people, job sharing is seen as a potentially humanitarian means for avoiding layoffs due to overstaffing. Similarly, ­Germany’s Kurzarbeit programme, which is now close to 100 years old, has kept employment levels from plummeting throughout the economic crisis by switching full-time workers to parttime job sharing work.28 From the employee’s perspective, job sharing increases flexibility. As such, it can increase motivation and satisfaction for those to whom a full-time job is just not practical. But the major drawback from management’s perspective is finding compatible pairs of employees who can successfully coordinate the intricacies of one job.29

Motivating by job design: the job characteristics model   187

Teleworking

Ethan Miller/Getty Images

It might be close to the ideal job for many people. No commuting, flexible hours, freedom to dress as you please and few or no interruptions from colleagues. It’s called teleworking, and it refers to working at home at least two days a week on a computer linked to the employer’s office.30 (A closely related term – the virtual office – describes working from (usually) home on a relatively permanent basis.) Teleworking has been a popular topic recently as a result of Yahoo!, a company who was a pioneer in flexible working initiatives, deciding to ­eliminate it.31 It is estimated that a quarter of European workers When Yahoo! president and CEO, Marissa Mayer, announced are teleworkers (see the Face the Facts feature) although that the company was to end teleworking, it surprised many. this figure is derived from research that uses a broader Teleworking is the norm in many tech companies and they have inspired other industries to adopt similar programmes. definition of the term. British Telecom, a pioneer of So what were the reasons behind the decision? Yahoo!'s teleworking, has 15,000 employees working from home head of human resources wrote that communication and and the Automobile Association has a virtual call centre collaboration will be important as the company works to be consisting of 250 people working where they live.32 ‘more productive, efficient and fun’. To make that happen, she What kinds of jobs lend themselves to teleworking? said, ‘it is critical that we are all present in our offices. Some Three categories have been identified as most approof the best decisions and insights come from hallway and cafeteria discussions, meeting new people and impromptu priate: routine information-handling tasks, mobile team meetings’. activities and professional and other knowledge-related tasks.33 Writers, attorneys, analysts and employees who spend the majority of their time on computers or the telephone are natural candidates teleworking for teleworking. For instance, telemarketers, customer-service representatives, reservaWorking from home at tion agents and product-support specialists spend most of their time on the phone. As least two days a week ­teleworkers, they can access information on their computers at home as easily as in the on a computer that is company’s office. linked to the employer’s There are numerous stories of teleworking’s success.34 For instance, nearly a quarter of office. the staff in Telecom Italia’s Info412 call centre operation work full-time from home. They spend 15 per cent less time on calls than other staff and take 3.3 per cent more calls an hour. Employees of the Dutch subsidiary of Oracle claimed the teleworking arrangements have improved their lives. The company says it has gained €23m over five years from the reduction in space, improved productivity and higher staff retention.35 There are several potential benefits of teleworking. They include a larger labour pool from which to select, higher productivity, less turnover, improved morale and reduced officespace costs. A positive relationship exists between teleworking and supervisor performance ratings, but any relationship between teleworking and potentially lower turnover intentions has not been substantiated in research to date.36 Beyond the benefits to organizations and its employees, teleworking has potential benefits to society. One study estimates that, in the United States, if people telecommuted half the time, carbon emissions would be reduced by approximately 51 metric tons per year. Environmental savings could also come about from lower office energy consumption, fewer traffic jams that emit greenhouse gases and fewer road repairs.37 However, there are also several downsides. The major one for management is less direct supervision of employees. In today’s team-focused workplace, teleworking may make it more difficult to coordinate teamwork and can reduce knowledge transfer in organizations.38 From the employee’s standpoint, teleworking can offer a considerable increase in flexibility and job satisfaction – but not without costs.39 For employees with a high social need, teleworking can increase feelings of isolation and reduce job satisfaction. And all telecommuters are vulnerable to the ‘out of sight, out of mind’ effect.40 Employees who aren’t at their desks, who miss meetings and who don’t share in day-to-day informal workplace interactions may be at a disadvantage when it comes to pay rises and promotions.

188  7 Motivation: from concepts to applications

Teleworking in Europe ●

●

A quarter of European workers are teleworkers (defined by this study as workers who do not work all the time at their employer’s or their own business premises and who use ICT for their work). The incidence of telework varies considerably between countries, ranging from just above 5 per cent in Albania, Bulgaria, Romania and Turkey to more than 40 per cent in the Netherlands, Denmark and Sweden, and 45 per cent in Finland.

FACE THE FACTS ●

On average, teleworkers work longer hours, more often on Sundays and more often in the evenings than other workers.

●

Nearly 50 per cent of financial services are teleworkers, whereas wholesale, retail, food and accommodation is less than 15 per cent.

Source: Eurofound, Fifth European Working Conditions Survey (Luxembourg: ­Publications Office of the European Union, 2012).

The social and physical context of work Clare and Joe both graduated from college a couple years ago with degrees in education and became teachers in different school districts. Clare immediately confronted a number of obstacles: several long-term employees were hostile to her hiring, there was tension between administrators and teachers and students had little interest in learning. Joe had a colleague who was excited to work with a new graduate, students who were excited about academics and a highly supportive principal. Not surprisingly, at the end of the first year, Joe had been a considerably more effective teacher than Clare. The job characteristics model shows most employees are more motivated and satisfied when their intrinsic work tasks are engaging. However, having the most interesting workplace characteristics in the world may not always lead to satisfaction if you feel isolated from your co-workers, and having good social relationships can make even the most boring and onerous tasks more fulfilling. Research demonstrates that social aspects and work context are as important as other job design features.41 Policies such as job rotation, worker empowerment and employee participation have positive effects on productivity, at least partially because they encourage more communication and a positive social environment. Some social characteristics that improve job performance include interdependence, social support and interactions with other people outside of work. Social interactions are strongly related to positive moods and give employees opportunities to clarify their work role and how well they are performing. Social support gives employees greater opportunities to obtain assistance with their work. Constructive social relationships can bring about a positive feedback loop as employees assist one another in a ‘virtuous circle’. The work context is also likely to affect employee satisfaction. Hot, loud and dangerous work is less satisfying than work conducted in climate-controlled, relatively quiet and safe environments. This is probably why most people would rather work in a coffee shop than a metalworking foundry. Physical demands make people physically uncomfortable, which is likely to show up in lower levels of job satisfaction. To assess why an employee is not performing to his or her best level, see whether the work environment is supportive. Does the employee have adequate tools, equipment, materials and supplies? Does the employee have favourable working conditions, helpful co-workers, supportive work rules and procedures, sufficient information to make job-related decisions and adequate time to do a good job? If not, performance will suffer.

Employee involvement Employee involvement is a participative process that uses employees’ input to increase their commitment to the organization’s success. The logic is that if we engage workers in decisions that affect them and increase their autonomy and control over their work lives, they

Employee involvement   189 employee involvement A participative process that uses the input of employees and is intended to increase employee commitment to an organization’s success.

will become more motivated, more committed to the organization, more productive and more satisfied with their jobs. These benefits don’t stop with individuals – when teams are given more control over their work, morale and performance increases.42 It is important to note that employee involvement acceptance and programmes differ among countries. Those countries that have a high power-distance culture, which accepts and expects differences in authority, tend to value employee involvement less than low power-­distance countries.43

Examples of employee involvement programmes 4 Describe how employee involvement measures can motivate employees. participative management A process in which subordinates share a significant degree of decision-making power with their immediate superiors.

Let’s look at two major forms of employee involvement – participative management and representative participation – in more detail.

Participative management Common to all participative management programmes is joint decision making, in which subordinates share a significant degree of decision-making power with their immediate superiors. Participative management has, at times, been promoted as a panacea for poor morale and low productivity. For participative management to be effective, followers must have trust and confidence in their leaders. Leaders should refrain from coercive techniques and instead stress the organizational consequences of decision making to their followers.44 Studies of the participation–performance relationship have yielded mixed findings.45 Organizations that institute participative management do have higher stock returns, lower turnover rates and higher estimated labour productivity, although these effects are typically not large.46 A careful review of research at the individual level shows participation typically has only a modest influence on employee productivity, motivation and job satisfaction. Of course, this doesn’t mean participative management can’t be beneficial under the right conditions. However, it is not a sure means for improving performance.

Representative participation representative participation A system in which workers participate in organizational decision making through a small group of representative employees.

Almost every country in western Europe has some type of legislation that requires companies to practise representative participation. That is, rather than participating directly in decisions, workers are represented by a small group of employees who actually participate. Representative participation has been called ‘the most widely legislated form of employee involvement around the world’.47 The goal of representative participation is to redistribute power within an organiz­ ation, putting labour on a more equal footing with the interests of management and stockholders. The two most common forms representative participation takes are works councils and board representatives.48 Works councils are groups of nominated or elected employees who must be consulted when management makes decisions involving personnel. Board representatives are employees who sit on a company’s board of directors and represent the interests of the firm’s employees. The overall influence of representative participation on working employees seems to be minimal.49 For instance, the evidence suggests that works councils are dominated by management and have little impact on employees or the organization. And although this form of employee involvement might increase the motivation and satisfaction of the individuals who are doing the representing, there is little evidence that this trickles down to the operating employees whom they represent. Overall, ‘the greatest value of representative participation is symbolic. If one is interested in changing employee attitudes or in improving organizational performance, representative participation would be a poor choice.’50

Linking employee involvement programmes and motivation theories Employee involvement draws on a number of the motivation theories we discussed in Chapter  6. Theory Y is consistent with participative management and Theory X with the more traditional autocratic style of managing people.

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In terms of two-factor theory, employee involvement programmes could provide intrinsic motivation by increasing opportunities for growth, responsibility and involvement in the work itself. The opportunity to make and implement decisions – and then see them work out – can help satisfy an employee’s needs for responsibility, achievement, recognition, growth and enhanced self-esteem. Extensive employee involvement programmes clearly have the potential to increase employee intrinsic motivation in work tasks. And giving employees control over key decisions, along with ensuring that their interests are represented, can enhance feelings of procedural justice.

Using rewards to motivate employees 5 Demonstrate how the different types of variable-pay programmes can increase employee motivation.

Pay is not a primary factor driving job satisfaction (as we saw in Chapter 3). However, it does motivate people, and companies often underestimate the importance of pay in keeping top talent. One study found that whereas only 45 per cent of employers thought that pay was a key factor in losing top talent, 71 per cent of top performers indicated that it was a top reason.51 Given that pay is so important, we need to understand what to pay employees and how to pay them. To do that, management must make some strategic decisions. Will the organization lead, match or lag the market in pay? How will individual contributions be recognized? In this section, we consider four major strategic rewards decisions that need to be made: (1) what to pay employees (which is decided by establishing a pay structure); (2) how to pay individual employees (which is decided through variable pay plans and skill-based pay plans); (3) what benefits to offer, especially whether to offer employees choice in benefits (flexible benefits); and (4) how to construct employee recognition programmes.

Outcry over executive pay is heard everywhere Executive compensation has always been a hot topic in the media, especially following the financial crisis. Public outrage has flared over annual salaries, stock options and bonuses in the millions for CEOs. In fact, it is hard to go a day without hearing or reading about executive compensation, usually regarding CEOs of United States firms. However, the US is not alone. In Great Britain, for example, the total average pay of CEOs increased by 33 per cent in 2010, while companies’ average market value grew by 24 per cent. And a study by the London School of Economics found that a 10 per cent increase in a company’s market value was associated with a 0.2 per cent increase in worker pay but a 3 per cent increase in the chief executive’s pay. Public anger over the disparity in compensation led Prime Minister David Cameron to back calls by investors to have more control over executive pay packages. Large packages, he said, understandably ‘made people’s blood boil’.

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In China, CEOs are paid much less. When the Industrial and Commercial Bank of China made a whopping €34 billion in net profits in 2012, its chairman, Jiang Jianqing, was paid €163,000. That’s less than 1 per cent of what Lloyd Blankfein, CEO of Goldman Sachs, received. Yet Mr Jianqing’s compensation made him the highest paid among his peers running China’s other large banks. Despite the fact the Chinese executives are among the lowest paid relative to CEOs in other developed countries, their pay levels are still controversial. The Chinese public is angered over the large inequalities between CEOs and workers. However, many Chinese academics and analysts argue that CEOs in China are paid too little, making it difficult to create pay-for-performance systems that better match company profits with compensation. Sources: S. Rabinovitch, ‘China’s bosses criticised over high pay’, Financial Times, 28 April 2013; and J. Werdigier, ‘In Britain, rising outcry over executive pay that makes “people’s blood boil”,’ New York Times, 23 January 2012, p. B5.

What to pay: establishing a pay structure There are many ways to pay employees. The process of initially setting pay levels can be rather complex and entails balancing internal equity – the worth of the job to the organization

Using rewards to motivate employees   191

(usually established through a technical process called job evaluation) – and external equity – the external competitiveness of an organization’s pay relative to pay elsewhere in its industry (usually established through pay surveys). Obviously, the best pay system pays the job what it is worth (internal equity) while also paying competitively relative to the labour market. Some organizations prefer to be pay leaders by paying above the market, while some may lag the market because they can’t afford to pay market rates, or they are willing to bear the costs of paying below market (namely, higher turnover as people are lured to better-paying jobs). Some companies, such as Walt Disney and McDonalds, have realized gains in income and profit margins partially by holding down employee wages.52 Pay more, and you may get better-qualified, more highly motivated employees who will stay with the organization longer. A study covering 126 large organizations found employees who believed they were receiving a competitive pay level had higher morale and were more productive, and customers were more satisfied as well.53 But pay is often the highest single operating cost for an organization, which means that paying too much can make the organiz­ ation’s products or services too expensive. It’s a strategic decision an organization must make, with clear trade-offs.

How to pay: rewarding individual employees through variable-pay programmes

variable-pay programme A pay plan that bases a portion of an employee’s pay on some individual and/or organizational measure of performance.

‘Why should I put any extra effort into this job?’ asked Anne Garcia, a schoolteacher. ‘I can excel or I can do the bare minimum. It makes no difference. I get paid the same. Why do anything above the minimum to get by?’ Comments similar to Anne’s have been voiced by schoolteachers for decades because pay increases were tied to seniority. Recently, however, a number of countries have begun revamping their schoolteacher compensation systems to motivate people like Anne to strive for excellence in their jobs. For instance, England and Wales have introduced programmes that tie teacher pay partly to the performance of the students in their classrooms. A number of organizations – business firms as well as school’s and other government ­agencies – are moving away from paying people based solely on credentials or length of service and towards using variable-pay programmes. Piece-rate plans, merit-based pay, bonuses, ­profit-sharing, gainsharing and employee stock ownership plans are all forms of variable-pay programmes which base a portion of an employee’s pay on some individual and/or organiz­ ational measure of performance. Earnings therefore fluctuate up and down with the measure of performance.54 A survey of European pay systems found that over half of the organizations studied used some form of variable pay. The most common variable components of pay were also the most traditional: extra pay for overtime (which is an element of pay for roughly one third of employees) and other forms of extra pay, for example, for poor working conditions. Across Europe, piece rate payment is relatively common in the East, but less so in western Europe. Profit sharing is quite common in Slovakia, France, Luxembourg, the Netherlands, Slovenia and Sweden but is rare in most southern European countries and in Hungary and Romania.55 Variable-pay plans have long been used to compensate salespeople and executives. More recently they have begun to be applied to other employees. IBM, Pizza Hut, Cisco and Obiettivo Lavoro are just a few examples of companies using variable pay with rank-and-file employees.56 Unfortunately, survey data indicates that most employees still don’t see a strong connection between pay and performance. Only 29 per cent say that when they do a good job, their performance is rewarded.57 It is precisely the fluctuation in variable pay that has made these programmes attractive to management. It turns part of an organization’s fixed labour costs into a variable cost, thus reducing expenses when performance declines. In addition, when pay is tied to performance, the employee’s earnings recognize contribution rather than being a form of entitlement. Low performers find, over time, that their pay stagnates, while high performers enjoy pay increases commensurate with their contributions. Let’s examine the different types of variable-pay programmes in more detail.

Monkey Business Images / Shutterstock

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The England and Wales performance-related pay scheme motivates teachers by basing their pay partly on their performance in raising student achievement rather than on seniority or degrees. The move towards rewarding teachers with bonuses for their individual performance follows the widespread adoption of variable-pay plans in many businesses and government agencies.

Piece-rate pay piece-rate pay plan A pay plan in which workers are paid a fixed sum for each unit of production completed.

Piece-rate wages have been popular for more than a century as a means of compensating production workers. In piece-rate pay plans, workers are paid a fixed sum for each unit of production completed. When an employee gets no base salary and is paid only for what they produce, this is a pure piece-rate plan. People who work picking fruit are frequently paid this way. The harder they work and the more fruit they pick, the more they earn. The limitation of these plans is that they’re not feasible for many jobs. For example, top football managers can earn upwards of €5 million per year. That salary is paid regardless of how many games are won. Would it be better to pay, for example, €400,000 for each win? It would be unlikely that a coach would accept such a deal, and it may cause unanticipated consequences as well (such as cheating). So, although incentives are motivating and relevant, for some jobs, it is unrealistic to think they can constitute the only piece of some employees’ pay.

Merit-based pay merit-based pay plan A pay plan based on performance appraisal ratings.

Merit-based pay plans pay for individual performance. However, unlike piece-rate plans, which pay based on objective output, merit-based pay plans are based on performance appraisal ratings. A main advantage of merit pay plans is that they allow employers to differentiate pay based on performance so that those people thought to be high performers are given bigger rises. The plans can be motivating because, if they are designed correctly, individuals perceive a strong relationship between their performance and the rewards they receive. The evidence supports the importance of this linkage.58 Most large organizations have merit pay plans, especially for salaried employees. IBM’s merit pay plan, for example, provides increases to employees’ base salary based on their annual performance evaluation. Since the 1990s, when the economy stumbled badly, an increasing number of Japanese companies have abandoned seniority-based pay in favour of merit-based pay. Koichi Yanashita, of Takeda Chemical Industries, commented, ‘The merit-based salary system is an important means to achieve goals set by the company’s top management, not just a way to change wages.’59

Using rewards to motivate employees   193

In an effort to motivate and retain top performers, more companies are increasing the differential between top and bottom performers. The consulting firm Hewitt Associates found that employers gave their best performers roughly 10 per cent pay rises, compared to 3.6 per cent for average performers and 1.3 per cent for below-average performers. They’ve also found that these differences have increased over time. Martyn Fisher of Imperial Chemical in the United Kingdom said that his company has widened the merit pay gap between top and average performers because, ‘as much as we would regret our average performers leaving, we’d regret more an above-target performer leaving’.60 Despite the intuitive appeal of pay for performance, merit pay plans have several limitations. One of them is that, typically, such plans are based on an annual performance appraisal. Thus, the merit pay is as valid or invalid as the performance ratings on which it is based. Another limitation of merit pay is that sometimes the pay rise pool fluctuates based on economic conditions or other factors that have little to do with an individual employee’s performance. One year, a colleague at a top university who performed very well in teaching and research was given a pay rise of €150. Why? Because the pay rise pool was very small. Yet that is hardly pay-for-performance. Finally, unions typically resist merit pay plans. For example, negotiations over a collective agreement for the ground staff of Austrian Airlines came to a standstill for several months after company management sought to introduce a merit pay scheme. The scheme was strongly opposed by trade unions and by the works council, which threatened to take industrial action.61

Bonuses bonus A pay plan that rewards employees for recent performance rather than historical performance.

For many top jobs, annual bonuses are a significant component of the total compensation. For example, the average base salary for CEO’s of Europe’s largest firms was about €2m in 2014, but actual earnings were over €5m when bonuses were included.62 Although a very significant amount, European CEOs are, on average, less well off than their American counterparts. In 2013, CEOs of the European energy firms Shell, BP and Statoil were paid €10m, €3.7m and €1.85m respectively. Over the same period CEOs of the US energy firms Exxon, Chevron and ConocoPhillips received €24.5m, €21m and €20m respectively.63 Increasingly, bonus plans are casting a larger net within organizations to include lower-ranking employees. Many companies now reward all employees with bonuses when company profits improve. Or a bonus may simply be a ‘thank you’ from a generous boss. Leonardo Del Vecchio, the founder and chairman of Italian eyewear company Luxottica, which owns the LensCrafters and Pearle Vision chains and brands like Ray-Ban and Oakley, celebrated his 80th birthday in 2015 by giving around 8,000 Italian employees 140,000 shares of company stock amounting to €9 million.64 The incentive effects of performance bonuses should be higher than those of merit pay because, rather than paying for performance years ago (that was rolled into base pay), bonuses reward recent performance. When times are bad, firms can cut bonuses to reduce compensation costs. Workers on Wall Street, for example, saw their average bonus drop by more than a third in 2012 as their firms faced greater scrutiny.65 This example also highlights the downside of bonuses: employees’ pay is more vulnerable to cuts. This is problematic when bonuses are a large percentage of total pay or when employees take bonuses for granted. ‘People have begun to live as if bonuses were not bonuses at all but part of their expected annual income,’ said Jay Lorsch, a Harvard Business School professor. KeySpan Corp., a 9,700-employee utility company in New York, tried to combine yearly bonuses with a smaller merit-pay rise. Elaine Weinstein, KeySpan’s senior vice president of HR, credits the plan with changing the culture from ‘entitlement to meritocracy’.66 Recent research has shown that the way bonuses and rewards are categorized also affects peoples’ motivation. Dividing rewards and bonuses into multiple categories – even if those categories are meaningless – makes people work harder. Why? Because they are more likely to feel as if they ‘missed out’ on a reward if they don’t receive one from each category. Although admittedly a bit manipulative sounding, taking rewards and bonuses and splitting them into categories may increase motivation.67

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Skill-based pay skill-based pay A pay plan that sets pay levels on the basis of how many skills employees have or how many jobs they can do.

Skill-based pay is an alternative to job-based pay. Rather than having an individual’s job title define their pay category, skill-based pay (also called competency-based or knowledge-based pay) sets pay levels on the basis of how many skills employees have or how many jobs they can  do.68 For instance, New Look, a UK women’s fashion retailer, reduced absence of the distribution centre staff by 33 per cent and improved productivity by 53 per cent by introducing skill-based pay. Four levels of pay were created which employees attained by demonstrating competence in core and specialist skills, such as being able to multi-task.69 For employers, the lure of skill-based pay plans is that they increase the flexibility of the workforce: filling staffing needs is easier when employee skills are interchangeable. Skill-based pay also facilitates communication across the organization because people gain a better understanding of each others’ jobs. One study found that across 214 different organizations, skill-based pay was related to higher levels of workforce flexibility, positive attitudes, membership behaviours and productivity.70 Another study found that over five years, a skill-based pay plan was associated with higher levels of individual skill change and skill maintenance.71 These results suggest that skill-based pay plans are effective in achieving their stated goals. What about the downside of skill-based pay? People can ‘top out’ – that is, they can learn all the skills the programme calls for them to learn. This can frustrate employees after they’ve become challenged by an environment of learning, growth and continual pay rises. There is also a problem created by paying people for acquiring skills for which there may be no immediate need. This happened at IDS Financial Services.72 The company found itself paying people more money even though there was little immediate use for their new skills. IDS eventually dropped its skill-based pay plan and replaced it with one that equally balances individual contribution and gains in work-team productivity. Finally, skill-based plans don’t address the level of performance. They deal only with whether someone can perform the skill.

Profit-sharing plans profit-sharing plan An organizationwide programme that distributes compensation based on some established formula designed around a company’s profitability.

Profit-sharing plans are organization-wide programmes that distribute compensation based on

some established formula designed around a company’s profitability. These can be direct cash outlays or, particularly in the case of top managers, allocations of stock options. When you read about executives like Oracle’s Larry Ellison earning €85 million, much of it (€80 million) comes from stock options previously granted based on company profit performance.73 Or, take Facebook’s Mark Zuckerberg, who despite accepting a US$1 salary, made a whopping €2 billion in 2012 after cashing out 60,000 stock options.74 Not all profit-sharing plans, though, need be so grand in scale. Jacob Luke, 13, started his own lawn-mowing business after getting a mower from his uncle. Jacob employs his brother, Isaiah and friend, Marcel Monroe, and pays them each 25 per cent of the profits he makes on each garden. Profit-sharing plans at the organizational level appear to have positive impacts on employee attitudes; employees report a greater feeling of psychological ownership.75

Gainsharing gainsharing A formula-based group incentive plan.

employee stock ownership plan (ESOP) A company-established benefits plan in which employees acquire stock, often at belowmarket prices, as part of their benefits.

Gainsharing is a formula-based group incentive plan that uses improvements in group productivity from one period to another to determine the total amount of money allocated.76 Its popularity seems narrowly focused among large manufacturing companies, although some health care organizations have experimented with it as a cost-saving mechanism. Gainsharing differs from profit sharing in tying rewards to productivity gains rather than profits, so employees can receive incentive awards even when the organization isn’t profitable. Because the benefits accrue to groups of workers, high performers pressure weaker ones to work harder, improving performance for the group as a whole.77

Employee stock ownership plans Employee stock ownership plans (ESOPs) are company-established benefit plans in which

employees acquire stock, often at below-market prices, as part of their benefits. Companies as varied as the John Lewis Partnership and Le Monde are now over 50 per cent employee

Using rewards to motivate employees   195

owned. Across Europe ESOPs vary in popularity. About 7 per cent of employees in Germany and Austria own shares of their own companies, whereas the ratio is 20 to 30 per cent in the UK and Ireland, and considerably higher in France.78 Research on ESOPs indicates they increase employee satisfaction and innovation.79 But their impact on performance is less clear. ESOPs have the potential to increase employee job satisfaction and work motivation, but employees need to psychologically experience ownership.80 That is, in addition to their financial stake in the company, they need to be kept regularly informed of the status of the business and have the opportunity to influence it in order to significantly improve the organization’s performance.81 ESOP plans for top management can reduce unethical behaviour. CEOs are more likely to manipulate firm earnings reports to make themselves look good in the short run when they don’t have an ownership share, even though this manipulation will eventually lead to lower stock prices. However, when CEOs own a large amount of stock, they report earnings accurately because they don’t want the negative consequences of declining stock prices.82

Evaluation of variable pay Do variable-pay programmes increase motivation and productivity? Studies generally support the idea that organizations with profit-sharing plans have higher levels of profitability than those without them.83 Profit-sharing plans have also been linked to higher levels of employee affective commitment, especially in small organizations.84 One study found that whereas piecerate pay-for-performance plans stimulated higher levels of productivity, this positive affect was not observed for risk-averse employees. Thus, economist Ed Lazear seems generally right when he says, ‘Workers respond to prices just as economic theory predicts. Claims by sociologists and others that monetizing incentives may actually reduce output are unambiguously refuted by the data.’ But that doesn’t mean everyone responds positively to variable-pay plans.85 You’d probably think individual pay systems such as merit pay or pay-for-performance work better in individualistic cultures such as the UK, Netherlands, Belgium or Italy, and group-based rewards such as gainsharing or profit sharing work better in collectivistic cultures such as Greece or Turkey. Unfortunately, there isn’t much research on the issue. One recent study did suggest that employee beliefs about the fairness of a group incentive plan were more predictive of pay satisfaction in the United States (individualist) than in Hong Kong (collectivist). One interpretation is that US employees are more critical in appraising a group pay plan, and therefore, it’s more critical that the plan be communicated clearly and administered fairly.86

Most UK employees say green benefits would increase their loyalty to employers UK workers would welcome their employers being more environmentally responsible and providing them with more ‘green’ benefits, a survey has found. Of 1,000 employees surveyed by HR consultancy Ceridian, 69 per cent said it was important that their employer was environmentally responsible, with more than half wishing their organization would do more. More than a third of all workers surveyed felt that receiving greener benefits would make them more loyal to their employer. Fourteen per cent would change jobs for a greener benefits package. The top three most attractive ‘green’ benefits would be incentives to move to sustainable electricity/energy

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(67  per  cent), access to discounts on ‘green’ recycled products (65 per cent) and discounts on public transport (59 per cent). Doug Sawers, managing director of Ceridian, said: ‘People today recognize they need to do more to ensure the long-term survival of our planet and employees appear to be keen to do their bit when backed by like-minded employers.’ Source: M. Berry, Personnel Today, 23 April 2007. Available at http://www.person neltoday.com/articles/2007/04/23/40308/most-uk-employees-say-green-­ benefits-would-increase-their-loyalty-to-employers.html. Accessed 12 October 2008.

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Flexible benefits: developing a benefits package 6  Show how flexible benefits turn benefits into motivators.

flexible benefits A benefits plan that allows each employee to put together a benefits package individually tailored to their own needs and situation.

Todd and Allison both work for Citigroup, but they have very different needs in terms of employee benefits. Todd is married and has three young children and a wife who is at home full-time. Allison, too, is married, but her husband has a high-paying job with the government and they have no children. Todd is concerned about having a good medical plan and enough life insurance to support his family in case it’s needed. In contrast, Allison’s husband already has her medical needs covered on his plan, and life insurance is a low priority for both Allison and her husband. Allison is more interested in extra vacation time and long-term financial benefits such as a tax-deferred savings plan. A standardized benefits package for all employees at Citigroup would be unlikely to satisfactorily meet the needs of both Todd and Allison. Citigroup could, however, cover both sets of needs if it offered flexible benefits. Consistent with expectancy theory’s thesis that organizational rewards should be linked to each individual employee’s goals, flexible benefits individualize rewards by allowing each employee to choose the compensation package that best satisfies his or her current needs and situation. These plans replace the ‘one-benefit-plan-fits-all’ programmes designed for a male with a wife and two children at home that dominated organizations for more than 50 years.87 Fewer than 10 per cent of employees now fit this image: about 25 per cent are single, and one-third are part of two-income families with no children. Flexible benefits can accommodate differences in employee needs based on age, marital status, spouses’ benefit status, and number and age of dependents. The three most popular types of benefits plans are modular plans, core-plus options and flexible spending accounts.88 Modular plans are predesigned packages or modules of benefits, each of which meets the needs of a specific group of employees. A module designed for single employees with no dependents might include only essential benefits. Another, designed for single parents, might have additional life insurance, disability insurance and expanded health coverage. Core-plus plans consist of a core of essential benefits and a menu-like selection of others from which employees can select. Typically, each employee is given ‘benefit credits’, which allow the purchase of additional benefits that uniquely meet his or her needs. Flexible spending plans allow employees to set aside pretax pay up to the amount offered in the plan to spend on particular benefits, such as health care and dental premiums. Flexible benefits are popular. For example a survey of firms in the UK found that nearly all major organizations were offering flexible benefits programmes, with options ranging from private supplemental medical insurance to holiday trading, discounted bus travel and child care vouchers.89 But they are not as common in other parts of Europe. One reason is that some countries have more stringent legislation and influence by the state. In Italy and France, for example, all benefits are mandated and have to be negotiated with work councils. However, despite the differences, the outlook is that flexible benefits are becoming more widely used globally.90

Intrinsic rewards: employee recognition programmes 7  Identify the motivational benefits of intrinsic rewards.

Laura makes only €8 per hour working at a fast-food restaurant and the job isn’t very challenging or interesting. Yet Laura talks enthusiastically about her job, her boss and the company that employs her. ‘What I like is the fact that Guy [her supervisor] appreciates the effort I make. He compliments me regularly in front of the other people on my shift, and I’ve been chosen Employee of the Month twice in the past six months. Did you see my picture on that plaque on the wall?’ Organizations are increasingly recognizing what Laura knows: important work rewards can be both intrinsic and extrinsic. Rewards are intrinsic in the form of employee recognition programmes and extrinsic in the form of compensation systems. In this section, we deal with ways in which managers can reward and motivate employee performance. Employee recognition programmes range from a spontaneous and private ‘thank you’ up to widely publicized formal programmes in which specific types of behaviour are encouraged

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Using rewards to motivate employees   197

Ensuring staff are continually motivated and engaged is critical for organisations and brings many benefits such as retaining the best talent and providing excellent service to customers. An important motivational tool is employee recognition. Traditionally these are management-run schemes that often involve a bonus and certificate based on outstanding performance. But it has been argued that this approach is out-dated and inconsistent. Many organisations are now moving towards peer-run employee recognition programmes where all employees and managers can recognize each other quickly and easily through online platforms.

and the procedures for attaining recognition are clearly identified. Some research has suggested that whereas financial incentives may be more motivating in the short term, in the long run, nonfinancial incentives are more motivating.91 The hospitality company Marriott has an employee award called ‘The Spirit to Serve Award’ that honours associates that have been singled out by guests with specific praise. Employees are given certificates with gold bars at the top and a new gold bar is added every time a piece of praise is received.92 In contrast, most managers use a more informal approach. Liz, an early years teacher and team leader, frequently brings her team cakes and sends text messages explaining how much their efforts are appreciated. A few years ago, 1,500 employees were surveyed in a variety of work settings to find out what they considered to be the most powerful workplace motivator. Their response? Recognition, recognition and more recognition.93 An obvious advantage of recognition programmes is that they are inexpensive (praise, of course, is free!).94 It shouldn’t be surprising, therefore, to find that employee recognition programmes have grown in popularity. A survey of 391 companies found that 84 per cent had some programme to recognize worker achievements and that 4 in 10 said they were doing more to foster employee recognition than they had been just a year earlier.95 Despite the increased popularity of employee recognition programmes, critics argue that these programmes are highly susceptible to political manipulation by management.96 When applied to jobs where performance factors are relatively objective, such as sales, recognition programmes are likely to be perceived by employees as fair. However, in most jobs, the criteria for good performance aren’t self-evident, which allows managers to manipulate the system and recognize their favourite employees. Abuse of such a system can undermine the value of recognition programmes and lead to demoralizing employees.

198  7 Motivation: from concepts to applications

SUMMARY As we’ve seen in the chapter, the study of what motivates individuals is ultimately key to organizational performance. Employees whose differences are recognized, who feel valued and who have the opportunity to work in jobs that are tailored to their strengths and interests will be motivated to perform at the highest levels. Employee participation also can increase employee productivity, commitment to work goals, motivation and job satisfaction.

IMPLICATIONS FOR MANAGERS ●

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Recognize individual differences. Spend the time necessary to understand what’s important to each employee. Design jobs to align with individual needs and maximize their motivation potential. Use goals and feedback. You should give employees firm, specific goals, and they should get feedback on how well they are faring in pursuit of those goals. Allow employees to participate in decisions that affect them. Employees can contribute to setting work goals, choosing their own benefits packages, and solving productivity and quality problems. Link rewards to performance. Rewards should be contingent on performance, and employees must perceive the link between the two. Check the system for equity. Employees should perceive that experience, skills, abilities, effort and other obvious inputs explain differences in performance and hence in pay, job assignments and other obvious rewards.

Being in the office matters

POINT/COUNTERPOINT

POINT Although allowing employees to work from home is gaining popularity, teleworking is a practice that will only hurt them and their employers. Sure, employees say they’re happier when their organization allows them the flexibility to work wherever they choose, but who wouldn’t like to hang around at home in their pyjamas pretending to work? I know plenty of colleagues who say, with a wink, that they’re taking off to ‘work from home’ the rest of the day. Who knows whether they are really contributing? The bigger problem is the lack of face-to-face interaction between employees. Studies have shown that great ideas are born through interdependence, not independence. It’s during those informal interactions around the water cooler or during

coffee breaks that some of the most creative ideas arise. If you take that away, you stifle the organization’s creative potential. Trust is another problem. Ever trust someone you haven’t met? I didn’t think so. Again, face-to-face interactions allow people to establish trusting relationships more quickly, which fosters smoother social interactions and allows the company to perform better. But enough about employers. Employees also would benefit by burning the midnight oil at the office. If you’re out of sight, you’re out of mind. Want that big pay rise or promotion? You’re not going to get it if your supervisor doesn’t even know who you are. So think twice the next time you either want to leave the office early or not bother coming in at all, to ‘work from home’.

COUNTERPOINT Please. So-called face-time is overrated. If all managers do is reward employees who hang around the office the longest, they aren’t being very good managers. Those who brag about the 80 hours they put in at the office (being sure to point out they were there on weekends) aren’t necessarily the top

performers. Being present is not the same thing as being efficient. Besides, there are all sorts of benefits for employees and employers who take advantage of teleworking practices. For one, it’s seen as an attractive perk companies can offer.

EXPERIENTIAL EXERCISE   199

With so many dual-career earners, the flexibility to work from home on some days can go a long way towards achieving a better balance between work and family. That translates into better recruiting and better retention. In other words, you’ll get and keep better employees if you offer the ability to work from home. Plus, studies have shown that productivity is higher, not lower, when people work from home.

You say all these earth-shattering ideas would pour forth if people interacted. I say consider that one of the biggest workplace distractions is chatty co-workers. So, although I concede there are times when ‘face-time’ is beneficial, the benefits of teleworking far outweigh the drawbacks. Sources: J. Surowiecki, ‘Face time’, The New Yorker, 18 March 2013; and L. Taskin and F. Bridoux, ‘Telework: a challenge to knowledge transfer in organizations’, International Journal of Human Resource Management, 21, 13 (2010), pp. 2503–20.

QUESTIONS FOR REVIEW 1. What is the job characteristics model? How does it

4. What are employee involvement programmes? How

motivate employees?

might they increase employee motivation?

2. What are the major ways that jobs can be redesigned?

5. What is variable pay? What are the variable-pay

In your view, in what situations would one of the methods be favoured over the others?

programmes that are used to motivate employees? What are their advantages and disadvantages?

3. What are the three alternative work arrangements of

flexitime, job sharing and teleworking? What are the advantages and disadvantages of each?

6. How can flexible benefits motivate employees? 7. What are the motivational benefits of intrinsic rewards?

EXPERIENTIAL EXERCISE ASSESSING EMPLOYEE MOTIVATION AND SATISFACTION USING THE JOB CHARACTERISTICS MODEL Purpose

Background

This exercise will help you examine outcomes of the job characteristics model for different professions.

Data were collected on 6,930 employees in 56 different organizations using the Job Diagnostic Survey. The following table contains data on the five core job dimensions of the job characteristics model for several professions. Also included are growth-needs strength, internal

Time Approximately 30 to 45 minutes.

Job characteristics averages for six professions Profession Variable

Professional/Technical

Managerial

Sales

Service

Clerical

Machine trades

Skill variety

5.4

5.6

4.8

5.0

4.0

5.1

Task identity

5.1

4.7

4.4

4.7

4.7

4.9

Task significance

5.6

5.8

5.5

5.7

5.3

5.6

Autonomy

5.4

5.4

4.8

5.0

4.5

4.9

Feedback

5.1

5.2

5.4

5.1

4.6

4.9

Growth needs strength

5.6

5.3

5.7

5.4

5.0

4.8

Internal motivation

5.8

5.8

5.7

5.7

5.4

5.6

Pay satisfaction

4.4

4.6

4.2

4.1

4.0

4.2

Source: J. R. Hackman, G. R. Oldham, Work Redesign, © 1980, p. 317. Adapted by permission of Pearson Education, Inc., Upper Saddle River, New Jersey.

200  7 Motivation: from concepts to applications

motivation, and pay satisfaction for each profession. The values are averages based on a seven-point scale.

Instructions 1. Break into groups of three to five. 2. Calculate the MPS score for each of the professions

and compare them. Discuss whether you think these scores accurately reflect your perceptions of the motivating potential of these professions.

3. Graph the relationship between each profession’s core

job dimensions and its corresponding value for internal motivation and for pay satisfaction, using the core job dimensions as independent variables. What conclusions can you draw about motivation and satisfaction of employees in these professions? Source: Adapted from J. R. Hackman and G. R. Oldham, Work Redesign (Reading, MA: Addison-Wesley, 1980).

ETHICAL DILEMMA HOW MUCH TO PAY – THE MINIMUM WAGE OR A LIVING WAGE? The disparity between the wages of workers in different countries has long been recognized and debated. One study compared the wage rates of McDonald’s cashiers and crew in 27 different countries. In India the hourly wage was €0.21 compared to €5.67 in Japan. These differences tend to be explained away by the companies involved by referring to vastly different costs of living. Another study gives a richer picture of economic inequality by looking at the proportion of household income that is spent on food. In Denmark, the Netherlands and Switzerland it is less than 20 per cent. In Armenia and Nigeria it is over 80 per cent. Vociferous debate continues on how much organizations should pay in the countries they operate – the minimum wage (if the country has one) or a living wage. Definitions of a living wage differ, but it is generally considered to refer to the amount necessary to provide a basic standard of living. But it is not just across borders where this is a factor. The Living Wage Foundation campaigns for a living wage for the people of London and the rest of the UK. They argue that the cost of living is higher in London compared to other parts of the UK and want employers to pay London staff, in 2014, €12.85 per hour, about three euros above the UK national

The most boring job in the world? Jeremy Campbell loathes his job. He stands on the corner of a busy street in a large city holding a sign that reads ‘Golf Sale Today’. The advertisement is for a store located just off the main street that sells, unsurprisingly, golfing equipment. For this store, every working day there is a ‘sale’. Nobody knows this more than Jeremy after having held the sign 10 hours a day, six days per week, for almost a year. His day begins at

minimum wage. The living wage for those in other parts of the UK is calculated as about €11 by the Foundation.

Questions 1. Do you believe organizations should pay a living wage

rather than the minimum wage? Why? 2. Imagine you are working in a company that wants

to pay its employees in Asia a living wage. However, to be able to afford it, it will have to significantly cut the wages of its employees in other parts of the world – yours included. The firm has decided to let its employees decide by voting for or against. How would you vote? 3. If you were setting the pay scales of a British-based

company, would you pay Londoners more? What effect on motivation might this have on workers in the rest of the country? Sources: O. Ashenfelter and S. Jurajda, ‘Cross-country comparisons of wage rates: The Big Mac Index (Mimeo)’, Princeton University and CERGE-EI/ Charles University, 2001. Available at: http://economics.uchicago.edu/ download/bigmac.pdf); Global wage report 2008/9 (Geneva: International Labour Office, 2008); The Living Wage Foundation, see http://www. livingwage.org.uk/. Accessed 19/06/2015.

CASE INCIDENT 1 9 a.m. when the store opens and finishes at 8 p.m. when it closes. He is allowed three breaks per day, 15 minutes in the morning, 30 minutes for lunch, and then another 15 minutes in the afternoon. Jeremy is not allowed to listen to music, talk on his mobile phone, or while away the hours in any other manner than hold the sign and try to entice customers into the shop.

case incident 2   201

‘It’s awful,’ moans Jeremy. ‘Every day it is the same, boring routine. I seriously don’t think I can stand it much longer. If it wasn’t for the money I would have packed it in months ago. How much I can actually earn came as quite a shock when I first started. I get €5 for every customer I get into the shop who buys something. On a busy day, I can earn around €300.’ Jeremy’s boss, Helen Brosnahan, wants him to stay. ‘Before Jeremy came along we had real trouble finding the right person for the job and when we did, they would often leave after only a few days. People don’t take the job seriously. But we are a small business and this is one of the few marketing activities we can afford. And besides, it really works. If we just have a sign, people walk past it. But if we have someone holding the sign and talking to people, our sales are much better.’ Helen doesn’t want to lose Jeremy but doesn’t know what she must do to motivate him. And things have just gotten

more complex. Jeremy’s first child, Melissa Rose, has just been born.

Questions 1. Analyse Jeremy’s job according to the Job Characteristics Model.

2. How can the job be redesigned to make it more motivating?

3. Are there any alternative work arrangements that may help?

4. What pay plan is being used to reward Jeremy? Is it appropriate or is there an alternative that you believe may be more motivating?

5. Does Jeremy’s job appeal to you? Why or why not?

CASE INCIDENT 2

Wearables at work: the new frontier of employee surveillance? by Sarah O’Connor He only had himself to blame, Mike Weston thought ruefully as he strapped a Fitbit to his wrist one cold February morning. His company was about to start tracking him 24 hours a day, gathering data on everything from his sleep quality and heart rate to his location and web browsing habits. ‘I was really quite grumpy about it, I didn’t want to put myself on display like that,’ he says. But as chief executive of Profusion, a data science consultancy, he had been urging his team of number crunchers to plan more ambitious internal projects – and this was the one they had come up with. For 10 days, Profusion’s data scientists used Fitbits and other apps to track 171 personal metrics for 31 staff who volunteered (including the somewhat reluctant Mr Weston). Combing through the data, the analysts found they could group the staff into clusters, based on shared patterns of behaviour. They labelled one group ‘Busy and Coping’, another ‘Irritated and Unsettled’. Technology has made it possible for employers to monitor employees more closely than ever, from GPS trackers for delivery drivers to software that tracks which websites office workers visit. Companies such as Profusion think wearable gadgets could open a new

frontier in workplace analytics, albeit one that would further blur the lines between our work and private lives. ‘I think there’s an inevitability that it will gain ground, and there’s a backlash risk that will follow if the data get abused,’ says Mr Weston. For employers, the simplest way to use wearable gadgets (and so far the most common) is to give them to staff and try to nudge them into healthier lifestyles. BP, for example, gives Fitbits to workers and offers them rewards if they meet activity targets. Indeed, one of Fitbit’s five strategic goals is to ‘further penetrate the corporate wellness market’, according to its IPO prospectus. Chris Brauer, a senior lecturer at Goldsmiths, University of London, who runs experiments with wearables in workplaces, predicts a future in which managers have dashboards that display real-time employee biometrics such as sleep quality that are leading indicators for performance. ‘It becomes a predictive tool and possibly also a prescriptive one.’ For Mike Weston of Profusion, the reaction of his staff to their wearables experiment was as interesting as

202  7 Motivation: from concepts to applications

the data it produced. Some found it enlightening and useful, while others found it ‘quite disturbing’. One ended up ‘the most stressed I’ve ever seen her’. As for him? ‘I still don’t know if I love it, but I haven’t taken it off.’ The writer of this article wondered how this technology – if it did take off at work – would affect the way people felt about their jobs and lives. So she tried it out. Chris Brauer set her up with some of the wearables he uses in his experiments, from a sleep and activity

monitor (Misfit) to a ‘mood ring’ that says it measures emotional intensity (Moodmetric). She vowed to show the data they generated to her boss after the trial. The result, ‘It was a strange week. Like most people, I tend to worry about whether I’m doing a good job, but suddenly I had new things to fret about. Would my managers think I was sleeping enough? Too much? Should I go for a jog or sleep an extra hour? Unlike normal work worries, I couldn’t leave these behind at the office.’

Source: O’Connor, S. (2015) Wearables at work: the new frontier of employee surveillance? FT.com, 8 June. © The Financial Times Limited. All Rights Reserved.

Questions 1. Using what you have learned about motivation in Chapters 6 and 7, evaluate the use of wearables as a motivational tool.

3. Would you be comfortable being monitored in this way? Explain your answer.

2. Are there any ethical issues involved in the use of wear­ ables? What might they be?

ENDNOTES  1 J. R. Hackman and G. R. Oldham, ‘Motivation through the design of work: test of a theory’, Organizational Behavior and Human Performance, August 1976, pp. 250–79; and J. R. Hackman and G. R. Oldham, Work Redesign (Reading, MA: Addison-Wesley, 1980).   2 J. R. Hackman, ‘Work design’, in J. R. Hackman and J. L. Suttle (eds), Improving Life at Work (Santa Monica, CA: Goodyear, 1977), p. 129.   3 See B. T. Loher, R. A. Noe, N. L. Moeller and M. P. Fitzgerald, ‘A meta-analysis of the relation of job characteristics to job satisfaction’, Journal of Applied Psychology, 70, 2 (1985), pp. 280–9; S. J. Zaccaro and E. F. Stone, ‘Incremental validity of an empirically based measure of job characteristics’, Journal of Applied Psychology, 73, 2 (1988), pp. 245–52; J. R. Rentsch and R. P. Steel, ‘Testing the durability of job characteristics as predictors of absenteeism over a six-year period’, Personnel Psychology, 51, 2 (1998), pp. 165–90; S. J. Behson, E. R. Eddy and S. J. Lorenzet, ‘The importance of the critical psychological states in the job characteristics model: a meta-analytic and structural equations modeling examination’, Current Research in Social Psychology, 51, 12 (2000), pp. 170–89; and S. E. Humphrey, J. D. Nahrgang and F. P. Morgeson, ‘Integrating motivational, social, and contextual work design features: a meta-analytic summary and theoretical extension of the work design literature’, Journal of Applied Psychology, 92, 5 (2007), pp. 1332–56.   4 B. M. Meglino and A. M. Korsgaard, ‘The role of other orientation in reactions to job characteristics’, Journal of Management, 33, 1 (2007), pp. 57–83.   5 M. F. Peterson and S. A. Ruiz-Quintanilla, ‘Cultural socialization as a source of intrinsic work motivation’, Group & Organization Management, 28, 2 (2003), pp. 188–216.  6 Skytrax website review of Singapore Airlines, www.airlinequality.com/Airlines/SQ.htm. Accessed 31 May 2013.

 7 T. Silver, ‘Rotate your way to higher value’, Baseline, March/ April 2010, p. 12; and J. J. Salopek, ‘Coca-Cola division refreshes its talent with diversity push on campus’, Workforce Management Online, March 2011, www.workforce.com.  8 A. Christini and D. Pozzoli, ‘Workplace practices and firm performance in manufacturing: a comparative study of Italy and Britain’, International Journal of Manpower, 31, 7 (2010), pp. 818–42; and K. Kaymaz, ‘The effects of job rotation practices on motivation: a research on managers in the automotive organizations’, Business and Economics Research Journal, 1, 3 (2010), pp. 69–86.   9 Hackman and Oldham, Work Redesign. 10 Cited in U.S. News & World Report, 31 May 1993, p. 63. 11 See, for example, R. W. Griffin, ‘Effects of work redesign on employee perceptions, attitudes, and behaviors: a long-term investigation’, Academy of Management Journal, 34, 2 (1991), pp. 425–35; and M. Subramony, ‘A meta-analytic investigation of the relationship between HRM bundles and firm performance’, Human Resource Management, 48, 5 (2009), pp. 745–68. 12 R. D. Pritchard, M. M. Harrell, D. Diaz Granados and M. J. Guzman, ‘The productivity measurement and enhancement system: a meta-analysis’, Journal of Applied Psychology, 93, 3 (2008), pp. 540–67. 13 F. P. Morgeson, M. D. Johnson, M. A. Campion, G. J. Medsker and T. V. Mumford, ‘Understanding reactions to job redesign: a quasi-experimental investigation of the moderating effects of organizational contact on perceptions of performance behavior’, Personnel Psychology, 59, 2 (2006), pp. 333–63. 14 F. W. Bond, P. E. Flaxman and D. Bunce, ‘The influence of psychological flexibility on work redesign: mediated moderation of a work reorganization intervention’, Journal of Applied Psychology, 93, 3 (2008), pp. 645–54.

ENDNOTES   203 15 A. M. Grant, ‘Leading with meaning: beneficiary contact, prosocial impact, and the performance effects of transformational leadership’, Academy of Management Journal, 55 (2012), pp. 458–76; and A. M. Grant and S. K. Parker, ‘Redesigning work design theories: the rise of relational and proactive perspectives’, Annals of the Academy of Management, 3, 1 (2009), pp. 317–75. 16 Y. N. Turner, I. Hadas-Halperin and D. Raveh, ‘Patient photos spur radiologist empathy and eye for detail’, paper presented at the annual meeting of the Radiological Society of North America, November 2008. 17 A. M. Grant, E. M. Campbell, G. Chen, K. Cottone, D. Lapedis and K. Lee, ‘Impact and the art of motivation maintenance: the effects of contact with beneficiaries on persistence behavior’, Organizational Behavior and Human Decision Processes, 103, 1 (2007), pp. 53–67. 18 A. M. Grant, ‘The significance of task significance: job performance effects, relational mechanisms, and boundary conditions’, Journal of Applied Psychology, 93 (2008), pp. 108–24. 19 Eurofound, Third European Company Survey – Overview report: Workplace practices – patterns, performance and wellbeing (Luxembourg: Publications Office of the European Union, 2015); R. Waring, ‘Sunday dialogue: flexible work hours’, New York Times, 19 January 2013. 20 D. R. Dalton and D. J. Mesch, ‘The impact of flexible scheduling on employee attendance and turnover’, Administrative Science Quarterly, June 1990, pp. 370–87; K. S. Kush and L. K. Stroh, ‘Flexitime: myth or reality’, Business Horizons, September– October 1994, p. 53; and L. Golden, ‘Flexible work schedules: what are we trading off to get them?’, Monthly Labor Review, March 2001, pp. 50–5; S. Westcott, ‘Beyond flextime: trashing the workweek’, Inc., August 2008, p. 30. 21 See, for example, D. A. Ralston and M. F. Flanagan, ‘The effect of flexitime on absenteeism and turnover for male and female employees’, Journal of Vocational Behavior, 26, 2 (1985), pp. 206–17; B. B. Baltes, T. E. Briggs, J. W. Huff, J. A. Wright and G. A. Neuman, ‘Flexible and compressed workweek schedules: a meta-analysis of their effects on work-related criteria’, Journal of Applied Psychology, 84, 4 (1999), pp. 496–513; K. M. Shockley and T. D. Allen, ‘When flexibility helps: another look at the availability of flexible work arrangements and work–family conflict’, Journal of Vocational Behavior, 71, 3 (2007), pp. 479–93; J. G. Grzywacz, D. S. Carlson and S. Shulkin, ‘Schedule flexibility and stress: linking formal flexible arrangements and perceived flexibility to employee health’, Community, Work, and Family, 11, 2 (2008), pp. 199–214; and L. A. McNall, A. D. Masuda and J. M. Nicklin, ‘Flexible work arrangements, job satisfaction, and turnover intentions: the mediating role of work-to-family enrichment’, Journal of Psychology, 144, 1 (2010), pp. 61–81. 22 K. M. Shockley and T. D. Allen, ‘Investigating the missing link in flexible work arrangement utilization: an individual difference perspective’, Journal of Vocational Behavior, 76, 1 (2010), pp. 131–42. 23 J. LaReau, ‘Ford’s 2 Julies share devotion – and job’, Automotive News, 25 October 2010), p. 4. 24 H. Mulligan (2006) ‘Attitudes of employers and employees to the changing workplace’; P. Domenico (1998) ‘Job-sharing introduced in Italy’; J. Parker (2007) ‘Changing work organization results in mixed effects’. All available at European Foundation for the Improvement of Living and Working Conditions, http:// www.eurofound.europa.eu/. 25 S. Shellenbarger, ‘Two people, one job: it can really work’, Wall Street Journal, 7 December, 1994, p. B1.

26 ‘Job-sharing: widely offered, little used’, Training, November 1994, p. 12. 27 C. Dawson, ‘Japan: work-sharing will prolong the pain’, BusinessWeek, 24 December 2001, p. 46. 28 P. R. Gregory, ‘Why Obama cannot match Germany’s jobs miracle’, Forbes, 5 May 2013, www.forbes.com/sites/­ paulroderickgregory/2013/05/05/why-obama-cannotmatch-­ germanys-jobs-miracle/. 29 Shellenbarger, ‘Two people, one job’. 30 See, for example, E. J. Hill, M. Ferris and V. Martinson, ‘Does it matter where you work? A comparison of how three work venues (traditional office, virtual office, and home office) influence aspects of work and personal/family life’, Journal of Vocational Behavior, 63, 2 (2003), pp. 220–41; B. Williamson, ‘Managing virtual workers’, Bloomberg Businessweek, 16 July 2009, www.businessweek.com; and B. A. Lautsch and E. E. Kossek, ‘Managing a blended workforce: telecommuters and non-telecommuters’, Organizational Dynamics, 40, 1 (2010), pp. 10–17. 31 B. Belton, ‘Best Buy copies Yahoo!, reins in telecommuting’, USA Today, 6 March 2013). 32 ‘Being in remote control; cutting risks’, The Times, 23 June 2008, p. 7; ‘Home working: Why can’t everyone telework?, BBC Magazine, 2 June 2011, see http://www.bbc.com/news/magazine-11879241. 33 Cited in R. W. Judy and C. D’Amico, Workforce 2020 (Indianapolis, IN: Hudson Institute, 1997), p. 58. 34 Cited in Wells, ‘Making teleworking work’. 35 A. Maitland, ‘Attractions of an out of office experience: Management: A large-scale study shows teleworking offers a range of benefits’, Financial Times, 5 November 2003, p. 12. 36 E. E. Kossek, B. A. Lautsch and S. C. Eaton, ‘Teleworking, control, and boundary management: correlates of policy use and practice, job control, and work-family effectiveness’, Journal of Vocational Behavior, 68, 2 (2006), pp. 347–67. 37 J. Kotkin, ‘Marissa Mayer’s misstep and the unstoppable rise of teleworking’, Forbes, 26 March 2013. 38 J. M. Stanton and J. L. Barnes-Farrell, ‘Effects of electronic performance monitoring on personal control, task satisfaction, and task performance’, Journal of Applied Psychology, 81, 6 (1996), pp. 738–45; and L. Taskin and F. Bridoux, ‘Telework: a challenge to knowledge transfer in organizations’, International Journal of Human Resource Management, 21, 13 (2010), pp. 2503–20. 39 See, for example, P. Brotherton, ‘For teleworkers, less is definitely more’, T&D Magazine, 65 (March 2011), p. 29; and M. Virick, N. DaSilva, and K. Arrington, ‘Moderators of the curvilinear relation between extent of teleworking and job and life satisfaction: the role of performance outcome orientation and worker type’, Human Relations, 63, 1 (2010), pp. 137–54. 40 J. Welch and S. Welch, ‘The importance of being there’, BusinessWeek, 16 April 2007), p. 92; Z. I. Barsness, K. A. Diekmann and M. L. Seidel, ‘Motivation and opportunity: the role of remote work, demographic dissimilarity, and social network centrality in impression management’, Academy of Management Journal, 48, 3 (2005), pp. 401–19. 41 F. P. Morgeson and S. E. Humphrey, ‘The Work Design Questionnaire (WDQ): developing and validating a comprehensive measure for assessing job design and the nature of work’, Journal of Applied Psychology, 91, 6 (2006), pp. 1321–39; S. E. Humphrey, J. D. Nahrgang and F. P. Morgeson, ‘Integrating motivational, social, and contextual work design features: a meta-analytic summary and theoretical extension of the work design literature’, Journal of Applied Psychology, 92, 5 (2007),

204  7 Motivation: from concepts to applications pp. 1332–56; and R. Takeuchi, D. P. Lepak, H. Wang and K. Takeuchi, ‘An empirical examination of the mechanisms mediating between high-performance work systems and the performance of Japanese organizations’, Journal of Applied Psychology, 92, 4 (2007), pp. 1069–83. 42 See, for example, the increasing body of literature on empowerment, such as D. P. Ashmos, D. Duchon, R. R. McDaniel Jr and J. W. Huonker, ‘What a mess! Participation as a simple managerial rule to ‘complexify’ organizations’, Journal of Management Studies, 39, 2 (2002), pp. 189–206; S. E. Seibert, S. R. Silver and W. A. Randolph, ‘Taking empowerment to the next level: a multiple-level model of empowerment, performance, and satisfaction’, Academy of Management Journal, 47, 3 (2004), pp. 332–49; M. M. Butts, R. J. Vandenberg, D. M. DeJoy, B. S. Schaffer and M. G. Wilson, ‘Individual reactions to high involvement work processes: investigating the role of empowerment and perceived organiz­ ational support’, Journal of Occupational Health Psychology, 14, 2 (2009), pp. 122–36; R. Park, E. Applebaum and D. Kruse, ‘Employee involvement and group incentives in manufacturing companies: a multi- level analysis’, Human Resource Management Journal, 20, 3 (2010), pp. 227–43; D. C. Jones, P. Kalmi and A. Kauhanen, ‘How does employee involvement stack up? The effects of human resource management policies in a retail firm’, Industrial Relations, 49, 1 (2010), pp. 1–21; and M. T. Maynard, L. L. Gilson and J. E. Mathieu, ‘Empowerment – fad or fab? A multilevel review of the past two decades of research’, Journal of Management, 38, 4 (2012), pp. 1231–81. 43 C. Robert, T. M. Probst, J. J. Martocchio, R. Drasgow and J. J. Lawler, ‘Empowerment and continuous improvement in the United States, Mexico, Poland, and India: predicting fit on the basis of the dimensions of power distance and individualism’, Journal of Applied Psychology, 85, 5 (2000), pp. 643–58. 44 J. J. Caughron and M. D. Mumford, ‘Embedded leadership: how do a leader’s superiors impact middle-management performance?’, Leadership Quarterly, June 2012, pp. 342–53. 45 See, for instance, K. L. Miller and P. R. Monge, ‘Participation, satisfaction, and productivity: a meta-analytic review’, Academy of Management Journal, December 1986, pp. 727–53; J. A. Wagner III, ‘Participation’s effects on performance and satisfaction: a reconsideration of research evidence’, Academy of Management Review, 19, 2 (1994), pp. 312–30; C. Doucouliagos, ‘Worker participation and productivity in labor-managed and participatory capitalist firms: a meta-analysis’, Industrial and Labor Relations Review, 49, 1 (1995), pp. 58–77; J. A. Wagner III, C. R. Leana, E. A. Locke and D. M. Schweiger, ‘Cognitive and motivational frameworks in U.S. research on participation: a meta-analysis of primary effects’, Journal of Organizational Behavior, 18, 1 (1997), pp. 49–65; A. Pendleton and A. Robinson, ‘Employee stock ownership, involvement, and productivity: an interaction-based approach’, Industrial and Labor Relations Review, 64, 1 (2010), pp. 3–29. 46 D. K. Datta, J. P. Guthrie, and P. M. Wright, ‘Human resource management and labor productivity: does industry matter?’ Academy of Management Journal, 48, 1 (2005), pp. 135–45; C. M. Riordan, R. J. Vandenberg and H. A. Richardson, ‘Employee involvement climate and organizational effectiveness’, Human Resource Management, 44, 4 (2005), pp. 471–88; and J. Kim, J. P. MacDuffie and F. K. Pil, ‘Employee voice and organizational performance: team versus representative influence’, Human Relations, 63, 3 (2010), pp. 371–94. 47 Cotton, Employee Involvement, p. 114. 48 See, for example, M. Gilman and P. Marginson, ‘Negotiating European works council: contours of constrained choice’, Industrial Relations Journal, March 2002, pp. 36–51; J. T. Addison and C.

R. Belfield, ‘What do we know about the new European Works Council? Some preliminary evidence from Britain’, Scottish Journal of Political Economy, September 2002, pp. 418–44; and B. Keller, ‘The European company statute: employee involvement – and beyond’, Industrial Relations Journal, December 2002, pp. 424–45. 49 Cotton, Employee Involvement, pp. 129–30, 139–40. 50 Ibid., p. 140. 51 E. White, ‘Opportunity knocks, and it pays a lot better’, Wall Street Journal, 13 November 2006, p. B3. 52 D. A. McIntyre and S. Weigley, ‘8 companies that most owe workers a raise’, USA Today, 13 May 2013, www.usatoday. com/stor y/money/business/2013/05/12/8-companiesthat-most-owe-workers-a-raise/2144013/. 53 M. Sabramony, N. Krause, J. Norton and G. N. Burns, ‘The relationship between human resource investments and organ­ izational performance: a firm-level examination of equilibrium theory’, Journal of Applied Psychology, 93, 4 (2008), pp. 778–88. 54 Based on J. R. Schuster and P. K. Zingheim, ‘The new variable pay: key design issues’, Compensation & Benefits Review, March–April 1993, p. 28; K. S. Abosch, ‘Variable pay: do we have the basics in place?’, Compensation & Benefits Review, July– August 1998, pp. 12–22; and K. M. Kuhn and M. D. Yockey, ‘Variable pay as a risky choice: determinants of the relative attractiveness of incentive plans’, Organizational Behavior and Human Decision Processes, March 2003, pp. 323–41. 55 Fourth European Working Conditions Survey, European Foundation for the Improvement of Living and Working Conditions, 2007. Available at http://www.eurofound.europa.eu. 56 W. Zellner, ‘Trickle-down is trickling down at work’, BusinessWeek, 18 March 1996, p. 34; ‘Linking pay to performance is becoming a norm in the workplace’, Wall Street Journal, 6 April 1999, p. A1; D. Coletto (2005) ‘Company agreements signed at Manpower and Obiettivo Lavoro’, European industrial relations observatory online. Available at: http://www.eurofound.europa. eu/eiro/2005/08/feature/it0508201f.htm; ‘Best workplaces’, Financial Times, special report, 28 May 2008, www.ft.com/bestworkplaces2008. 57 Cited in ‘Pay programs: few employees see the pay-for-performance connection’, Compensation & Benefits Report, June 2003, p. 1. 58 M. Fein, ‘Work measurement and wage incentives’, Industrial Engineering, September 1973, pp. 49–51. For updated reviews of the effect of pay on performance, see G. D. Jenkins Jr, N. Gupta, A. Mitra and J. D. Shaw, ‘Are financial incentives related to performance? A meta-analytic review of empirical research’, Journal of Applied Psychology, October 1998, pp. 777–87; and S. L. Rynes, B. Gerhart and L. Parks, ‘Personnel psychology: performance evaluation and pay for performance’, Annual Review of Psychology, 56, 1 (2005), pp. 571–600. 59 E. Arita, ‘Teething troubles aside, merit-based pay catching on’, Japan Times, 23 April 2004, http://search.japantimes.co.jp/ cgi-bin/nb20040423a3.html. 60 E. White, ‘The best vs. the rest’, Wall Street Journal, 30 January 2006, pp. B1, B3. 61 G. Adams (2007) ‘Dispute over future pay scheme at Austrian Airlines’. Available at: http://www.eurofound.europa.eu/ eiro/2007/06/articles/at0706029i.htm. 62 Towers Watson, ‘CEO pay in the Eurotop 100’, 23 July 2014, https://www.towerswatson.com/en-GB/Insights/IC-Types/ Survey-Research-Results/2014/07/2014-CEO-pay-in-the-Eurotop-100-insights-similarities-and-differences-across-Europe

ENDNOTES   205 63 S. Williams, J. Scheck and A. Peaple, ‘Investor concerns grow over European oil chief executives’ pay’, Wall Street Journal, 6 November 2014. 64 K. Martinez-Carter, ‘Living large: the most generous bosses’, BBC Capital, 17 June 2015. 65 P. Furman, ‘Ouch! Top honchos on Wall Street see biggest cuts to bonuses’, New York Daily News, 18 February 2013. 66 E. White, ‘Employers increasingly favor bonuses to raises’, Wall Street Journal, 28 August 2006, p. B3; and J. S. Lublin, ‘Boards tie CEO pay more tightly to performance’, Wall Street Journal, 21 February 2006, pp. A1, A14. 67 S. S. Wiltermuth and F. Gino, ‘“I’ll have one of each”: how separating rewards into (meaningless) categories increases motivation’, Journal of Personality and Social Psychology, January 2013, pp. 1–13. 68 G. E. Ledford Jr, ‘Paying for the skills, knowledge, and competencies of knowledge workers’, Compensation & Benefits Review, July–August 1995, pp. 55–62; B. Murray and B. Gerhart, ‘An empirical analysis of a skill-based pay program and plant performance outcomes’, Academy of Management Journal, February 1998, pp. 68–78; J. R. Thompson and C. W. LeHew, ‘Skill-based pay as an organizational innovation’, Review of Public Personnel Administration, Winter 2000, pp. 20–40; and J. D. Shaw, N. Gupta, A. Mitra and G. E. Ledford Jr, ‘Success and survival of skill-based pay plans’, Journal of Management, February 2005, pp. 28–49. 69 S. Weekes, ‘Turnover turnaround’, Personnel Today, 10 February 2004. 70 A. Mitra, N. Gupta, and J. D. Shaw, ‘A comparative examination of traditional and skill-based pay plans’, Journal of Managerial Psychology, 26, 4 (2011), pp. 278–96. 71 E. C. Dierdorff and E. A. Surface, ‘If you pay for skills, will they learn? Skill change and maintenance under a skill-based pay system’, Journal of Management, 34, 4 (2008), pp. 721–43. 72 ‘Tensions of a new pay plan’, New York Times, 17 May 1992, p. F5. 73 C. Vanderborg, ‘Oracle’s Larry Ellison tops list of highest paid CEO’s’, International Business Times, 8 April 2013, www. ibtimes.com/oracles-larry-ellison-tops-list-highest-paid-ceosphotos-1177217. 74 ‘Mark Zuckerberg reaped $2.3 billion on Facebook stock options’, Huffington Post, 26 April 2013, www.huffingtonpost. com. 75 N. Chi and T. Han, ‘Exploring the linkages between formal ownership and psychological ownership for the organization: the mediating role of organizational justice’, Journal of Occupational and Organizational Psychology, 81, 4 (2008), pp. 691–711. 76 See, for instance, D. O. Kim, ‘Determinants of the survival of gainsharing programs’, Industrial & Labor Relations Review, 53, 1 (1999), pp. 21–42; ‘Why gainsharing works even better today than in the past’, HR Focus, April 2000, pp. 3–5; L. R. Gomez-Mejia, T. M. Welbourne and R. M. Wiseman, ‘The role of risk sharing and risk taking under gainsharing’, Academy of Management Review, 25, 3 (2000), pp. 492–507; M. Reynolds, ‘A cost-reduction strategy that may be back’, Healthcare Financial Management , January 2002, pp. 58–64; M. R. Dixon, L. J. Hayes and J. Stack, ‘Changing conceptions of employee compensation’, Journal of Organizational Behavior Management, 23, 2–3 (2003), pp. 95–116; and I. M. Leitman, R. Levin, M. J. Lipp, L. Sivaprasad, C. J. Karalakulasingam, D. S. Bernard, P. ­Friedmann and D. J. Shulkin, ‘Quality and financial outcomes

from gainsharing for inpatient admissions: a three-year experience’, Journal of Hospital Medicine, 5, 9 (2010), pp. 501–17. 77 T. M. Welbourne and C. J. Ferrante, ‘To monitor or not to monitor: a study of individual outcomes from monitoring one’s peers under gainsharing and merit pay’, Group & Organization Management, 33, 2 (2008), pp. 139–62. 78 European Federation of Employee Share Ownership, www. efesonline.org. Accessed 30 October 2008; C. Dougherty, ‘Europe takes a closer look at employee stock ownership’, 31 March. 79 A. A. Buchko, ‘The effects of employee ownership on employee attitudes: a test of three theoretical perspectives’, Work and Occupations, 19, 1 (1992), 59–78; and R. P. Garrett, ‘Does employee ownership increase innovation?,’ New England Journal of Entrepreneurship, 13, 2, (2010), pp. 37–46. 80 D. McCarthy, E. Reeves and T. Turner, ‘Can employee share-ownership improve employee attitudes and behaviour?’, Employee Relations, 32, 4 (2010), pp. 382–95. 81 A. Pendleton and A. Robinson, ‘Employee stock ownership, involvement, and productivity: an interaction-based approach’, Industrial and Labor Relations Review, 64, 1 (2010), pp. 3–29. 82 X. Zhang, K. M. Bartol, K. G. Smith, M. D. Pfarrer and D. M. Khanin, ‘CEOs on the edge: earnings manipulation and stockbased incentive misalignment’, Academy of Management Journal, 51, 2 (2008), pp. 241–58. 83 D. D’Art and T. Turner, ‘Profit sharing, firm performance, and union influence in selected European countries’, Personnel Review, 33, 3 (2004), pp. 335–50; and D. Kruse, R. Freeman and J. Blasi, Shared Capitalism at Work: Employee Ownership, Profit and Gain Sharing, and Broad-Based Stock Options (Chicago: University of Chicago Press, 2010). 84 A. Bayo-Moriones and M. Larraza-Kintana, ‘Profit-sharing plans and affective commitment: does the context matter?’, Human Resource Management, 48, 2 (2009), pp. 207–26. 85 C. B. Cadsby, F. Song and F. Tapon, ‘Sorting and incentive effects of pay for performance: an experimental investigation’, Academy of Management Journal, 50, 2 (2007), pp. 387–405. 86 S. C. L. Fong and M. A. Shaffer, ‘The dimensionality and determinants of pay satisfaction: a cross-cultural investigation of a group incentive plan’, International Journal of Human Resource Management, 14, 4 (2003), pp. 559–80. 87 See, for instance, M. W. Barringer and G. T. Milkovich, ‘A theoretical exploration of the adoption and design of flexible benefit plans: a case of human resource innovation’, Academy of Management Review, 23, 2 (1998), pp. 305–24; D. Brown, ‘Everybody loves flex’, Canadian HR Reporter, 18 November 2002, p. 1; J. Taggart, ‘Putting flex benefits through their paces’, Canadian HR Reporter, 2 December 2002, p. G3; and N. D. Cole and D. H. Flint, ‘Perceptions of distributive and procedural justice in employee benefits: flexible versus traditional benefit plans’, Journal of Managerial Psychology, 19, 1 (2004), pp. 19–40. 88 D. A. DeCenzo and S. P. Robbins, Fundamentals of Human Resource Management, 10th edn (New York: Wiley, 2009). 89 D. Lovewell, ‘Flexible benefits: benefits on offer’, Employee Benefits, March 2010, p. S15. 90 G. Fuller, ‘Flexible benefits: flexing benefits across borders’, Employee Benefits, 9 October 2008, p. S25. 91 S. E. Markham, K. D. Scott and G. H. McKee, ‘Recognizing good attendance: a longitudinal, quasi-experimental field study’, Personnel Psychology, Autumn 2002, p. 641; and S. J. Peterson and F. Luthans, ‘The impact of financial and nonfinancial

206  7 Motivation: from concepts to applications

92 J. Rohman, ‘Developing recognition practices that strengthen company culture’, Great Place to Work, 14 August 2013.

Journal, June 2001, p. 587. See also F. Luthans and A. D. Stajkovic, ‘Provide recognition for performance improvement’, in E. A. Locke (ed.), Handbook of Principles of Organizational Behavior (Malden, MA: Blackwell, 2004), pp. 166–80.

93 Cited in S. Caudron, ‘The top 20 ways to motivate employees’, IndustryWeek, 3 April 1995, pp. 15–16. See also B. Nelson, ‘Try praise’, Inc., September 1996, p. 115.

95 Cited in K. J. Dunham, ‘Amid shrinking workplace morale, employers turn to recognition’, Wall Street Journal, 19 November 2002, p. B8.

94 A. D. Stajkovic and F. Luthans, ‘Differential effects of incentive motivators on work performance’, Academy of Management

96 Ibid.

incentives on business unit outcomes over time,’ Journal of Applied Psychology, 91, no. 1 (2006), pp. 156–65.

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CHAPTER 8 Emotions and moods Learning objectives After studying this chapter, you should be able to: 1 Differentiate between emotions and moods. 2 Discuss whether emotions are rational and what functions they serve. 3 Identify the sources of emotions and moods. 4 Show the impact emotional labour has on employees. 5 Describe affective events theory and its applications. 6 Contrast the evidence for and against the existence of emotional intelligence. 7 Identify strategies for emotion regulation and their likely effects. 8 Apply concepts about emotions and moods to specific OB issues.

We know too much and feel too little. Bertrand Russell

AFFECTIVE COMPUTING: READING YOUR MIND

© Rick Friedman/Corbis

Imagine you’re sitting in a plastic chair in a dim basement classroom. The only sound is the instructor’s voice in the dullest instructional film you have ever seen. You start to stare. Suddenly, your ear bud crackles to life. ‘I see you are feeling bored,’ a computer says, and the video switches to today’s high energy management lesson. Is this the classroom of the future? Thanks to affective computing, which allows computers to read emotions from facial expressions, middle-school classrooms have already tested this kind of technology. Researchers hope it can soon be used to tell whether students in online classes are bored and need more challenging questions, for instance, or confused and need more help. The potential ranges far beyond education to limitless applications for managing people in organizations. The Massachusetts Institute of Technology (MIT) Media Lab is currently programming computers to use 24 facial points to infer an emotion, for instance. What if computers could be made emotionally intelligent, to help a person get past frustration into productivity? What if managers could automatically receive reports on virtual employees’ emotions? What if sensors could help employees stay well by providing feedback on their emotional reactions to stress? Affective computing can provide managers with in-the-moment help. At MIT’s lab, a tiny traffic light, visible only to the wearer, flashes yellow when a listener’s face indicates lack of engagement in the conversation and red for complete disengagement. These cues could help a manager

delivering important safety information to an employee, for instance. The MIT team has also developed wristbands that sense emotional states and activity levels. These could help managers work with employees who are on the Asperger’s or autism spectrum. ‘With this technology in the future, we’ll be able to understand things . . . that we weren’t able to see before, things that calm them, things that stress them, said Rosalind Picard, the team’s director. With this possibility comes responsibility, of course. There are obvious ethical issues that will only grow with the technology’s increasing sophistication. Employees may not want computers to read their emotions either for their managers or for automatic feedback. ‘We want to have some control over how we display ourselves to others, said Nick Bostrom of the University of Oxford’s Future of Humanity Institute. There are also limits to affective computing’s ability to interpret emotions correctly, particularly across cultures. Work is progressing in Egypt and other countries, but ‘if we don’t have enough samples, across cultures and age ranges, the machine won’t be able to discriminate these subtle expressions,’ said Rana el Kaliouby of the MIT lab. Organizations will eventually have to decide when it is appropriate to read employees’ emotions, as well as which emotions. In the meantime, according to affective computing experts, people are still the best readers of emotions from facial cues. Perhaps there is an opportunity to get to know your employees before the cameras roll.

Source: ‘Affective computing’, MIT webpage, http://affect.media.mit.edu/; ‘Affective Computing and Intelligent Interaction 2013’, IEEE Computer Society Annual Conference webpage, www.acii2013.org/; and K. Weintraub, ‘But how do you really feel? Someday the computer may know’, New York Times, 16 October 2012, p. D3.

210  8 Emotions and moods

Whether or not your employer has a sensor trained on you to gauge your emotions, your emotions do matter to the workplace. It might surprise you that, until recently, the field of OB has given the topic of emotions little attention.1 Why? We offer two possible explanations. First is the myth of rationality.2 Until very recently, the protocol of the work world kept a damper on emotions. A well-run organization didn’t allow employees to express frustration, fear, anger, love, hate, joy, grief or similar feelings thought to be the antithesis of rationality. Although researchers and managers knew emotions were an inseparable part of everyday life, they tried to create organizations that were emotion-free. Of course, that wasn’t possible. The second explanation is that many believed emotions of any kind were disruptive.3 Researchers looked at strong negative emotions – especially anger – that interfered with an employee’s ability to work effectively. They rarely viewed emotions as constructive or contributing to enhanced performance. Certainly some emotions, particularly exhibited at the wrong time, can hinder performance. But employees do bring their emotions to work every day, and no study of OB would be comprehensive without considering their role in workplace behaviour.

REFLECTION How are you feeling right now? What sorts of things influence your positive moods? What sorts of things influence your ­negative moods?

What are emotions and moods? 1 Differentiate between emotions and moods. affect A broad range of feelings that people experience. emotions Intense feelings that are directed at someone or something. moods Feelings that tend to be less intense than emotions and that lack a contextual stimulus.

In our analysis, we’ll need three terms that are closely intertwined: affect, emotions and moods. Affect is a generic term that covers a broad range of feelings that people experience. It’s an umbrella concept that encompasses both emotions and moods.4 Emotions are intense feelings that are directed at someone or something.5 Moods are feelings that tend to be less intense than emotions and that often (though not always) lack a contextual stimulus.6 Most experts believe that emotions are more fleeting than moods.7 For example, if someone is rude to you, you’ll feel angry. That intense feeling of anger probably comes and goes fairly quickly, maybe even in a matter of seconds. When you’re in a bad mood, though, you can feel bad for several hours. Emotions are reactions to a person (for example, seeing a friend at work may make you feel glad) or event (for example, dealing with a rude client may make you feel angry). You show your emotions when you’re ‘happy about something, angry at someone, afraid of something’.8 Moods, in contrast, aren’t usually directed at a person or an event. But emotions can turn into moods when you lose focus on the event or object that started the feeling. And, by the same token, good or bad moods can make you more emotional in response to an event. So when a colleague criticizes how you spoke to a client, you might become angry at him. That is, you show emotion (anger) towards a specific object (your colleague). But as the specific emotion dissipates, you might just feel generally dispirited. You can’t attribute this feeling to any single event; you’re just not your normal self. You might then overreact to other events. This affect state describes a mood. Figure 8.1 shows the relationships among affect, emotions and mood. First, as the figure shows, affect is a broad term that encompasses emotions and moods. Second, there are differences between emotions and moods. Some of these differences – that

What are emotions and moods?   211 Affect Defined as a broad range of feelings that people experience. Affect can be experienced in the form of emotions or moods.

Emotions • Caused by specific event • Very brief in duration (seconds or minutes) • Specific and numerous in nature (many specific emotions such as anger, fear, sadness, happiness, disgust, surprise) • Usually accompanied by distinct facial expressions • Action oriented in nature

Moods • Cause is often general and unclear • Last longer than emotions (hours or days) • More general (two main dimensions – positive affect and negative affect – that are composed of multiple specific emotions) • Generally not indicated by distinct expressions • Cognitive in nature

Figure 8.1  Affect, emotions and moods

emotions are more likely to be caused by a specific event, and emotions are more fleeting than moods – we just discussed. Other differences are subtler. For example, unlike moods, emotions tend to be more clearly revealed with facial expressions (for example, anger, disgust). Also, some researchers speculate that emotions may be more action-oriented – they may lead us to some immediate action – while moods may be more cognitive, meaning they may cause us to think or brood for a while.9 Finally, the figure shows that emotions and moods can mutually influence each other. For example, an emotion, if it’s strong and deep enough, can turn into a mood: getting your dream job may generate the emotion of joy, but it also can put you in a good mood for several days. Similarly, if you’re in a good or bad mood, it might make you experience a more intense positive or negative emotion than would otherwise be the case. For example, if you’re in a bad mood, you might ‘blow up’ in response to a co-worker’s comment when normally it would have just generated a mild reaction. Because emotions and moods can mutually influence each other, there will be many points throughout the chapter where emotions and moods will be closely connected. Although affect, emotions and moods are separable in theory, in practice the distinction isn’t always crystal clear. In fact, in some areas, researchers have studied mostly moods, and in other areas, mainly emotions. So, when we review the OB topics on emotions and moods, you may see more information on emotions in one area and moods in another. This is simply the state of the research.

The basic emotions How many emotions are there? In what ways do they vary? There are dozens of emotions, including anger, contempt, enthusiasm, envy, fear, frustration, disappointment, embarrassment, disgust, happiness, hate, hope, jealousy, joy, love, pride, surprise and sadness. There have been numerous research efforts to limit and define the dozens of emotions into a fundamental or basic set of emotions.10 But some researchers argue that it makes no sense to think of basic emotions because even emotions we rarely experience, such as shock, can have a powerful effect on us.11 Other researchers, even philosophers, argue that there are universal emotions common to all of us. René Descartes, often called the founder of modern philosophy, identified six ‘simple and primitive passions’ – wonder, love, hatred, desire, joy and sadness – and argued that ‘all the others are composed of some of these six or are species of them’.12 Other

212  8 Emotions and moods

philosophers (Hume, Hobbes, Spinoza) identified categories of emotions. Although these philosophers were helpful, the burden to provide conclusive evidence for the existence of a basic set of emotions still rests with contemporary researchers. In contemporary research, psychologists have tried to identify basic emotions by studying facial expressions.13 One problem with this approach is that some emotions are too complex to be easily represented on our faces. Take love, for example. Many think of love as the most universal of all emotions,14 yet it’s not easy to express a loving emotion with one’s face only. Also, cultures have norms that govern emotional expression, so how we experience an emotion isn’t always the same as how we show it. And many companies today offer anger-management programmes to teach people to contain or even hide their inner feelings.15 It’s unlikely that psychologists or philosophers will ever completely agree on a set of basic emotions, or even whether it makes sense to think of basic emotions. Still, enough researchers have agreed on six essentially universal emotions – anger, fear, sadness, happiness, disgust and surprise – with most other emotions subsumed under one of these six categories.16 Some researchers even plot these six emotions along a continuum: happiness–surprise–fear–sadness– anger–disgust.17 The closer any two emotions are to each other on this continuum, the more likely it is that people will confuse them. For instance, we sometimes mistake happiness for surprise, but rarely do we confuse happiness and disgust. In addition, as we’ll see later on, cultural factors can also influence interpretations.

The basic moods: positive and negative affect One way to classify emotions is by whether they are positive or negative.18 Positive emotions – such as joy and gratitude – express a favourable evaluation or feeling. Negative emotions – such

‘Smile, and the work world smiles with you’ It is true that a smile is used as social currency in most organ­ izations to create a positive atmosphere, and it usually creates an unconscious reflexive return smile. However, anyone who has ever smiled at an angry manager knows this doesn’t always work. In truth, the giving and withholding of smiles is an unconscious power play of office politics. New research on the ‘boss effect’ suggests that the amount of power and status a person feels over another person dictates who will smile. Subordinates generally smile more often than their bosses smile back at them. However, the perception of power is complex and varies by national culture: in a recent study, Chinese workers reflexively smiled only at bosses who had the power to give them negative job evaluations, while US participants smiled most to managers perceived to have higher social power. Other researchers found that when individuals felt powerful, they usually didn’t return even a high-ranking individual’s smile. Conversely, when people felt powerless, they returned everyone’s smiles. While we think of smiling as a choice, smiling (or concealing a smile) is often unconscious. Researchers are finding that social pressure affects neurobiology. ‘It shapes your neural architecture,’ said cognitive neuroscientist Sook-Lei Liew. Smile reactions are, therefore, partially involuntary; when smiling is a product of our attitudes, it can become an unconscious process. Thus, ‘Your feelings about power and status seem to dictate how much you are willing to return a smile to another person,’ cognitive neuroscientist Evan Carr affirmed.

MYTH OR SCIENCE?

The science of smiling transcends the expression of emotion. While an angry manager may not smile back, a happy manager might not as well, according to the ‘boss effect’ research. ‘The relationship of what we show on our face and how we feel is a very loose one,’ said Arvid Kappas, a professor of emotion research at Jacobs University Bremen in Germany. This suggests that, when we want to display positive emotions to others, we should do more than smile, such as when service representatives try to create happy moods in their customers with excited voice pitch, encouraging gestures and energetic body movement. The science of smiling is an area of current research, but it is clear already that knowing about the ‘boss effect’ suggests many practical applications. For one, managers and employees can be made more aware of ingrained tendencies towards others and, through careful self-observation, change their habits. Comprehensive displays of positive emotion using voice inflection, gestures and word choice may also be more helpful in building good business relationships than the simple smile. Sources: R. L. Hotz, ‘Too important to smile back: the “boss effect”’, Wall Street Journal, 16 October 2012, p. D2; E. Kim and D. J. Yoon, ‘Why does service with a smile make employees happy? A social interaction model’, Journal of Applied Psychology, 97 (2012), pp. 1059–67; and K. Weintraub, ‘But how do you really feel? Someday the computer may know’, New York Times, 16  October 2012, p. D3.

What are emotions and moods?   213

positive affect A mood dimension that consists of specific positive emotions such as excitement, self-assurance and cheerfulness at the high end and boredom, sluggishness and tiredness at the low end. negative affect A mood dimension that consists of emotions such as nervousness, stress and anxiety at the high end and relaxation, tranquillity and poise at the low end. positivity offset The tendency of most individuals to experience a mildly positive mood at zero input (when nothing in particular is going on).

as anger or guilt – express the opposite. Keep in mind that emotions can’t be neutral. Being neutral is being nonemotional.19 When we group emotions into positive and negative categories, they become mood states because we are now looking at them more generally instead of isolating one particular emotion. In Figure 8.2, excited is a specific emotion that is a pure marker of high positive affect, while boredom is a pure marker of low positive affect. Similarly, nervous is a pure marker of high negative affect, while relaxed is a pure marker of low negative affect. Finally, some emotions – such as contentment (a mixture of high positive affect and low negative affect) and sadness (a mixture of low positive affect and high negative affect) – are in between. You’ll notice that this model does not include all emotions. Some, such as surprise, don’t fit well because they’re not as clearly positive or negative. So, we can think of positive affect as a mood dimension consisting of positive emotions such as excitement, alertness and elation at the high end and contentedness, calmness and serenity at the low end. Negative affect is a mood dimension consisting of nervousness, stress and anxiety at the high end and boredom, depression and fatigue at the low end. (Note: Positive and negative affect are moods. We’re using these labels, rather than positive mood and negative mood, because that’s how researchers label them.) Negative emotions are likely to become negative moods. People think about events that created strong negative emotions five times as long as they do about events that created strong positive ones.20 So, we should expect people to recall negative experiences more readily than positive ones. Perhaps one reason is that, for most of us, negative experiences are more unusual. Indeed, research finds a positivity offset, meaning that at zero input (when nothing in particular is going on), most individuals experience a mildly positive mood.21 So for most people, positive moods are somewhat more common than negative moods. The positivity offset also appears to operate at work. One study of customer-service representatives in a British call centre (a job where it’s probably difficult to feel positive) revealed people reported experiencing positive moods 58 per cent of the time.22 Does the degree to which people experience these positive and negative emotions vary across cultures? Yes. In China, people report experiencing fewer positive and negative emotions than people in other cultures, and the emotions they experience are less intense. Compared with Mainland Chinese, Taiwanese report more positive and fewer negative emotions than their Chinese counterparts.23 People in most cultures appear to experience certain positive and negative emotions, but the frequency and intensity varies to some degree. Despite these differences, people from all over the world interpret negative and positive emotions in much the same way. We all view negative emotions, such as hate, terror and rage, as dangerous and destructive, and we desire positive emotions, such as joy, love and

High Negative Affect

Tense

Excited

Nervous

Elated

Stressed

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Upset

Content

Sad Depressed

Serene

Bored Low Positive Affect

High Positive Affect

Alert

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Figure 8.2  The structure of mood

Calm

Low Negative Affect

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happiness. However, some cultures value certain emotions more than others. Most European cultures value enthusiasm, while the Chinese consider negative emotions more useful and constructive than do people in Europe. Recent research has suggested that negative affect actually has many benefits. Visualizing the worst-case scenario often allows people to accept present circumstances and cope, for instance.24 Negative affect can allow managers to think more critically and fairly, other research indicates.25 Finally, whether emotions are positive or negative can be culturally determined. For example, pride is generally a positive emotion in Western individualistic cultures but Eastern cultures such as China and Japan view pride as undesirable.26

The function of emotions

Granger, NYC. / Alamy Images

2  Discuss whether emotions are rational and what functions they serve.

Do emotions make us irrational?

How often have you heard someone say, ‘Oh, you’re just being emotional’? You might have been offended. The famous philosopher Bertrand Russell wrote: ‘The degree of one’s emotions varies inversely with one’s knowledge of the facts.’ These observations suggest that rationality and emotion are in conflict with one another and that if you exhibit emotion, you are likely to act irrationally. One team of authors argue that displaying emotions such as sadness, to the point of crying, is so toxic to a career that we should leave the room rather than allow others to witness our emotional display.27 These perspectives suggest that the demonstration or even experience of emotions is likely to make us seem weak, brittle or irrational. However, the research disagrees and is increasingly showing that emotions are actually critical to rational thinking.28 In fact, there has been evidence of such a link for a long time. Take the example of Phineas Gage, a railroad worker. One September day in 1848, while Gage was setting an explosive charge at work, it went off. A 1.1m iron bar flew into his lowerleft jaw and out through the top of his skull. Remarkably, Gage survived his injury. He was still able to read and speak, and he performed well above average on cognitive ability tests. However, it became clear that Gage had lost his ability to experience emotion. He was emotionless at even the saddest misfortunes or the happiest occasions. Gage’s inability to express emotion eventually took away his ability to reason. He started making irrational choices about his life, often behaving erratically and against his self-interests. Despite being an intelligent man whose intellectual abilities were unharmed by the accident, Gage drifted from job to job, eventually joining a circus. In commenting on Gage’s condition, one expert noted, ‘Reason may not be as pure as most of us think it is or wish it were . . . emotions and feelings may not be intruders in the bastion of reason at all: they may be enmeshed in its networks, for worse and for better.’29 The example of Phineas Gage and many other brain injury studies show us that emotions are critical to rational thinking. We must have the ability to experience emotions to be rational. Why? Because our emotions provide important information about how we understand the world around us. For instance, a recent study indicated that individuals in a negative mood are better able to discern truthful from accuBy studying the skull of Phineas Gage (shown here) rate information than people in a happy mood.30 Think about and other brain injuries, researchers discovered an a manager making a decision to fire an employee. Would important link between emotions and rational thinking. you really want the manager to make the decision without They found that losing the ability to emote led to regarding either his or the employee’s emotions? The key to the loss of the ability to reason. From this discovery, good decision making is to employ both thinking and feeling researchers learned that our emotions provide us with in one’s decisions. valuable information that helps our thinking process.

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What functions do emotions serve?

evolutionary psychology An area of inquiry which argues that we must experience the emotions we do because they serve a purpose.

Why do we have emotions? What role do they serve? We just discussed one function – that we need them to think rationally. Charles Darwin, however, took a broader approach. In The Expression of the Emotions in Man and Animals, Darwin argued that emotions developed over time to help humans solve problems. Emotions are useful, he said, because they motivate people to engage in actions that are important for survival – actions such as foraging for food, seeking shelter, choosing mates, guarding against predators and predicting others’ behaviours. For example, disgust (an emotion) motivates us to avoid dangerous or harmful things (such as rotten foods). Excitement (also an emotion) motivates us to take on situations in which we require energy and initiative (for example, embarking on a new career). Drawing from Darwin are researchers who focus on evolutionary psychology. This field of study says we must experience emotions – whether they are positive or negative – because they serve a purpose.31 For example, you would probably consider jealousy to be a negative emotion. Evolutionary psychologists would argue that it exists in people because it has a useful purpose. Mates may feel jealousy to increase the chance that their genes, rather than a rival’s genes, are passed on to the next generation.32 Although we tend to think of anger as being ‘bad’, it actually can help us protect our rights when we feel they’re being violated. For example, a person showing anger when they are double-crossed by a colleague is serving a warning for others not to repeat the same behaviour. Consider another example. Rena Weeks was a secretary at a prominent law firm. Her boss wouldn’t stop touching and grabbing her. His treatment of her made her angry. So she did more than quit – she sued, and won a multimillion-euro case.33 It’s not that anger is always good. But as with all other emotions, it exists because it serves a purpose. Positive emotions also serve a purpose. For example, a service employee who feels empathy for a customer may provide better customer service than a seemingly unfeeling employee. But some researchers are not firm believers of evolutionary psychology. Why? Think about fear (an emotion). It’s just as easy to think of the harmful effects of fear as it is the beneficial effects. For example, running in fear from a predator increases the likelihood of survival. But what benefit does freezing in fear serve? Evolutionary psychology provides an interesting perspective on the functions of emotions, but it’s difficult to know whether this perspective is valid all the time.34

Sources of emotions and moods 3  Identify the sources of emotions and moods.

Have you ever said, ‘I got up on the wrong side of the bed today’? Have you ever yelled at a co-worker or family member for no particular reason? If you have, it probably makes you wonder where emotions and moods come from. Here we discuss some of the primary influences on moods and emotions.

Personality

affect intensity Individual differences in the strength with which individuals experience their emotions.

Moods and emotions have a trait component – most people have built-in tendencies to experience certain moods and emotions more frequently than others do. Moreover, people naturally differ in how intensely they experience the same emotions. Contrast the former famous tennis players John McEnroe and Björn Borg. One was easily moved to anger, while the other was relatively distant and unemotional. McEnroe and Borg probably differ in affect intensity, or how strongly they experience their emotions.35 Affectively intense people experience both positive and negative emotions more deeply – when they’re sad, they’re really sad, and when they’re happy, they’re really happy.

Time of the day Are you a morning person? Or do you feel best later in the day? People do vary in their moods by time of day. However, research suggests most of us actually follow the same pattern, and the nature of this pattern may surprise you. Levels of positive affect tend to peak in the late morning (10 a.m.–midday) and then remain at that level until early evening (around 7 p.m.).36 Starting about 12 hours after waking, positive affect begins to

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drop until midnight, and then, for those who remain awake, the drop accelerates until positive mood picks up again after sunrise.37 As for negative affect, most research suggests it fluctuates less than positive affect,38 but the general trend is for it to increase over the course of a day, so that it is lowest early in the morning and highest late in the evening.39 A fascinating study assessed mood by analysing 509 million Twitter messages from 2.4 million individuals across 84 countries.40 The researchers assessed mood by noting the presence of words connoting positive affect (happy, enthused, excited) and negative (sad, angry, anxious) affect. You can see these trends in the positive affect part of Figure 8.3. Daily fluctuations in mood tended to follow a similar pattern in most countries. Specifically, regardless of the day of the week, positive affect increased after sunrise, tended to peak mid-morning, remained stable until roughly 7 p.m., and then tended to increase again until the midnight drop. These results are similar to what we reported above from previous research. A major difference, though, was what happens in the evening. As we noted earlier, most research suggests that positive affect tends to drop after 7 p.m., whereas this study suggests that it increases before the midnight decline. We’ll have to wait for further research to see which description is accurate. The negative affect trends in this study were more consistent with past research, showing that negative affect is lowest in the morning and tends to increase over the course of the day and evening.

Day of the week Are people in their best moods on the weekends? Generally that is true. Drawing on the same study of over 500 million Twitter messages across 84 countries, Figure 8.3 also demonstrates that the highest positive affect is on Saturday and Sunday. Breaking the results down into .062 .06

PA

.058 .056 .054 .052 0

3

6

9

12

15

18

21

24

15

18

21

24

HOUR .024 .023

NA

.022 .021 .02 .019 0

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6

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12 HOUR

Sun

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Figure 8.3  Hourly changes in individual affect broken down by day of the week: Top = Positive Affect (PA); Bottom = Negative Affect (NA) Source: S. A. Golder and M. W. Macy, ‘Diurnal and Seasonal Mood Vary with Work, Sleep, and Daylength Across Diverse Cultures’, Science, 333, (2011).

What are emotions and moods?   217

different countries reveals that this tends to be true in most cultures. For example, for Germans and Chinese, positive affect is highest from Friday to Sunday and lowest on Monday. The same pattern even seems to hold in countries where the weekend occurs on different days. However, this isn’t the case in all cultures. In Japan, positive affect is higher on Monday than on either Friday or Saturday. As for negative affect, Monday is the highest negative-affect day across most cultures. However, in many countries, negative affect is lower on Friday and Saturday than on Sunday. It may be that while Sunday is enjoyable as a day off in many of these countries (and thus has a higher positive affect), people also get a bit stressed about the week ahead (which is why negative affect is higher).

Weather

illusory correlation The tendency of people to associate two events when in reality there is no connection.

When do you think you would be in a better mood – when it’s 30°C and sunny or when it’s a gloomy, cold, rainy day? Many people believe their mood is tied to the weather. However, a fairly large and detailed body of evidence conducted by multiple researchers suggests weather has little effect on mood, at least for most people.41 One expert concluded, ‘Contrary to the prevailing cultural view, these data indicate that people do not report a better mood on bright and sunny days (or, conversely, a worse mood on dark and rainy days).’42 Illusory correlation, which occurs when we associate two events that in reality have no connection, explains why people tend to think nice weather improves their mood.

Stress As you might imagine, stressful daily events at work (a nasty email, an impending deadline, the loss of a big sale, a reprimand from the boss) negatively affect moods. The effects of stress also build over time. As the authors of one study note, ‘a constant diet of even low-level stressful events has the potential to cause workers to experience gradually increasing levels of strain over time’.43 Mounting levels of stress can worsen our moods and we experience more negative emotions. Although sometimes we thrive on stress, most of us find stress takes a toll on our mood. Recent research also suggests that when situations are overly emotionally charged, we have a natural response to disengage, to literally look away.44

Social activities Do you tend to be happiest when you are at a party with friends? For most people, social activities increase positive mood and have little effect on negative mood. But do people in positive moods seek out social interactions, or do social interactions cause people to be in good moods? It seems that both are true.45 And does the type of social activity matter? Indeed it does. Research suggests that physical (skiing or hiking with friends), informal (going to a party), or epicurean (eating with others) activities are more strongly associated with increases in positive mood than formal (attending a meeting) or sedentary (watching TV with friends) events.46

Sleep Does a lack of sleep make people grumpier? Sleep quality affects mood, and increased fatigue puts workers at health risks of disease, injury and depression.47 One of the reasons less sleep, or poor sleep quality, puts people in a bad mood is that it impairs decision making and makes it difficult to control emotions.48 One study suggests that poor sleep the previous night also impairs peoples’ job satisfaction the next day, mostly because people feel fatigued, irritable and less alert.49

Exercise You often hear that people should exercise to improve their mood. But does ‘sweat therapy’ really work? It appears so. Research consistently shows that exercise enhances peoples’ positive mood.50 It appears that the therapeutic effects of exercise are strongest for those who are depressed. Although the effects of exercise on moods are consistent, they are not terribly strong. So, exercise may help put you in a better mood, but don’t expect miracles.

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Age Do you think that young people experience more extreme, positive emotions (so-called ‘youthful exuberance’) than older people do? If you answered ‘yes,’ you were wrong. One study of people aged 18 to 94 years revealed that negative emotions seem to occur less as people get older. Periods of highly positive moods lasted longer for older individuals, and bad moods faded for them more quickly than for younger people.51 The study implies that emotional experience tends to improve with age, so that as we get older, we experience fewer negative emotions.

Gender Many believe women are more emotional than men. Is there any truth to this? Evidence does confirm women are more emotionally expressive than men;52 they experience emotions more intensely, they tend to ‘hold onto’ emotions longer than men, and they display more frequent expressions of both positive and negative emotions, except anger.53 Evidence from a study of participants from 37 different countries found that men consistently report higher levels of powerful emotions like anger, whereas women report more powerless emotions like sadness and fear. Thus, there are some gender differences in the experience and expression of emotions.54 People also tend to attribute men’s and women’s emotions in ways that might be based on stereotypes of what typical emotional reactions are. One study showed that experimental participants who read about emotional expressions interpreted women’s reactions as being dispositional (related to personality), whereas men’s reactions were interpreted as being due to the situation around them.55 For example, a picture of a sad woman led observers to believe she was acting consistently with an emotional personality type, whereas a picture of a sad man was more likely to be attributed to his having a bad day. Another study showed that participants were faster at detecting angry expressions on male faces and happy expressions on female faces; neutral faces in men were attributed as more angry and neutral faces in women were interpreted as happy.56

Creating highly productive teams across the cultural emotional barrier The best teams are emotionally intelligent; each member’s emotions are discerned and respectfully considered by the leaders and by the rest of the group. Across cultures, however, this is often easier said than done. Our environments dictate the norms for displaying emotions, resulting in a cultural emotional barrier whenever members from different parts of the world interact. Research on cultures has focused on Eastern versus Western global comparisons to describe differing belief and value syst­ems. Eastern countries tend to be more collectivistic, whereas Western countries are more individualistic. These distinctions have a profound effect on the emotional dynamics of work teams. It is easy to see how misunderstandings can lead to ineffective group dynamics. A member of an Eastern culture, for instance, will tend to focus on the good of the team over his or her personal success. He or she will likely value harmony and cooperation and may consider any emotional display of anger, disagreement or contempt to be inappropriate. A group of Eastern members, therefore, will achieve high team productivity in a very different manner from a team of Western members, who value freedom of expression, directness, and other ways of showing individuality. The Western members may be more comfortable working independently

glOBal

than the Eastern members and be more accepting of emotional displays of frustration or enthusiasm. The Eastern members may look for a balance of negative and positive experiences, while the Western members may tally only the positive experiences. These are generalizations, of course. Any examination of cultures will look for similarities between people. Yet just as individuals’ emotional expressions will vary by personality and experience, so are we and our emotions influenced by our cultures. Knowing where someone’s emotions are ‘coming from’ can be an important step towards understanding and thus working well with your teammates. For a team to be highly productive, members need to become emotionally sensitive to the viewpoints of others, and leaders need to learn culturally appropriate emotional responses to motivate team members. Through better understanding of cultures and emotions, multicultural teams can capitalize on the strengths that each individual viewpoint can contribute to organizational goals. Sources: G. M. Fisk and J. P. Friesen, ‘Perceptions of leader emotion regulation and LMX as predictors of followers’ job satisfaction and organizational citizenship behaviors’, Leadership Quarterly, February 2012, pp. 1–12; E. J. Hartel and X.-Y. Liu, ‘How emotional climate in teams affects workplace effectiveness in individualistic and collectivistic contexts’, Journal of Management & Organization, July 2012, pp. 573–85; and V. A. Visser et al., ‘How leader displays of happiness and sadness influence follower performance: emotional contagion and creative versus analytical performance’, Leadership Quarterly, February 2013, pp. 172–88.

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Emotional labour If you’ve ever had a job working in retail sales or waiting on tables in a restaurant, you know the importance of projecting a friendly demeanour and smiling. Even though there were days when you didn’t feel cheerful, you knew management expected you to be upbeat when dealing with customers. So you faked it, and in so doing, you expressed emotional labour. Every employee expends physical and mental labour when they put their bodies and cognitive capabilities, respectively, into their job. But jobs also require emotional labour. Emotional labour is an employee’s expression of organizationally desired emotions during interpersonal transactions at work.57 The concept of emotional labour emerged from studies of service jobs. Airlines expect their flight attendants, for instance, to be cheerful; we expect funeral directors to be sad; and we expect doctors to be emotionally neutral. But really, emotional labour is relevant to almost every job. Your managers expect you, for example, to be courteous, not hostile, in interactions with co-workers. The true challenge arises when employees have to project one emotion while simultaneously feeling another.58 This disparity is emotional dissonance, and it can take a heavy toll on employees. Bottled-up feelings of frustration, anger and resentment can eventually lead to emotional exhaustion and burnout.59 It’s from the increasing importance of emotional labour as a key component of effective job performance that an understanding of emotion has gained heightened relevance within the field of OB. Emotional labour creates dilemmas for employees. There may be people with whom you have to work that you just don’t like. Perhaps you consider their personality abrasive. Maybe you know they’ve said negative things about you behind your back. Regardless, your job requires you to interact with these people on a regular basis. So you’re forced to feign friendliness. It can help you, on the job especially, if you separate emotions into felt or displayed emotions.60 Felt emotions are an individual’s actual emotions. In contrast, displayed emotions are those that the organization requires workers to show and considers appropriate in a given job. They’re not innate; they’re learned. For example, a police officer is expected to display emotions such as concern, interest and courtesy when dealing with the public. But the emotions the officer actually feels may be frustration and anger.

4  Show the impact emotional labour has on employees.

emotional labour A situation in which an employee expresses organizationally desired emotions during interpersonal transactions at work.

emotional dissonance Inconsistencies between the emotions people feel and the emotions they project.

felt emotions An individual’s actual emotions.

VGstockstudio / Shutterstock

displayed emotions Emotions that are organizationally required and considered appropriate in a given job.

Many workers are required to display certain emotions as part of their job. This emotional labour sometimes means hiding or suppressing real feelings. For example, the job of telesales personnel is to sell products or services directly to customers over the telephone. They must be polite, friendly and positive even when the customer’s response is negative. Emotional labourers often have to bottle up their true feelings until after work.

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surface acting Hiding one’s inner feelings and forgoing emotional expressions in response to display rules. deep acting Trying to modify one’s true inner feelings based on display rules.

Effective managers have learned to be serious when giving an employee a negative performance evaluation and to hide their anger when they’ve been passed over for promotion. And a salesperson who hasn’t learned to smile and appear friendly, regardless of her true feelings at the moment, isn’t typically going to last long on most sales jobs. How we experience an emotion isn’t always the same as how we show it.61 Displaying fake emotions requires us to suppress real ones. Surface acting is hiding inner feelings and hiding emotional expressions in response to display rules. A worker who smiles at a customer even when he doesn’t feel like it is surface acting. Deep acting is trying to modify our true inner feelings based on display rules. A health care provider trying to genuinely feel more empathy for her patients is deep acting.62 Surface acting deals with displayed emotions, and deep acting deals with felt emotions. Research in the Netherlands and Belgium indicated that surface acting is stressful to employees, while mindfulness (learning to objectively evaluate our emotional situation in the moment) is beneficial to employee well-being.63 Displaying emotions we don’t really feel is exhausting, so it is important to give employees who engage in surface displays a chance to relax and recharge. A study that looked at how cheerleading instructors spent their breaks from teaching found those who used the time to rest and relax were more effective after their breaks.64 Instructors who did tasks during their breaks were only about as effective after their break as they were before. Another study found that in hospital work groups where there were heavy emotional display demands, burnout was higher than in other hospital work groups.65

Affective events theory 5  Describe affective events theory and its applications. affective events theory (AET) A model which suggests that workplace events cause emotional reactions on the part of employees, which then influence workplace attitudes and behaviours.

We’ve seen that emotions and moods are an important part of our lives and our work lives. But how do they influence our job performance and satisfaction? A model called affective events theory (AET) demonstrates that employees react emotionally to things that happen to them at work, and this reaction influences their job performance and satisfaction.66 Figure 8.4 summarizes AET. The theory begins by recognizing that emotions are a response to an event in the work environment. The work environment includes everything surrounding the job – the variety of tasks and degree of autonomy, job demands and requirements for expressing emotional labour. This environment creates work events that can be hassles, uplifting events, or both. Examples of hassles are colleagues who refuse to carry out their share of work, conflicting directions from different managers and excessive time pressures. Examples of uplifting events include meeting a goal, getting support from a colleague and receiving recognition for an accomplishment.67 These work events trigger positive or negative emotional reactions, to which employees’ personalities and moods predispose them to respond with greater or lesser intensity. People who score low on emotional stability are more likely to react strongly to negative events. And our emotional response to a given event can change depending on mood. Finally, emotions influence a number of performance and satisfaction variables, such as organizational citizenship behaviour, organizational commitment, level of effort, intention to quit and workplace deviance. Tests of affective events theory suggest the following: 1. An emotional episode is actually a series of emotional experiences, precipitated by a single

event and containing elements of both emotions and mood cycles. 2. Current emotions influence job satisfaction at any given time, along with the history of

emotions surrounding the event. 3. Because moods and emotions fluctuate over time, their effect on performance also fluctuates. 4. Emotion-driven behaviours are typically short in duration and of high variability. 5. Because emotions, even positive ones, tend to be incompatible with behaviours required to

do a job, they typically have a negative influence on job performance.68

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Work environment • Characteristics of the job • Job demands • Requirements for emotional labour

Work events • Daily hassles • Daily uplifts

Emotional reactions • Positive • Negative

Job satisfaction

Job performance

Personal dispositions • Personality • Mood

Figure 8.4  Affective events theory Source: Based on N. M. Ashkanasy and C. S. Daus, ‘Emotion in the workplace: the new challenge for managers’, Academy of Management Executive, February 2002, p. 77.

Consider an example.69 Say you work as an aeronautical engineer for Airbus. Because of the downturn in demand for commercial jets, you’ve just learned the company is considering laying off 10,000 employees, possibly including you. This event is likely to make you feel negative emotions, especially fear that you might lose your primary source of income. And because you’re prone to worry a lot and obsess about problems, this event increases your feelings of insecurity. Your worry is increased because you (1) didn’t take the risk voluntarily, (2) don’t trust your employer, (3) realize the risk is in the hands of people whose perspectives might not favour you, and (4) see no benefit if you act out.70 The layoff also sets in motion a series of smaller events that create an episode: you talk with your boss and he assures you your job is safe; you hear rumours your department is high on the list to be eliminated; and you run into a former colleague who was laid off six months ago and still hasn’t found work. These events, in turn, create emotional ups and downs. One day, you’re feeling upbeat that you’ll survive the cuts. The next, you might be depressed and anxious. These emotional swings take your attention away from your work and lower your job performance and satisfaction. Finally, your response is magnified because this is the fourth-largest layoff Airbus has initiated in the past three years. In summary, AET offers two important messages.71 First, emotions provide valuable insights into how workplace hassles and uplifting events influence employee performance and satisfaction. Second, employees and managers shouldn’t ignore emotions or the events that cause them, even when they appear minor, because they accumulate.

Emotional intelligence

emotional intelligence (EI) The ability to detect and to manage emotional cues and information.

Mathilda Mueller is an office manager. Her awareness of her own and others’ emotions is almost non-existent. She’s moody and unable to generate much enthusiasm or interest in her employees. She doesn’t understand why employees get upset with her. She often overreacts to problems and chooses the most ineffectual responses to emotional situations.72 Mathilda Mueller has low emotional intelligence. Emotional intelligence (EI) is a person’s ability to (1) perceive emotions in the self and others, (2) understand the meaning of these emotions, and (3) regulate one’s emotions accordingly in a cascading model, as shown in Figure 8.5. People who know their own emotions and are good at reading emotional cues – for instance,

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Conscientiousness

Perceive emotions in self and others

Cognitive

Understand the meaning of emotions

Emotional stability

Regulate emotions

Figure 8.5  A cascading model of emotional intelligence

knowing why they’re angry and how to express themselves without violating norms – are most likely to be effective.73 Several studies suggest that EI plays an important role in job performance. One study looked at the characteristics of engineers at Lucent Technologies who were rated as stars by their peers. The researchers concluded that stars were better at relating to others. That is, it was EI, not IQ, that characterized high performers. Another study analysed the performance profiles from various positions in 121 companies around the world. The results revealed that EI abilities were more than twice as important, in comparison to technical and cognitive abilities, for excellence.74 Another study that used functional magnetic resonance imaging (fMRI) technology found executive MBA students who performed best on a strategic decision making task were more likely to incorporate emotion centres of the brain into their choice process. The students also de-emphasized the use of the more cognitive parts of their brains.75 EI has been a controversial concept in OB, with supporters and detractors. In the following sections, we review the arguments for and against its viability.

Libby Welch / Alamy Stock Photo

6  Contrast the evidence for and against the existence of emotional intelligence.

Research studying emotional intelligence in the collection of debt found that the best collectors were more emotionally intelligent than those that were less successful. Emotional competencies thought to be important for debt collectors are self awareness (recognizing one’s own feelings), empathy (knowing others’ feelings), self-control (containing disruptive emotions) and adaptability (managing conflict flexibly). Source: Bachman, J., Stein, S., Campbell, K., & Sitarenios, G. (2000). Emotional intelligence in the collection of debt. International Journal of Selection and Assessment, 8(3), 176–82.

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EMPLOYABILITY AND EMOTIONS

Evaluating emotional intelligence can be testing by R. Rigby In this chapter alone, the applications of emotions and moods to the workplace considers their role in the selection process, decision making, creativity, motivation, leadership, interpersonal conflict, negotiation, customer service, job attitudes and deviant workplace behaviours. Clearly, emotions and moods influence many aspects of OB. For this very reason, emotional testing has taken a prominent role in finding the right person for the job. The head of Google’s HR department went as far as to say that traditional interview scores and college grades were worthless when it came to predicting how potential employees would perform in their jobs. Although very few people would recommend disregarding qualifications, technical skills and interview scores, emotional intelligence has become extremely popular in providing further insights into job candidates. For example, Matthew Owen, a partner at Sovereign Capital, a UK-based private equity house that uses the Trait Emotional Intelligence Questionnaire

(TEIQue), says that if it means you find someone who is 1 per cent better then it is worth it. ‘A lot of organisations do three interviews and they essentially do the same interview three times. We want to get as much evidence as possible.’ He recalls that when Sovereign was interviewing for a chief financial officer, one particular candidate cleared many hurdles but the interviewers had concerns they could not put their finger on. ‘EI tests showed the candidate was very optimistic and had a lack of self-confidence.’ This, he says, was more or less the opposite of what they were looking for in a CFO. Can you prepare for an EI test? According to Dr Konstantinos Petrides, director of the London Psychometric Laboratory at University College London which developed the TEIQue, it is pointless to try to prepare for EI tests because there are no right answers – you would have to try to second guess what recruiters want, which is highly risky. Besides, if you succeeded in such efforts, you might wind up with a job that does not suit you.

Source: Adapted from Rigby, R. (2014) Evaluating emotional intelligence can be testing, Financial Times, 21 September. © The Financial Times Limited. All Rights Reserved. Pearson Education Ltd. is responsible for providing this adaptation of the original article.

The case for EI The arguments in favour of EI include its intuitive appeal, the fact that EI predicts criteria that matter, and the idea that EI is biologically based.

Intuitive appeal Intuition suggests people who can detect emotions in others, control their own emotions and handle social interactions well have a powerful leg up in the business world. One company’s promotional materials for an EI measure claimed, ‘EI accounts for more than 85 per cent of star performance in top leaders.’76

EI predicts criteria that matter Evidence suggests a high level of EI means a person will perform well on the job. For example, one study found EI predicted the performance of employees in a cigarette factory in China.77 A review of studies indicated that, overall, EI was weakly but consistently positively correlated with job performance, even after researchers took cognitive ability, conscientiousness, and neuroticism into account.78

EI is biologically based In one study, people with damage to the brain area that governs emotional processing (part of the prefrontal cortex) scored no lower on standard measures of intelligence than people without similar damage. Nevertheless, they scored significantly lower on EI tests and were impaired in normal decision making. This study suggests EI is neurologically based in a way that’s unrelated to standard measures of intelligence.79 There is also evidence EI is genetically influenced, further supporting the idea that it measures a real underlying biological factor.80

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The case against EI For all its supporters, EI has just as many critics. Its critics say that EI is vague and impossible to measure, and they question its validity.

EI researchers do not agree on definitions To many researchers, it’s not clear what EI is, because researchers use different definitions of it.81 Some have focused on tests with right and wrong answers from which we can infer someone’s ability to recognize and control emotions. This is the ability-based perspective on EI. Other researchers have viewed emotional intelligence as a broad variety of ideas that we can measure by self-reports and that are connected primarily by the fact that none of them are the same as cognitive intelligence. Not only are these two definitions different, but the measures used by each perspective are barely correlated with one another.82

EI can’t be measured Many critics have raised questions about measuring EI. Because EI is a form of intelligence, for instance, there must be right and wrong answers about it on tests, they argue. Some tests do have right and wrong answers, although the validity of some of the questions on these measures is questionable. For example, one measure asks you to associate particular feelings with specific colours, as if purple always makes us feel cool and not warm. Other measures are self-reported, meaning there is no right or wrong answer. For example, an EI test question might ask you to respond to the statement, ‘I’m good at “reading” other people.’ In general, the measures of EI are diverse, and researchers have not subjected them to as much rigorous study as they have measures of personality and general intelligence.83

EI is nothing but personality with a different label Some critics argue that because EI is so closely related to intelligence and personality, once you control for these factors, EI has nothing unique to offer. There is some foundation to this argument. EI appears to be highly correlated with measures of personality, especially emotional stability.84 If this is true, then biological markers like brain activity and heritability are attributable to other well-known and much better researched psychological constructs. To some extent, researchers have resolved this issue by noting that EI is a construct partially determined by traits like cognitive intelligence, conscientiousness and neuroticism, so it makes sense that EI is correlated with these characteristics.85 Although the field is progressing in its understanding of EI, many questions have not been answered. EI is wildly popular among consulting firms and in the popular press, but it’s still difficult to validate this construct with the research literature.

Emotion regulation Have you ever tried to cheer yourself up when you’re feeling down, or calm yourself when 7  Identify strategies for emotion regulation you’re feeling angry? If so, you have engaged in emotion regulation, which is part of the EI and their likely effects. literature but is increasingly being studied as an independent concept.86 The central idea behind emotion regulation is to identify and modify the emotions you feel. Recent research suggests that emotion management ability is a strong predictor of task performance for some jobs and organizational citizenship behaviours.87 Researchers of emotion regulation often study the strategies people may employ to change their emotions. One strategy we have discussed in this chapter is surface acting, or literally ‘putting on a face’ of appropriate response to a given situation. Surface acting doesn’t change the emotions, though, so the regulation effect is minimal. Perhaps due to the costs of expressing what we don’t feel, a recent study suggested that individuals who vary their surface-acting

OB applications of emotions and moods   225

response may have lower job satisfaction and higher levels of work withdrawal than those who consistently use surface acting.88 Deep acting, another strategy we have covered, is less psychologically costly than surface acting because the employee is actually trying to experience the emotion. Deep acting, though less ‘false’ than surface acting, still may be difficult because it represents acting nonetheless. Organizational behaviour researchers are therefore looking to understand strategies people may employ that yield the results of acting, like showing appropriate emotions, but mitigate the effects of acting, like emotional exhaustion and workplace withdrawal. The goal is to give employees and managers tools to monitor and modify their emotional responses to workplace situations. Although the research is ongoing, studies indicate that effective emotion regulation techniques include acknowledging rather than suppressing our emotional responses to situations, and re-evaluating events after they occur.89 Another technique with potential for emotion regulation is venting. Research shows that the open expression of emotions can be helpful to the individual, as opposed to keeping emotions ‘bottled up’. Caution must be exercised, though, because venting, or expressing your frustration outwardly, touches other people. In fact, whether venting emotions helps the ‘venter’ feel better depends very much upon the listener’s response. If the listener doesn’t respond (many refuse to respond to venting), the venter actually feels worse. If the listener responds with expressions of support or validation, the venter feels better. Therefore, if we are going to vent to a co-worker, we need to choose someone who will respond sympathetically. Venting to the perceived offender rarely improves things and can result in heightening the negative emotions.90 As you might suspect, not everyone is equally good at regulating his or her emotions. Individuals who are higher in the personality trait of neuroticism have more trouble doing so and often find their moods are beyond their ability to control. Individuals who have lower levels of self-esteem are also less likely to try to improve their sad moods, perhaps because they are less likely than others to feel they deserve to be in a good mood.91 While it might seem in some ways desirable to regulate your emotions, research suggests there is a downside to trying to change the way you feel. Changing your emotions takes effort, and as we noted when discussing emotional labour, this effort can be exhausting. Sometimes attempts to change an emotion actually make the emotion stronger; for example, trying to talk yourself out of being afraid can make you focus more on what scares you, which makes you more afraid.92 From another perspective, research suggests that avoiding negative emotional experiences is less likely to lead to positive moods than does seeking out positive emotional experiences.93 For example, you’re more likely to experience a positive mood if you have a pleasant conversation with a friend than if you avoid an unpleasant conversation with a hostile co-worker. While emotion regulation techniques can help us cope with difficult workplace situations, research indicates that the effect varies. A recent study in Taiwan found that participants who worked for abusive supervisors reported emotional exhaustion and work withdrawal tendencies, but to different degrees based on the emotion regulation strategies they employed. This suggests that more research on the application of techniques needs to be done to help employees.94 Thus, while there is much promise in emotion regulation techniques, the best route to a positive workplace is to recruit positive-minded individuals and to train leaders to manage their moods, job attitudes and performance.95 The best leaders manage emotions as much as they do tasks and activities.

OB applications of emotions and moods 8  Apply concepts about emotions and moods to specific OB issues.

In this section, we assess how an understanding of emotions and moods can improve our ability to explain and predict the selection process in organizations, decision making, creativity, motivation, leadership, interpersonal conflict, negotiation, customer service, job attitudes and deviant workplace behaviours. We also look at how managers can influence our moods.

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Feelings in the workplace

FACE THE FACTS

●

Across the European Union, 39 per cent of health care workers reported hiding their feelings at work ‘always or most of the time’ whereas the lowest percentage was found in the agricultural sector (11 per cent).

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46 per cent of Belgian employees report being happy at work ‘often’, Spanish (40 per cent), French and German (38 per cent) with the British the least likely to be happy ‘often’ at work of the eight European countries surveyed at 35 per cent.

●

7 per cent of EU workers reported handling angry clients ‘(almost) all the time’.

Sources: The 9th Edenred-Ipsos Barometer, May 2014, ‘Let’s talk about time spent working?’; Eurofound, Fifth European Working Conditions Survey, Luxembourg: Publications Office of the European Union, 2012.

Selection One implication from the evidence to date on EI is that employers should consider it a factor in hiring employees, especially in jobs that demand a high degree of social interaction. In fact, more and more employers are starting to use EI measures to hire people. For example, it has been claimed that insurance sales agents who scored high on emotional competencies achieved sales figures which were more than twice those of their less emotionally competent colleagues. Others have found that highly emotionally competent debt collectors recovered more than double the amount of revenues compared with their typical co-workers.96 At L’Oréal, salespersons selected on EI scores outsold those hired using the company’s old selection procedure. On an annual basis, salespeople selected on the basis of emotional competence sold €81,000 more than other salespeople did, for a net revenue increase of around €2.3m.97

Decision making Traditional approaches to the study of decision making in organizations have emphasized rationality (as discussed in Chapter 5). More and more OB researchers, though, are finding that moods and emotions have important effects on decision making. Positive moods and emotions seem to help decision making. People in good moods or those experiencing positive emotions are more likely than others to use heuristics, or rules of thumb,98 to help make good decisions quickly. Positive emotions also enhance problem-solving skills so that positive people find better solutions to problems.99 OB researchers continue to debate the role of negative emotions and moods in decision making. Although one often-cited study suggested that depressed people reach more accurate judgements,100 more recent evidence has suggested that people who are depressed make poorer decisions. Why? Because depressed people are slower at processing information and tend to weigh all possible options rather than the most likely ones.101 Although it would seem that weighing all possible options is a good thing, the problem is that depressed people search for the perfect solution when there rarely is any solution perfect.

Creativity People who are in good moods tend to be more creative than people in bad moods.102 They produce more ideas, others think their ideas are original, and they tend to identify more creative options to problems.103 It seems that people who are experiencing positive moods or emotions are more flexible and open in their thinking, which may explain why they’re more creative.104 Supervisors should actively try to keep employees happy because doing so creates more good moods (employees like their leaders to encourage them and provide positive feedback on a job well done), which in turn leads people to be more creative.105 Some researchers, however, do not believe a positive mood makes people more creative. They argue that when people are in positive moods, they may relax (‘If I’m in a good mood, things must be going okay, and I must not need to think of new ideas’) and not engage in the critical thinking necessary for some forms of creativity.106 The answer may lie in thinking of moods somewhat differently. Rather than looking at positive or negative affect, it’s possible

OB applications of emotions and moods   227

to conceptualize moods as active feelings like anger, fear or elation and contrast these with deactivating moods like sorrow, depression or serenity. All the activating moods, whether positive or negative, seem to lead to more creativity, whereas deactivating moods lead to less.107 As well, we discussed earlier that other factors such as fatigue may boost creativity. A study of 428 students found they performed best on a creative problem-solving task when they were fatigued, suggesting that tiredness may free the mind to consider novel solutions.108

Motivation Two studies have highlighted the importance of moods and emotions on motivation. The first study had two groups of people solve a number of word puzzles. One group saw a funny video clip, which was intended to put the group in a good mood before having to solve the puzzles. The other group was not shown the clip and just started working on solving the word puzzles right away. The results? The positive-mood group reported higher expectations of being able to solve the puzzles, worked harder at them and solved more puzzles as a result.109 The second study found that giving people feedback – whether real or fake – about their performance influenced their mood, which then influenced their motivation.110 So, a cycle can exist in which positive moods cause people to be more creative, which leads to positive feedback from those observing their work. This positive feedback then further reinforces their positive mood, which may then make them perform even better, and so on. Both of these studies highlight the effects of mood and emotions on motivation and suggest that organizations that promote positive moods at work are likely to have more motivated workers.

Leadership Effective leaders rely on emotional appeals to help convey their messages.111 In fact, the expression of emotions in speeches is often the critical element that makes us accept or reject a leader’s message. ‘When leaders feel excited, enthusiastic, and active, they may be more likely to energise their subordinates and convey a sense of efficacy, competence, optimism, and enjoyment.’112 Politicians, as a case in point, have learned to show enthusiasm when talking about their chances of winning an election, even when polls suggest otherwise. Recent research has focused on the effects of transformational leaders, whom we can think of for now as extraordinary leaders (until we cover the topic more thoroughly in Chapter 12). Transformational leaders realize the effect emotion has on their followers and often freely share emotions. A study with Taiwanese military participants indicates that by sharing emotions, transformational leaders inspire positive emotions in their followers that lead to higher task performance.113 Corporate executives know emotional content is critical if employees are to buy into their vision of the company’s future and accept change. When higher-ups offer new visions, especially with vague or distant goals, it is often difficult for employees to accept the changes they’ll bring. By arousing emotions and linking them to an appealing vision, leaders increase the likelihood that managers and employees alike will accept change.114 Leaders who focus on inspirational goals also generate greater optimism and enthusiasm in employees, leading to more positive social interactions with co-workers and customers.115

Negotiation Negotiation is an emotional process; however, we often say a skilled negotiator has a ‘poker face’. The founder of Britain’s Poker Channel, Crispin Nieboer, stated, ‘It is a game of bluff and there is fantastic human emotion and tension, seeing who can bluff the longest.’116 Several studies have shown that a negotiator who feigns anger has an advantage over the opponent. Why? Because when a negotiator shows anger, the opponent concludes that the negotiator has conceded all that they can, so the opponent gives in.117 Anger should be used selectively in negotiation: angry negotiators who have less information or less power than their opponents have significantly worse outcomes.118 It appears that a powerful, better-informed individual will be less willing to share information or meet an angry opponent halfway. Displaying a negative emotion (such as anger) can be effective, but feeling bad about your performance appears to impair future negotiations. Individuals who do poorly in a negotiation

228  8 Emotions and moods

experience negative emotions, develop negative perceptions of their counterpart, and are less willing to share information or be cooperative in future negotiations.119 Interestingly, then, while moods and emotions have benefits at work, in negotiation, unless we’re putting up a false front (feigning anger), it seems that emotions may impair negotiator performance. In fact, a study found that people who suffered damage to the emotional centres of their brains (damage to the same part of the brain as Phineas Gage) may be the best negotiators because they’re not likely to overcorrect when faced with negative outcomes.120

Customer service

emotional contagion The process by which peoples’ emotions are caused by the emotions of others.

A worker’s emotional state influences customer service, which influences levels of repeat business and levels of customer satisfaction.121 Providing quality customer service makes demands on employees because it often puts them in a state of emotional dissonance. Over time, this state can lead to job burnout, declines in job performance and lower job satisfaction.122 In addition, employees’ emotions may transfer to the customer. Studies indicate a matching effect between employee and customer emotions, an effect that is called emotional ­contagion – the ‘catching’ of emotions from others.123 How does emotional contagion work? The primary explanation is that when someone experiences positive emotions and laughs and smiles at you, you begin to copy that person’s behaviour. So when employees express positive emotions, customers tend to respond positively. Emotional contagion is important because when customers catch the positive moods or emotions of employees, they shop longer. But what about negative emotions and moods? Are they contagious, too? Absolutely. When an employee feels unfairly treated by a customer, for example, it’s harder for him to display the positive emotions his organization expects of him.124

OB IN THE NEWS

Ignore customer’s emotions at your peril by Naomi Mapstone When Canadian musician Dave Carroll watched ground crew at O’Hare airport toss his beloved guitar around the tarmac back in 2009, YouTube, Twitter and Facebook were in their infancy. Customers were still mostly locked into traditional, often fruitless complaint mechanisms, and companies’ service lapses were not instant fodder for the masses. But a little creativity, inspired by United’s abysmal response to Carroll’s broken guitar, changed everything. His quirky song, ‘United breaks guitars’,

went viral, causing considerable damage to the airline’s reputation and linking corporate social media strategy to reputation and brand management. ‘Carroll became the personification of the vigilante, the customer avenger,’ says Yany Grégoire, associate professor at HEC Montreal who specialises in customer revenge. Today, anyone with a presence on Twitter, Instagram or Facebook can exact revenge for poor service or products.

Source: Mapstone, N. (2015) Companies ignore ‘customer avengers’ at their peril, Financial Times, 27 May. © The Financial Times Limited. All Rights Reserved. Pearson Education Ltd. is responsible for providing this adaptation of the original article.

Job attitudes Ever hear the advice ‘Never take your work home with you’, meaning that people should forget about their work once they go home? As it turns out, that’s easier said than done. Several studies have shown that people who had a good day at work tend to be in a better mood at home that evening. And people who had a bad day tend to be in a bad mood once they’re at

OB applications of emotions and moods   229

home.125 Evidence also suggests that people who have a stressful day at work have trouble relaxing after they get off work.126 Even though people do emotionally take their work home with them, by the next day, the effect is usually gone.127 So, although it may be difficult or even unnatural to ‘never take your work home with you’, it doesn’t appear that, for most people, a negative mood resulting from a bad day at work carries over to the next day.

Deviant workplace behaviours Anyone who has spent much time in an organization realizes that people often behave in ways that violate established norms and that threaten the organization, its members, or both. These actions are called workplace deviant behaviours (as we saw in Chapter 1).128 Many of these deviant behaviours can be traced to negative emotions. For instance, envy is an emotion that occurs when you resent someone for having something you don’t have but strongly desire – such as a better work assignment, larger office or higher salary. It can lead to malicious deviant behaviours. An envious employee could backstab another employee, negatively distort others’ successes and positively distort his own accomplishments.129 Angry people look for other people to blame for their bad mood, interpret other people’s behaviour as hostile, and have trouble considering others’ point of view.130 It’s not hard to see how these thought processes, too, can lead directly to verbal or physical aggression. Evidence suggests people who feel negative emotions are more likely than others to engage in short-term deviant behaviour at work such as gossiping or searching the internet.131 Of concern, a recent study with Pakistani telecommunications and IT participants found that anger correlated with more aggressive counterproductive behaviours such as abuse against others and production deviance, while sadness did not. Interestingly, neither anger nor sadness predicted workplace withdrawal, which suggests that managers need to take employee expressions of anger seriously because employees may stay with an organization and continue to act aggressively towards others.132 Once aggression starts, it’s likely that other people will become angry and aggressive, so the stage is set for a serious escalation of negative behaviour.

Safety and injury at work Research relating negative affectivity to increased injuries at work suggests employers might improve health and safety (and reduce costs) by ensuring workers aren’t engaged in potentially dangerous activities when they’re in a bad mood. Bad moods can contribute to injury at work in several ways.133 Individuals in negative moods tend to be more anxious, which can make them less able to cope effectively with hazards. A person who is always fearful will be more pessimistic about the effectiveness of safety precautions because she feels she’ll just get hurt anyway, or she might panic or freeze up when confronted with a threatening situation. Negative moods also make people more distractable, and distractions can obviously lead to careless behaviours.

How managers can influence moods In general, you can improve peoples’ moods by showing them a funny video clip, giving them a small bag of candy, or even having them taste a pleasant beverage.134 But what can companies do to improve their employees’ moods? Managers can use humour and give their employees small tokens of appreciation for work well done. Also, research indicates that when leaders are in good moods, group members are more positive, and as a result, the members cooperate better.135 But what about when leaders are sad? A recent study on emotional contagion found that leader displays of sadness increase the analytic performance of followers, perhaps because leaders are less engaged with them when sad. However, this study also indicated that leaders are perceived as more effective when they share positive emotions, and followers are more creative in a positive emotional environment.136

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Selecting positive team members can have a contagion effect because positive moods transmit from team member to team member. One study of professional cricket teams found players’ happy moods affected the moods of their team members and positively influenced their performance.137 It makes sense, then, for managers to select team members predisposed to positive moods.

SUMMARY Emotions and moods are similar in that both are affective in nature. But they’re also different – moods are more general and less contextual than emotions. And events do matter. The time of day and day of the week, stressful events, social activities and sleep patterns are some of the factors that influence emotions and moods. Emotions and moods have proven relevant for virtually every OB topic we study, and they have implications for managerial practice.

IMPLICATIONS FOR MANAGERS ●

● ●

●

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To foster effective decision making, creativity and motivation in employees, model positive emotions and moods as much as is authentically possible. Provide positive feedback to increase the positivity of employees. In the service sector, encourage positive displays of emotion, which make customers feel more positive and thus improve customer service interactions and negotiations. Regulate your intense emotional responses to an event by recognizing the legitimacy of the emotion and being careful to vent only to a supportive listener who is not involved in the event. Be careful not to ignore co-workers’ and employees’ emotions; do not assess others’ behaviour as if it were completely rational. As one consultant aptly put it, ‘You can’t divorce emotions from the workplace because you can’t divorce emotions from people.’138 Managers who understand the role of emotions and moods will significantly improve their ability to explain and predict their co-workers’ and employees’ behaviour.

The benefits and costs of displaying the emotions the organization wants you to

POINT/COUNTERPOINT

POINT Organizations today realize that good customer service means good business. After all, who wants to end a shopping trip at the grocery store with a surly cashier? Research clearly shows that organizations that provide good customer service have higher profits than those with poor customer service.139 An integral part of customer-service training is to set forth display rules to teach employees to interact with customers in a friendly, helpful, professional way – and evidence indicates that such rules work. Having display rules increases the odds that employees will display the emotions expected of them.140 As one Starbucks manager says, ‘What makes Starbucks different is our passion for what we do. We’re trying to

provide a great experience for people, with a great product. That’s what we all care about.’141 Starbucks may have good coffee, but a big part of the company’s growth has been the customer experience. For instance, the cashiers are friendly and will get to know you by name if you are a repeat customer. Asking employees to act friendly is good for them, too. Research shows that employees of organizations that require them to display positive emotions actually feel better as a result.142 And, if someone feels that being asked to smile is bad for him, he doesn’t belong in the service industry in the first place.

experiential exercise   231

COUNTERPOINT Organizations have no business trying to regulate the emotions of their employees. Companies should not be ‘the thought police’ and force employees to feel and act in ways that serve only organizational needs. Service employees should be professional and courteous, yes, but many companies expect them to take abuse and refrain from defending themselves. That’s wrong. As the philosopher Jean Paul Sartre wrote, we have a responsibility to be authentic – true to ourselves – and within reasonable limits organizations have no right to ask us to be otherwise. Service industries have no business teaching their employees to be smiling punching bags. Most customers might even prefer that employees be themselves. Employees shouldn’t be openly nasty or hostile, of course, but who

appreciates a fake smile? Think about trying on an outfit in a store and the assistant automatically says it looks ‘absolutely wonderful’ when you know it doesn’t and you sense the assistant is lying. Most customers would rather talk with a ‘real’ person than someone enslaved to an organization’s display rules. Furthermore, if an employee doesn’t feel like slapping on an artificial smile, then it’s only going to create dissonance between them and their employer.143 Finally, research shows that forcing display rules on employees takes a heavy emotional toll.144 It’s unnatural to expect someone to smile all the time or to passively take abuse from customers, clients or fellow employees. Organiz­ ations can improve their employees’ psychological health by encouraging them to be themselves, within reasonable limits.

QUESTIONS FOR REVIEW 1. What is the difference between emotions and moods?

What are the basic emotions and moods? 2. Are emotions rational? What functions do they serve? 3. What are the sources of emotions and moods? 4. What impact does emotional labour have on

employees?

6. What is the evidence for and against the existence of

emotional intelligence? 7. What are some strategies for emotion regulation and

their likely effects? 8. How do you apply concepts about emotions and moods

to specific OB issues?

5. What is affective events theory? What are its applications?

EXPERIENTIAL EXERCISE WHO CAN CATCH A LIAR? In this chapter, we discussed how people determine emotions from facial expressions. There has been research on whether people can tell whether someone is lying based on facial expression. Let’s see who is good at catching liars. Split up into teams and follow these instructions. 1. Randomly choose someone to be the team organizer.

Have this person write down on a piece of paper ‘T’ for truth and ‘L’ for lie. If there are, say, six people in the group (other than the organizer), then three people will get a slip with a ‘T’ and three a slip with an ‘L’. It’s important that all team members keep what’s on their paper a secret. 2. Each team member who holds a T slip needs to come

up with a true statement, and each team member who

holds an L slip needs to come up with a false statement. Try not to make the statement so outrageous that no one would believe it (for example, ‘I have flown to the moon’). 3. The organizer will have each member make his or her

statement. Group members should then examine the person making the statement closely to try to determine whether he or she is telling the truth or lying. Once each person has made his or her statement, the organizer will ask for a vote and record the tallies. 4. Each person should now indicate whether the state-

ment was the truth or a lie. 5. How good was your group at catching the liars? Were

some people good liars? What did you look for to determine if someone was lying?

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ETHICAL DILEMMA Are workplace romances unethical? A large percentage of married individuals first met in the workplace. One survey revealed that 40 per cent of all employees have been in an office romance. Another survey of UK workers reported more than seven out of 10  respondents said they were aware of a romance currently going on in their office. Given the amount of time people spend at work, this isn’t terribly surprising. Yet office romances pose sensitive ethical issues for organizations and employees. What rights and responsibilities do organizations have to regulate the romantic lives of their employees? Take the example of Julie Roehm, senior vice president (VP) of marketing at Wal-Mart, who began dating Sean Womack, VP of communications architecture. When Wal-Mart learned of the relationship, it fired both Roehm and Womack, arguing that the undisclosed relationship violated its policy against workplace romances. After her firing, Roehm sued Wal-Mart, claiming that the company breached her contract and damaged her reputation. Wal-Mart then countersued, alleging that Roehm showed favouritism on Womack’s behalf.

The Wal-Mart, Julie Roehm and Sean Womack saga shows that while workplace romances are personal matters, it’s hard to keep them out of the political complexities of organizational life.

Questions 1. Nearly three-quarters of organizations have no policies

governing workplace romances. Do you think organiz­ ations should have such policies in place? 2. Do you agree with Wal-Mart’s policy against work-

place romantic relationships? Why or why not? 3. Do you think it is ever appropriate for a supervisor to

date an employee under his or her supervision? Why or why not? 4. Some companies, such as Nike, openly try to recruit

couples. Do you think this is a good idea? How would you feel working in a department with a ‘couple’? Sources: J. Greenwald, ‘Employers are the losers in the dating game’, Workforce Week, 3 June 2007, pp. 1–2; ‘My year at Wal-Mart’, BusinessWeek, 12 February 2007; M. Crail, ‘Research update: workplace romance’, Personnel Today, 25 July 2006.

Should managers use emotional intelligence (EI) tests?

CASE INCIDENT 1

photos are not diverse. Also, participants who score high on EI tests tend to consider them fair; applicants who score lower may not perceive the tests to be fair and can thus consider the hiring organizations unfavourably – even if they score well on other assessments.

As we discussed in this chapter, the concept of emotional intelligence has raised some debate. One of the topic questions for managers is whether to use EI tests in the selection process. Here are some considerations: ●

●

There is no commonly accepted test. For instance, researchers have recently used the Mayer–Salovey– Caruso Emotional Intelligence Test (MSCEIT), the Trait Emotional Intelligence Questionnaire, and the newly developed Situational Judgement Test of Emotional Intelligence (SJT of EI) in studies. Researchers feel EI tests may need to be culturally specific because emotional displays vary by culture; thus, the interpretation of emotional cues differs. A recent study in India comparing the emotional intelligence scores for Indian and North American executives using the Emotional Competence Inventory (ECI-2) test found the results similar but not the same, suggesting the need for modification. Applicants may react negatively to taking an EI test in general, or to parts of it. The face recognition test, for example, may seem culturally biased to some if the subject

●

EI tests may not be predictive of performance for all types of jobs. In a study of 600 Romanian participants, results indicated that EI was valid for salespeople, public servants and CEOs of public hospitals, but these were all roles requiring significant social interaction. EI tests may need to be tailored for each position category or not be used when the position description does not warrant.

●

It remains somewhat unclear what EI tests are actually measuring. They may reflect personality or intelligence, in which case other measures might be better.

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There is not enough research on how emotional intelligence affects, for instance, counterproductive work behaviours. It may not be prudent to test and select applicants who are rated high on EI when we aren’t yet certain that everything about EI leads to desired workplace outcomes.

case incident 2   233

These concerns suggest EI tests should be avoided in hiring decisions. However, because research has indicated that emotional intelligence does predict job performance to some degree, managers should not be too hasty to dismiss the tests. Rather, those wishing to use EI in hiring decisions should be aware of these issues to make informed and ethical decisions about not only whom to hire, but how. Sources: D. Iliescu, A. Ilie, D. Ispas and A. Ion, ‘Emotional intelligence in personnel selection: applicant reactions, criterion, and incremental validity’, International Journal of Selection and Assessment, September 2012, pp. 347–58; R. Sharma, ‘Measuring social and emotional intelligence competencies in the Indian context’, Cross Cultural Management, 19 (2012), pp. 30–47; and S.  Sharma,

M. Gangopadhyay, E. Austin and M. K. Mandal, ‘Development and validation of a Situational Judgment Test of emotional intelligence’, International Journal of Selection and Assessment, March 2013, pp. 57–73.

Questions 1. Review the evidence for and against emotional intelligence and EI tests in this article and chapter.

2. Search for an EI test on the internet and complete it. ­Evaluate the test based on your experience of it and results.

3. Based on your conclusions to questions 1 and 2, do you believe emotional intelligence tests should be used in all hiring decisions?

Abusive customers cause emotions to run high Telephone customer-service representatives have a tough time these days. With automated telephone systems that create a labyrinth for customers, result in long hold times and make it difficult for them to speak to an actual human being, a customer’s frustration often settles in before the representative has had time to say ‘hello’. Says Donna Earl, an owner of a customer-service consulting firm, ‘By the time you get to the person you need to talk to, you’re mad.’ Erin Calabrese knows all too well just how mad customers can get. A customer-service representative at a financial services company, she still vividly recalls one of her worst experiences – with a customer named Jane. Jane called Calabrese over some charges on her credit card and began ‘ranting and raving’. ‘Your #%#% company, who do you think you are?’ yelled Jane. Though Calabrese tried to console the irate customer by offering a refund, Jane only called Calabrese an ‘idiot’. The heated conversation continued for almost 10 minutes before Calabrese, shaking, handed the phone to her supervisor and left her desk. Sometimes customers can be downright racist. One customer-service representative finally quit her job because she constantly heard racial remarks from customers after, she contends, they heard her accent. ‘By the time you leave, your head is spinning with all the complaints,’ she said. Unfortunately, these employees have little choice but to take the abuse. Many companies require customer-­ service employees to display positive emotions at all times to maintain satisfied customers. But the result could be an emotional nightmare that doesn’t necessarily end once the calls stop. Calabrese stated that she would frequently take her negative emotions home. The day after she received the abusive call from Jane, Calabrese went home and started a fight with her roommate. It was ‘an all-out battle,’ recalls Calabrese, ‘I just blew up.’ The former customer-service representative also recalls the effects of the abusive calls on

CASE INCIDENT 2

her family. ‘My children would say, “Mom, stop talking about your work. You’re home.” My husband would say the same thing,’ she said. Emma Parsons, who quit her job as a customer-service representative for the travel industry, was frustrated by the inability to do anything about abusive customers and the mood they’d put her in. ‘Sometimes you’d finish a call and you’d want to smash somebody’s face. I had no escape, no way of releasing.’ She said that if she did retaliate towards an abusive customer, her boss would punish her. Some companies train their representatives to defuse a customer’s anger and to avoid taking abuse personally, but the effort isn’t enough. Liz Ahearn of the consulting firm Radclyffe Group, says customer-service employees who work the phones are absent more frequently, are more prone to illness and are more likely to make stress-related disability claims than other employees. Thus, it is apparent that in the world of customer service, particularly when interactions take place over the phone, emotions can run high and the effects can be damaging. Although the adage ‘the customer comes first’ has been heard by many, companies should empower employees to decide when it is appropriate to put the customer second. Otherwise, employees are forced to deal with abusive customers, the effects of which can be detrimental to both the individual and the company.

Questions 1. From an emotional labour perspective, how does dealing with an abusive customer lead to stress and burnout?

2. If you were a recruiter for a customer-service call centre, what personality types would you prefer to hire and why? In other words, what individual differences are likely to affect whether an employee can handle customer abuse on a day-to-day basis?

234  8 Emotions and moods

3. Emotional intelligence is one’s ability to detect and manage emotional cues and information. How might emotional intelligence play a role in responding to abusive customers? What facets of emotional intelligence might employees who are able to handle abusive customers possess?

4. What steps should companies take to ensure that their employees are not victims of customer abuse? Should

companies allow a certain degree of abuse if that abuse results in satisfied customers and perhaps greater profit? What are the ethical implications of this? Source: Based on S. Shellenbarger, ‘Domino effect: the unintended results of telling off customer-service staff’, Wall Street Journal, 5 February 2004, p. D1.

ENDNOTES   1 See, for instance, C. D. Fisher and N. M. Ashkanasy, ‘The emerging role of emotions in work life: an introduction’, Journal of Organizational Behavior, special issue 2000, pp. 123–9; N. M. Ashkanasy, C. E. J. Hartel and W. J. Zerbe (eds), Emotions in the Workplace: Research, Theory, and Practice (Westport, CT: Quorum Books, 2000); N. M. Ashkanasy and C. S. Daus, ‘Emotion in the workplace: the new challenge for managers’, Academy of Management Executive, February 2002, pp. 76–86; and N. M. Ashkanasy, C. E. J. Hartel and C. S. Daus, ‘Diversity and emotion: the new frontiers in organizational behavior research’, Journal of Management, 28, 3 (2002), pp. 307–38.   2 See, for example, L. L. Putnam and D. K. Mumby, ‘Organizations, emotion and the myth of rationality’, in S. Fineman (ed.), Emotion in Organizations (Thousand Oaks, CA: Sage, 1993), pp. 36–57; and J. Martin, K. Knopoff and C. Beckman, ‘An alternative to bureaucratic impersonality and emotional labor: bounded emotionality at the Body Shop’, Administrative Science Quarterly, June 1998, pp. 429–69.   3 B. E. Ashforth and R. H. Humphrey, ‘Emotion in the workplace: a reappraisal’, Human Relations, February 1995, pp. 97–125.

12 R. Descartes, The Passions of the Soul (Indianapolis, IN: Hackett, 1989). 13 P. Ekman, Emotions Revealed: Recognizing Faces and Feelings to Improve Communication and Emotional Life (New York: Times Books/Henry Holt & Co., 2003). 14 P. R. Shaver, H. J. Morgan and S. J. Wu, ‘Is love a “basic” emotion?’, Personal Relationships, 3, 1 (March 1996), pp. 81–96. 15 Solomon, ‘Back to basics’. 16 Weiss and Cropanzano, ‘Affective events theory’, pp. 20–22. 17 Cited in R. D. Woodworth, Experimental Psychology (New York: Holt, 1938). 18 D. Watson, L. A. Clark and A. Tellegen, ‘Development and validation of brief measures of positive and negative affect: The PANAS Scales’, Journal of Personality and Social Psychology, 1988, pp. 1063–70. 19 A. Ben-Ze’ev, The Subtlety of Emotions (Cambridge, MA: MIT Press, 2000), p. 94. 20 Ibid.

  4 S. G. Barsade and D. E. Gibson, ‘Why does affect matter in organizations?’, Academy of Management Perspectives, February 2007, pp. 36–59.

21 J. T. Cacioppo and W. L. Gardner, ‘Emotion’, in Annual Review of Psychology, vol. 50 (Palo Alto, CA: Annual Reviews, 1999), pp. 191–214.

  5 See N. H. Frijda, ‘Moods, emotion episodes and emotions’, in M. Lewis and J. M. Haviland (eds), Handbook of Emotions (New York: Guilford Press, 1993), pp. 381–403.

22 D. Holman, ‘Call centres’, in D. Holman, T. D. Wall, C. Clegg, P. Sparrow and A. Howard (eds), The Essentials of the New Work Place: A Guide to the Human Impact of Modern Working Practices (Chichester, UK: Wiley, 2005), pp. 111–32.

  6 H. M. Weiss and R. Cropanzano, ‘Affective events theory: a theoretical discussion of the structure, causes and consequences of affective experiences at work’, in B. M. Staw and L. L. Cummings (eds), Research in Organizational Behavior, vol. 18 (Greenwich, CT: JAI Press, 1996), pp. 17–19.  7 See P. Ekman and R. J. Davidson (eds), The Nature of Emotions: Fundamental Questions (Oxford, UK: Oxford University Press, 1994).   8 Frijda, ‘Moods, emotion episodes and emotions’, p. 381.   9 See Ekman and Davidson (eds), The Nature of Emotions. 10 See, for example, P. Ekman, ‘An argument for basic emotions’, Cognition and Emotion, May/July 1992, pp. 169–200; C. E. Izard, ‘Basic emotions, relations among emotions, and emotion– cognition relations’, Psychological Bulletin, November 1992, pp. 561–65; and J. L. Tracy and R. W. Robins, ‘Emerging insights into the nature and function of pride’, Current Directions in Psychological Science, 16, 3 (2007), pp. 147–50. 11 R. C. Solomon, ‘Back to basics: on the very idea of “basic emotions”’, Journal for the Theory of Social Behaviour, 32, 2 (June 2002), pp. 115–44.

23 M. Eid and E. Diener, ‘Norms for experiencing emotions in different cultures: inter- and international differences’, Journal of Personality & Social Psychology, 81, 5 (2001), pp. 869–85. 24 O. Burkeman, ‘The power of negative thinking’, New York Times, 5 August 2012, p. 9. 25 E. Jaffe, ‘Positively negative’, Association for Psychological Science, November 2012, pp. 13–17. 26 M. Eid and E. Diener, ‘Norms for experiencing emotions in different cultures’. 27 L. M. Poverny and S. Picascia, ‘There is no crying in business’, www.womensmedia.com/new/Crying-at-Work.shtml. 28 A. R. Damasio, Descartes’ Error: Emotion, Reason, and the Human Brain (New York: Quill, 1994). 29 Ibid. 30 M.-A. Reinhard and N. Schwartz, ‘The influence of affective states on the process of lie detection’, Journal of Experimental Psychology, 18 (2012), pp. 377–89.

endnotes   235 31 L. Cosmides and J. Tooby, ‘Evolutionary psychology and the emotions’, in M. Lewis and J. M. Haviland-Jones (eds), Handbook of Emotions, 2nd edn (New York: Guilford Press, 2000), pp. 91–115. 32 D. M. Buss, ‘Cognitive biases and emotional wisdom in the evolution of conflict between the sexes’, Current Directions in Psychological Science, 10, 6 (December 2001), pp. 219–23. 33 K. Hundley, ‘An unspoken problem: two-thirds of female lawyers say they have experienced or seen harassment at work. But few want to talk about it’, St. Petersburg (Florida) Times, 25 April 2004, www.sptimes.com/2005/04/24/Business/An_unspoken_ problem.shtml. 34 K. N. Laland and G. R. Brown, Sense and Nonsense: Evolutionary Perspectives on Human Behaviour (Oxford: Oxford University Press, 2002). 35 R. J. Larsen and E. Diener, ‘Affect intensity as an individual difference characteristic: a review’, Journal of Research in Personality, 21 (1987), pp. 1–39. 36 D. Watson, Mood and Temperament (New York: Guilford Press, 2000). 37 B. P. Hasler, M. S. Mehl, R. R. Bootzin and S. Vazire, ‘Preliminary evidence of diurnal rhythms in everyday behaviors associated with positive affect’, Journal of Research in Personality, 42 (2008), pp. 1537–46. 38 D. Watson, Mood and Temperament (New York: Guilford Press, 2000). 39 A. A. Stone, J. E. Schwartz, D. Schkade, N. Schwarz, A. Krueger and D. Kahneman, ‘ A population approach to the study of emotion: diurnal rhythms of a working day examined with the day reconstruction method’, Emotion, 6 (2006), pp. 139–49. 40 S. A. Golder and M. W. Macy, ‘Diurnal and seasonal mood vary with work, sleep, and daylength across diverse cultures’, Science, 333, (2011), pp. 1878–81. 41 J. J. A. Denissen, L. Butalid, L. Penke and M. A. G. van Aken, ‘The effects of weather on daily mood: a multilevel approach’, Emotion, 8, 5 (2008), pp. 662–7; M. C. Keller, B. L. Fredrickson, O. Ybarra, S. Côté, K. Johnson, J. Mikels, A. Conway and T. Wagner, ‘A warm heart and a clear head: the contingent effects of weather on mood and cognition’, Psychological Science, 16 (2005) pp. 724–31; and Watson, Mood and Temperament. 42 Watson, Mood and Temperament, p. 100. 43 J. A. Fuller, J. M. Stanton, G. G. Fisher, C. Spitzmüller, S. S. Russell and P. C. Smith, ‘A lengthy look at the daily grind: time series analysis of events, mood, stress, and satisfaction’, Journal of Applied Psychology, 88, 6 (December 2003), pp. 1019–33. 44 G. Schaffer, ‘What’s good, when, and why?’, Association for Psychological Science, November 2012, pp. 27–9. 45 A. M. Isen, ‘Positive affect as a source of human strength’, in L. G. Aspinwall and U. Staudinger (eds), The Psychology of Human Strengths (Washington, DC: American Psycho-logical Association, 2003), pp. 179–95. 46 Watson, Mood and Temperament (2000). 47 D. Meinert, ‘Sleepless in Seattle . . . and Cincinnati and Syracuse’, HR Magazine, October 2012, pp. 55–7. 48 E. K. Miller and J. D. Cohen, ‘An integrative theory of prefrontal cortex function’, Annual Review of Neuroscience, 24 (2001), pp. 167–202. 49 B. A. Scott and T. A. Judge, ‘Tired and cranky? The effects of sleep quality on employee emotions and job satisfaction’,

working paper, Department of Management, University of Florida, 2005. 50 P. R. Giacobbi, H. A. Hausenblas and N. Frye, ‘A naturalistic assessment of the relationship between personality, daily life events, leisure-time exercise, and mood’, Psychology of Sport & Exercise, 6, 1 (January 2005), pp. 67–81. 51 L. L. Carstensen, M. Pasupathi, M. Ulrich and J. R. Nesselroade, ‘Emotional experience in everyday life across the adult life span’, Journal of Personality and Social Psychology, 79, 4 (2000), pp. 644–55. 52 M. LaFrance and M. Banaji, ‘Toward a reconsideration of the gender–emotion relationship’, in M. Clark (ed.), Review of Personality and Social Psychology, vol. 14 (Newbury Park, CA: Sage, 1992), pp. 178–97; and A. M. Kring and A. H. Gordon, ‘Sex differences in emotion: expression, experience, and physiology’, Journal of Personality and Social Psychology, March 1998, pp. 686–703. 53 M. G. Gard and A. M. Kring, ‘Sex differences in the time course of emotion’, Emotion, 7, 2 (2007), pp. 429–37; M. Jakupcak, K. Salters, K. L. Gratz and L. Roemer, ‘Masculinity and emotionality: an investigation of men’s primary and secondary emotional responding’, Sex Roles, 49 (2003), pp. 111–20; and M. Grossman and W. Wood, ‘Sex differences in intensity of emotional experience: a social role interpretation’, Journal of Personality and Social Psychology, November 1992, pp. 1010–22. 54 A. H. Fischer, P. M. Rodriguez Mosquera, A. E. M. van Vianen and A. S. R. Manstead, ‘Gender and culture differences in emotion’, Emotion, 4 (2004), pp. 84–7. 55 L. F. Barrett and E. Bliss-Moreau, ‘She’s emotional. He’s having a bad day: attributional explanations for emotion stereotypes’, Emotion, 9 (2009), pp. 649–58. 56 D. V. Becker, D. T. Kenrick, S. L. Neuberg, K. C. Blackwell and D. M. Smith, ‘The confounded nature of angry men and happy women’, Journal of Personality and Social Psychology, 92 (2007), pp. 179–190. 57 See J. A. Morris and D. C. Feldman, ‘Managing emotions in the workplace’, Journal of Managerial Issues, 9, 3 (1997), pp. 257–74; S. Mann, Hiding What We Feel, Faking What We Don’t: Understanding the Role of Your Emotions at Work (New York: HarperCollins, 1999); and S. M. Kruml and D. Geddes, ‘Catching fire without burning out: is there an ideal way to perform emotion labor?’, in N. M. Ashkanasy, C. E. J. Hartel and W. J. Zerbe, Emotions in the Workplace (New York: Quorum Books, 2000), pp. 177–88. 58 P. Ekman, W. V. Friesen and M. O’Sullivan, ‘Smiles when lying’, in P. Ekman and E. L. Rosenberg (eds), What the Face Reveals: Basic and Applied Studies of Spontaneous Expression Using the Facial Action Coding System (FACS) (London: Oxford University Press, 1997), pp. 201–16. 59 A. Grandey, ‘Emotion regulation in the workplace: a new way to conceptualize emotional labor’, Journal of Occupational Health Psychology, 5, 1 (2000), pp. 95–110; and R. Cropanzano, D. E. Rupp and Z. S. Byrne, ‘The relationship of emotional exhaustion to work attitudes, job performance, and organizational citizenship behavior’, Journal of Applied Psychology, February 2003, pp. 160–9. 60 A. R. Hochschild, ‘Emotion work, feeling rules, and social structure’, American Journal of Sociology, November 1979, pp. 551–75; W.-C. Tsai, ‘Determinants and consequences of employee displayed positive emotions’, Journal of Management, 27, 4 (2001), pp. 497–512; M. W. Kramer and J. A. Hess,

236  8 Emotions and moods ‘Communication rules for the display of emotions in organiz­ ational settings’, Management Communication Quarterly, August 2002, pp. 66–80; and J. M. Diefendorff and E. M. Richard, ‘Antecedents and consequences of emotional display rule perceptions’, Journal of Applied Psychology, April 2003, pp. 284–94. 61 Solomon, ‘Back to basics’. 62 C. M. Brotheridge and R. T. Lee, ‘Development and validation of the emotional labour scale’, Journal of Occupational & Organizational Psychology, 76 (2003), pp. 365–79. 63 U. R. Hulsheger, H. J. E. M. Alberts, A. Feinholdt and J. W. B. Lang, ‘Benefits of mindfulness at work: the role of mindfulness in emotion regulation, emotional exhaustion, and job satisfaction’, Journal of Applied Psychology, March 2013, pp. 310–25. 64 J. P. Trougakos, D. J. Beal, S. G. Green and H. M. Weiss, ‘Making the break count: an episodic examination of recovery activities, emotional experiences, and positive affective displays’, Academy of Management Journal, 51 (2008), pp. 131–46. 65 J. M. Diefendorff, R. J. Erickson, A. A. Grandey and J. J. Dahling, ‘Emotional display rules as work unit norms: a multilevel analysis of emotional labor among nurses’, Journal of Occupational Health Psychology, 16 (2011), pp. 170–86. 66 H. M. Weiss and R. Cropanzano, ‘An affective events approach to job satisfaction’, Research in Organizational Behavior, 18 (1996), pp. 1–74. 67 J. Basch and C. D. Fisher, ‘Affective events–emotions matrix: a classification of work events and associated emotions’, in N. M. Ashkanasy, C. E. J. Hartel and W. J. Zerbe (eds), Emotions in the Workplace (Westport, CT: Quorum Books, 2000), pp. 36–48. 68 See, for example, H. M. Weiss and R. Cropanzano, ‘Affective events theory’; and C. D. Fisher, ‘Antecedents and consequences of real-time affective reactions at work’, Motivation and Emotion, March 2002, pp. 3–30. 69 Based on Weiss and Cropanzano, ‘Affective events theory’, p. 42. 70 D. Ropeik, ‘Inside the mind of worry’, New York Times, 30 September 2012, p. 11. 71 N. M. Ashkanasy, C. E. J. Hartel and C. S. Daus, ‘Diversity and emotion: the new frontiers in organizational behavior research’, Journal of Management, 28, 3 (2002), p. 324. 72 Based on D. R. Caruso, J. D. Mayer and P. Salovey, ‘Emotional intelligence and emotional leadership’, in R. E. Riggio, S. E. Murphy and F. J. Pirozzolo (eds), Multiple Intelligences and Leadership (Mahwah, NJ: Lawrence Erlbaum, 2002), p. 70. 73 This section is based on D. Goleman, Emotional Intelligence (New York: Bantam, 1995); P. Salovey and D. Grewal, ‘The science of emotional intelligence’, Current Directions in Psychological Science, 14, 6 (2005), pp. 281–5; M. Davies, L. Stankov and R. D. Roberts, ‘Emotional intelligence: in search of an elusive construct’, Journal of Personality and Social Psychology, October 1998, pp. 989–1015; D. Geddes and R. R. Callister, ‘Crossing the line(s): a dual threshold model of anger in organizations’, Academy of Management Review, 32, 3 (2007), pp. 721–46; and J. Ciarrochi, J. P. Forgas and J. D. Mayer (eds), Emotional Intelligence in Everyday Life (Philadelphia, PA: Psychology Press, 2001). 74 D. Goleman, Working With Emotional Intelligence (New York: Bantam Books, 1998). 75 R. Gilkey, R. Caceda and C. Kilts, ‘When emotional reasoning trumps IQ’, Harvard Business Review, September 2010, p. 27. 76 F. J. Landy, ‘Some historical and scientific issues related to research on emotional intelligence’, Journal of Organizational Behavior, 26, 4 (June 2005), pp. 411–24.

77 K. S. Law, C.-S. Wong and L. J. Song, ‘The construct and criterion validity of emotional intelligence and its potential utility for management studies’, Journal of Applied Psychology, 89, 3 (2004), pp. 483–96. 78 D. L. Joseph and D. A. Newman, ‘Emotional intelligence: an integrative meta-analysis and cascading model’, Journal of Applied Psychology, 95 (2010), pp. 54–78. 79 R. Bar-On, D. Tranel, N. L. Denburg and A. Bechara, ‘Exploring the neurological substrate of emotional and social intelligence’, Brain, 126, 8 (August 2003), pp. 1790–1800. 80 P. A. Vernon, K. V. Petrides, D. Bratko and J. A. Schermer, ‘A behavioral genetic study of trait emotional intelligence’, Emotion, 8, 5 (2008), pp. 635–42. 81 E. A. Locke, ‘Why emotional intelligence is an invalid concept’, Journal of Organizational Behavior, 26, 4 (June 2005), pp. 425–31. 82 J. D. Mayer, R. D. Roberts and S. G. Barsade, ‘Human abilities: emotional intelligence’, Annual Review of Psychology, 59 (2008), pp. 507–36; H. A. Elfenbein, ‘Emotion in organizations: a review and theoretical integration’, Academy of Management Annals, 1 (2008), pp. 315–86; and D. L. Joseph and D. A. Newman, ‘Emotional intelligence: an integrative meta-analysis and cascading model’, Journal of Applied Psychology, 95 (2010), pp. 54–78. 83 J. M. Conte, ‘A review and critique of emotional intelligence measures’, Journal of Organizational Behavior, 26, 4 (June 2005), pp. 433–40; and M. Davies, L. Stankov and R. D. Roberts, ‘Emotional intelligence: in search of an elusive construct’, Journal of Personality and Social Psychology, 75, 4 (1998), pp. 989–1015. 84 T. Decker, ‘Is emotional intelligence a viable concept?’, Academy of Management Review, 28, 2 (April 2003), pp. 433–40; and Davies, Stankov and Roberts, ‘Emotional intelligence: in search of an elusive construct’. 85 D. L. Joseph and D. A. Newman, ‘Emotional intelligence: an integrative meta-analysis and cascading model’, Journal of Applied Psychology, 95 (2010), pp. 54–78. 86 S. L. Koole, ‘The psychology of emotion regulation: an integrative review’, Cognition and Emotion, 23 (2009), pp. 4–41; H. A. Wadlinger and D. M. Isaacowitz, ‘Fixing our focus: training attention to regulate emotion’, Personality and Social Psychology Review, 15 (2011), pp. 75–102. 87 D. H. Kluemper, T. DeGroot and S. Choi, ‘Emotion management ability: predicting task performance, citizenship, and deviance’, Journal of Management, May 2013, pp. 878–905. 88 B. A. Scott, C. M. Barnes and D. T. Wagner, ‘Chameleonic or consistent? A multilevel investigation of emotional labor variability and self-monitoring’, Academy of Management Journal, 55, 4 (2012), pp. 905–26. 89 T. L. Webb, E. Miles and P. Sheeran, ‘Dealing with feeling: a meta-analysis of the effectiveness of strategies derived from the process model of emotion regulation’, Psychological Bulletin, 138, 4 (2012), pp. 775–808; S. Srivastava, M. Tamir, K. M. McGonigal, O. P. John and J. J. Gross, ‘The social costs of emotional suppression: a prospective study of the transition to college’, Journal of Personality and Social Psychology, 96 (2009), pp. 883–97; Y. Liu, L. M. Prati, P. L. Perrewé and R. A. Brymer, ‘Individual differences in emotion regulation, emotional experiences at work, and work-related outcomes: a two-study investigation’, Journal of Applied Social Psychology, 40 (2010), pp. 1515–38; and H. A. Wadlinger and D. M. Isaacowitz, ‘Fixing our focus: training attention to regulate emotion’, Personality and Social Psychology Review, 15 (2011), pp. 75–102.

endnotes   237   90 F. Nils and B. Rimé, ‘Beyond the myth of venting: social sharing modes determine the benefits of emotional disclosure’, European Journal of Social Psychology, 42 (2012), pp. 672–81; and J. D. Parlamis, ‘Venting as emotion regulation the influence of venting responses and respondent identity on anger and emotional tone’, International Journal of Conflict Management, 23 (2012), pp. 77–96.   91 J. V. Wood, S. A. Heimpel, L. A. Manwell and E. J. Whittington, ‘This mood is familiar and I don’t deserve to feel better anyway: mechanisms underlying self-esteem differences in motivation to repair sad moods’, Journal of Personality and Social Psychology, 96 (2009), pp. 363–80.   92 S. L. Koole, ‘The psychology of emotion regulation: an integrative review’, Cognition and Emotion, 23 (2009), pp. 4–41.   93 L. K. Barber, P. G. Bagsby and D. C. Munz, ‘Affect regulation strategies for promoting (or preventing) flourishing emotional health’, Personality and Individual Differences, 49 (2010), pp. 663–6.  94 S.-C. S. Chi and S.-G. Liang, ‘When do subordinates’ emotion-regulation strategies matter? Abusive supervision, subordinates’ emotional exhaustion, and work withdrawal’, Leadership Quarterly, February 2013, pp. 125–37.  95 R. H. Humphrey, ‘How do leaders use emotional labor?’, Journal of Organizational Behavior, July 2012, pp. 740–4.   96 D. Goleman, Emotional Intelligence (New York: Bantam Books, 1995); J. Bachman, S. Stein, K. Campbell and A. Sitarenios ‘Emotional intelligence in the collection of debt’, International Journal of Selection and Assessment, 8, 3 (2000), pp. 14–20.   97 L. M. J. Spencer, D. C. McClelland and S. Kelner, Competency Assessment Methods: History and State of the Art (Boston, MA: Hay/McBer, 1997).   98 J. Park and M. R. Banaji, ‘Mood and heuristics: the influence of happy and sad states on sensitivity and bias in stereotyping’, Journal of Personality and Social Psychology, 78, 6 (2000), pp. 1005–23.  99 See A. M. Isen, ‘Positive affect and decision making’, in M. Lewis and J. M. Haviland-Jones (eds), Handbook of Emotions, 2nd edn (New York: Guilford, 2000), pp. 261–77. 100 L. B. Alloy and L. Y. Abramson, ‘Judgement of contingency in depressed and nondepressed students: sadder but wiser?’, Journal of Experimental Psychology: General, 108 (1979), pp. 441–85. 101 N. Ambady and H. M. Gray, ‘On being sad and mistaken: mood effects on the accuracy of thin-slice judgments’, Journal of Personality and Social Psychology, 83, 4 (2002), pp. 947–61. 102 A. M. Isen, ‘On the relationship between affect and creative problem solving’, in S. W. Russ (ed.), Affect, Creative Experience and Psychological Adjustment (Philadelphia, PA: Brunner/Mazel, 1999), pp. 3–17; and S. Lyubomirsky, L. King and E. Diener, ‘The benefits of frequent positive affect: does happiness lead to success?’, Psychological Bulletin, 131, 6 (2005), pp. 803–55. 103 M. J. Grawitch, D. C. Munz and E. K. Elliott, ‘Promoting creativity in temporary problem-solving groups: the effects of positive mood and autonomy in problem definition on idea-generating performance’, Group Dynamics, 7, 3 (September 2003), pp. 200–13. 104 S. Lyubomirsky, L. King and E. Diener, ‘The benefits of frequent positive affect: does happiness lead to success?’, Psychological Bulletin, 13 (2005), pp. 808–55. 105 N. Madjar, G. R. Oldham and M. G. Pratt, ‘There’s no place like home? The contributions of work and nonwork creativity support to employees’ creative performance’, Academy of Management Journal, 45, 4 (2002), pp. 757–67.

106 J. M. George and J. Zhou, ‘Understanding when bad moods foster creativity and good ones don’t: the role of context and clarity of feelings’, Journal of Applied Psychology, 87, 4 (August 2002), pp. 687–697; and J. P. Forgas and J. M. George, ‘Affective influences on judgments and behavior in organiz­ ations: an information processing perspective’, Organizational Behavior and Human Decision Processes, 86, 1 (2001), pp. 3–34. 107 C. K. W. De Dreu, M. Baas and B. A. Nijstad, ‘Hedonic tone and activation level in the mood-creativity link: toward a dual pathway to creativity model’, Journal of Personality and Social Psychology, 94, 5 (2008), pp. 739–56; J. M. George and J. Zhou, ‘Dual tuning in a supportive context: joint contributions of positive mood, negative mood, and supervisory behaviors to employee creativity’, Academy of Management Journal, 50, 3 (2007), pp. 605–22. 108 M. B. Wieth and R. T. Zacks, ‘Time of day effects on problem solving: when the non-optimal is optimal’, Thinking & Reasoning, 17 (2011), pp. 387–401. 109 A. Erez and A. M. Isen, ‘The influence of positive affect on the components of expectancy motivation’, Journal of Applied Psychology, 87, 6 (2002), pp. 1055–67. 110 R. Ilies and T. A. Judge, ‘Goal regulation across time: the effect of feedback and affect’, Journal of Applied Psychology, 90, 3 (May 2005), pp. 453–67. 111 K. M. Lewis, ‘When leaders display emotion: how followers respond to negative emotional expression of male and female leaders’, Journal of Organizational Behavior, March 2000, pp. 221–34; and J. M. George, ‘Emotions and leadership: the role of emotional intelligence’, Human Relations, August 2000, pp. 1027–55. 112 J. M. George, ‘Trait and state affect’, in K. R. Murphy (ed.) Individual Difference and Behavior in Organizations (San Fransisco, CA: Jossey-Bass, 1996), pp. 145–71. 113 S. G. Liang and S.-C. S. Chi, ‘Transformational leadership and follower task performance: the role of susceptibility to positive emotions and follower positive emotions’, Journal of Business and Psychology, March 2013, pp. 17–29. 114 Ashforth and Humphrey, ‘Emotion in the Workplace’, p. 116. 115 J. E. Bono, H. J. Foldes, G. Vinson and J. P. Muros, ‘Workplace emotions: the role of supervision and leadership’, Journal of Applied Psychology, 92, 5 (2007), pp. 1357–67. 116 N. Reynolds, ‘Whiz-kids gamble on TV channel for poker’, Telegraph, 16 April 2005, www.telegraph.co.uk. 117 G. A. Van Kleef, C. K. W. De Dreu and A. S. R. Manstead, ‘The interpersonal effects of emotions in negotiations: a motivated information processing approach’, Journal of Personality and Social Psychology, 87, 4 (2004), pp. 510–28; and G. A. Van Kleef, C. K. W. De Dreu and A. S. R. Manstead, ‘The interpersonal effects of anger and happiness in negotiations’, Journal of Personality and Social Psychology, 86, 1 (2004), pp. 57–76. 118 E. van Dijk, G. A. Van Kleef, W. Steinel and I. van Beest, ‘A social functional approach to emotions in bargaining: when communicating anger pays and when it backfires’, Journal of Personality and Social Psychology, 94, 4 (2008), pp. 600–614. 119 K. M. O’Connor and J. A. Arnold, ‘Distributive spirals: negotiation impasses and the moderating role of disputant self-efficacy’, Organizational Behavior and Human Decision Processes, 84, 1 (2001), pp. 148–76. 120 B. Shiv, G. Loewenstein, A. Bechara, H. Damasio and A. R. Damasio, ‘Investment behavior and the negative side of emotion’, Psychological Science, 16, 6 (2005), pp. 435–39.

238  8 Emotions and moods 121 W.-C. Tsai and Y.-M. Huang, ‘Mechanisms linking employee affective delivery and customer behavioral intentions’, Journal of Applied Psychology, October 2002, pp. 1001–08. 122 Grandey, ‘When “the show must go on”’. 123 See P. B. Barker and A. A. Grandey, ‘Service with a smile and encounter satisfaction: emotional contagion and appraisal mechanisms’, Academy of Management Journal, 49, 6 (2006), pp. 1229–38; and S. D. Pugh, ‘Service with a smile: emotional contagion in the service encounter’, Academy of Management Journal, October 2001, pp. 1018–27. 124 D. E. Rupp and S. Spencer, ‘When customers lash out: the effects of customer interactional injustice on emotional labor and the mediating role of emotions’, Journal of Applied Psychology, 91, 4 (2006), pp. 971–78; and Tasi and Huang, ‘Mechanisms linking employee affective delivery and customer behavioral intentions’. 125 R. Ilies and T. A. Judge, ‘Understanding the dynamic relationships among personality, mood, and job satisfaction: a field experience sampling study’, Organizational Behavior and Human Decision Processes, 89 (2002), pp. 1119–39. 126 R. Rau, ‘Job strain or healthy work: a question of task design’, Journal of Occupational Health Psychology, 9, 4 (October 2004), pp. 322–38; and R. Rau and A. Triemer, ‘Overtime in relation to blood pressure and mood during work, leisure, and night time’, Social Indicators Research, 67, 1–2 (June 2004), pp. 51–73.

132 A. K. Khan, S. Ouratulain and J. R. Crawshaw, ‘The mediating role of discrete emotions in the relationship between injustice and counterproductive work behaviors: a study in Pakistan’, Journal of Business and Psychology, March 2013, pp. 49–61. 133 R. D. Iverson and P. J. Erwin, ‘Predicting occupational injury: the role of affectivity’, Journal of Occupational and Organizational Psychology, 70, 2 (1997), pp. 113–28; Kaplan, Bradley, Luchman and Haynes, ‘On the role of positive and negative affectivity in job performance: a meta-analytic investigation’; and J. Maiti, ‘Design for worksystem safety using employees’ perception about safety’, Work ­– A Journal of Prevention Assessment & Rehabilitation, 41 (2012), pp. 3117–22. 134 A. M. Isen, A. A. Labroo and P. Durlach, ‘An influence of product and brand name on positive affect: implicit and explicit measures’, Motivation & Emotion, 28, 1 (March 2004), pp. 43–63. 135 T. Sy, S. Côté and R. Saavedra, ‘The contagious leader: impact of the leader’s mood on the mood of group members, group affective tone, and group processes’, Journal of Applied Psychology, 90, 2 (2005), pp. 295–305. 136 V. A. Visser, D. van Knippenberg, G. van Kleef and B. Wisse, ‘How leader displays of happiness and sadness influence follower performance: emotional contagion and creative versus analytical performance’, Leadership Quarterly, February 2013, pp. 172–88.

127 T. A. Judge and R. Ilies, ‘Affect and job satisfaction: a study of their relationship at work and at home’, Journal of Applied Psychology, 89 (2004), pp. 661–73.

137 P. Totterdell, ‘Catching moods and hitting runs: mood linkage and subjective performance in professional sports teams’, Journal of Applied Psychology, 85, 6 (2000), pp. 848–59.

128 See R. J. Bennett and S. L. Robinson, ‘Development of a measure of workplace deviance’, Journal of Applied Psychology, June 2000, pp. 349–60. See also P. R. Sackett and C. J. DeVore, ‘Counter productive behaviors at work’, in N. Anderson, D. S. Ones, H. K. Sinangil and C. Viswesvaran (eds), Handbook of Industrial, Work & Organizational Psychology, vol. 1 (Thousand Oaks, CA: Sage, 2001), pp. 145–64.

138 S. Nelton, ‘Emotions in the workplace’, Nation’s Business, February 1996, p. 25.

129 A. G. Bedeian, ‘Workplace envy’, Organizational Dynamics, Spring 1995, p. 54; and Y. Cohen-Charash, ‘Episodic envy’, Journal of Applied Social Psychology, September 2009, pp. 2128–73. 130 S. C. Douglas, C. Kiewitz, M. Martinko, P. Harvey, Y. Kim and J. U. Chun, ‘Cognitions, emotions, and evaluations: an elaboration likelihood model for workplace aggression’, Academy of Management Review, 33, 2 (2008), pp. 425–51. 131 K. Lee and N. J. Allen, ‘Organizational citizenship behavior and workplace deviance: the role of affect and cognition’, Journal of Applied Psychology, 87, 1 (2002), pp. 131–42; T. A. Judge, B. A. Scott and R. Ilies, ‘Hostility, job attitudes, and workplace deviance: test of a multilevel model’, Journal of Applied Psychology, 91, 1 (2006), 126–38; and S. Kaplan, J. C. Bradley, J. N. Luchman and D. Haynes, ‘On the role of positive and negative affectivity in job performance: a meta-analytic investigation’, Journal of Applied Psychology, 94, 1 (2009), pp. 162–76.

139 H. Liao and A. Chuang, ‘A multilevel investigation of factors influencing employee service performance and customer outcomes’, Academy of Management Journal, 47, 1 (2004), pp. 41–58. 140 D. J. Beal, J. P. Trougakos, H. M. Weiss and S. G. Green, ‘Episodic processes in emotional labor: perceptions of affective delivery and regulation strategies’, Journal of Applied Psychology, 91, 5 (2006), pp. 1057–65. 141 Starbucks.com, 16 May 2005. 142 D. Zapf and M. Holz, ‘On the positive and negative effects of emotion work in organizations’, European Journal of Work and Organizational Psychology, 15, 1 (2006), pp. 1–28. 143 D. Zapf, ‘Emotion work and psychological well-being: a review of the literature and some conceptual considerations’, Human Resource Management Review, 12, 2 (2002), pp. 237–68. 144 J. E. Bono and M. A. Vey, ‘Toward understanding emotional management at work: a quantitative review of emotional labor research’, in C. E. Härtel and W. J. Zerbe (eds), Emotions in Organizational Behavior (Mahwah, NJ: Lawrence Erlbaum Associates, Publishers, 2005), pp. 213–33.

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CHAPTER 9 Foundations of group behaviour Learning objectives After studying this chapter, you should be able to: 1 Define group and differentiate between different types of groups. 2 Identify the five stages of group development. 3 Show how role requirements change in different situations. 4 Demonstrate how norms and status exert influence on an individual’s behaviour. 5 Show how group size affects group performance. 6 Contrast the benefits and disadvantages of cohesive groups. 7 Explain the implications of diversity for group effectiveness. 8 Contrast the strengths and weaknesses of group decision making. 9 Compare the effectiveness of interacting, brainstorming and the nominal group technique.

Madness is the exception in individuals but the rule in groups. Friedrich Nietzsche

SUPERGROUP: LEARNING FROM THE ROLLING STONES

London Entertainment / Alamy Stock Photo

The Rolling Stones are one of the world’s most successful rock bands. So what has made the group so extraordinary and kept them together for more than half a century despite their many public feuds? Their story provides key lessons for working in groups. Cohesion is the invisible force that keeps a group together and is a basis for high performance as a unit. And perhaps nowhere is cohesion better demonstrated than by the career of the Rolling Stones. In the beginning it was music and a shared passion for American R&B that brought them together. A Best of Muddy Waters album provided the initial spark when Keith Richards and Mick Jagger met at the railway station in their hometown of Dartford, Kent, in 1960. One of the tracks on it – ‘Rollin’ Stone’ – gave the group their name. Early cohesion came from spending a lot of time together. The band lived, played and went everywhere together, piled in the back of a van along with their kit. Shared experiences and especially early success helped reinforce the team’s gelling together. Cohesion grew based on the team’s recognition that each member of the band was a master of his own instrument or voice. The Stones also represented a fusion of different personalities. On stage Jagger is a natural showman. He also takes the lead as the driving force in the Stones’ organization and their highly lucrative business empire. Compared to Jagger’s vision and need for a clear plan, Richards claims his only ambition has been to be in the Rolling Stones and to make records. Taking things day by day, ‘happy to just wake up’, he writes music and lives much more loosely. If Jagger is the band’s CEO, Richards is its musical spirit. In his words, ‘Mick’s Rock, I’m Roll.’

These differences between Jagger and Richards are kept in balance by the solid, straightforward nature of drummer Charlie Watts and the diplomatic approach of guitarist Ronnie Wood. With his infectious enthusiasm, coupled with the instinct of a seasoned peace negotiator, Wood has acted as middleman between Jagger and Richards more than once. Over 50 years of togetherness the Stones have developed a set of practices and rules to help them stay performing at the highest level. For example, they have evolved and adopted a method of decision making that works for them. In many instances, Jagger can take the lead, taking input from the others and with Richards effectively having veto rights. Group dynamics theorist Bruce Tuckman’s model of group development states that groups go through four stages in becoming effective. First is forming, where the members join the group and objectives are shared. Second is storming, in which the initial excitement and hope gives way to differences in opinion and approach, leading to conflict. The third stage is norming, where the team discovers ways of resolving conflict and of working together. This leads to the final stage: performing, when the team has become effective at working as a unit. The Stones’ story suggests that the best groups go back over these stages again and again. They are able to form and reform, as needed, bringing in new talent to help maintain the high standards and add new ideas. They also take breaks and consciously choose to reform and recommit to the common purpose and each other. The core of the Stones’ success is the energy generated by the creative abrasion among the team members. Storming has provided an important edge in keeping the Stones vibrant. Their determination to put consistent effort into rehearsals and preparing for their concerts demonstrates norming activity that is revisited on an ongoing basis. The Stones show that teamwork does not come easy. A danger of the norming phase is that teams become so comfortable with each other that their creative edge is dulled. For the Rolling Stones, the storming seems built-in, especially between Jagger and Richards. Part of their longevity comes from having developed the protocols to deal with the recurring storms, harmonizing the diverse skills but not averaging them. The Rolling Stones keep going together because they can, and because they still want to. As long as the fans want to see them perform, the Stones will play. The buzz of performance is the ultimate, and only, satisfaction. On stage they are free to share what Richards calls the real release: ‘Once we’re up there doing it, it’s sheer fun and joy.’

Source: Adapted from Superteams, Penguin Portfolio (Tu, K. 2012) Copyright © Khoi Tu, 2012, Reproduced by permission of Penguin Books Ltd

242  9 Foundations of group behaviour

The Rolling Stones provide an example of how when individuals come together to form a group, something outstanding can be achieved. Groups can be highly effective, but they also have their pitfalls.

REFLECTION What is your attitude towards working in groups? Is it generally positive or negative?

1 Define group and differentiate between different types of groups.

The objectives of this chapter and Chapter 10 are to introduce you to basic group concepts, provide you with a foundation for understanding how groups work, and show you how to create effective teams. Let’s begin by defining group and explaining why people join groups.

Defining and classifying groups group Two or more individuals, interacting and interdependent, who have come together to achieve particular objectives. formal group A designated work group defined by an organization’s structure. informal group A group that is neither formally structured nor organizationally determined; such a group appears in response to the need for social contact. social identity theory Perspective that considers when and why individuals consider themselves members of groups.

ingroup favouritism Perspective in which we see members of our ingroup as better than other people, and people not in our group as all the same.

We define a group as two or more individuals, interacting and interdependent, who have come together to achieve particular objectives. Groups can be either formal or informal. By formal groups, we mean those defined by the organization’s structure, with designated work assignments establishing tasks. In formal groups, the behaviours that team members should engage in are stipulated by and directed towards organizational goals. Six members making up an airline flight crew are an example of a formal group. In contrast, informal groups are alliances that are neither formally structured nor organizationally determined. These groups are natural formations in the work environment that appear in response to the need for social contact. Three employees from different departments who regularly eat lunch or have coffee together are an example of an informal group. These types of interactions among individuals, even though informal, deeply affect their behaviour and performance.

Why do people form groups? Why do people form groups, and why do they feel so strongly about them? Consider the celebrations that follow a sports team’s winning a national championship. Fans have staked their own self-image on the performance of someone else. The winner’s supporters are elated and sales of team-related shirts, jackets and hats declaring support for the team skyrocket. Fans of the losing team feel dejected, even embarrassed. Our tendency to take personal pride or offence for the accomplishments of a group is the territory of social identity theory. Social identity theory proposes that people have emotional reactions to the failure or success of their group because their self-esteem gets tied into the group’s performance.1 When your group does well, you bask in reflected glory and your own self-esteem rises. When your group does poorly, you might feel bad about yourself, or you might even reject that part of your identity, like ‘fair weather fans’. Social identities can even lead people to experience pleasure as a result of seeing another group suffer. We often see these feelings of schadenfreude as the joy fans experience when a disliked team loses.2 People develop many identities through the course of their lives. You might define yourself in terms of the organization you work for, the city you live in, your profession, your ethnicity, or your gender.3 Social identities help us understand who we are and where we fit in with other people, but they can have a negative side as well. Beyond feelings of schadenfreude, ingroup favouritism occurs when we see members of our ingroup as better than other people and people not in our group as all the same. This obviously paves the way for stereotyping.

Soren Andersson/Afp/Getty

Stages of group development   243

The employees of the Swedish transportation company Scania shown here exercising at a sports complex comprise an informal group. At different company locations, Scania offers employees free access to sports facilities during working hours. The company puts a high priority on employee health and offers employees many opportunities to reinforce an active lifestyle. The informal groups that participate in sports and exercise activities are neither formally structured nor organizationally determined. However, informal groups like these can fulfil employee desires for social interaction at work.

When do people develop a social identity? Several characteristics make a social identity important to a person: ●

●

●

●

Similarity. Not surprisingly, people who have the same values or characteristics as other members of their organization have higher levels of group identification.4 Demographic similarity can also lead to stronger identification for new hires, while those who are demographically different may have a hard time identifying with the group as a whole.5 Distinctiveness. People are more likely to notice identities that show how they are different from other groups. For example, veterinarians who work in veterinary medicine (where everyone is a veterinarian) identify with their organization, and veterinarians in non-­ veterinary medicine fields such as animal research or food inspection (where being a veterinarian is a more distinctive characteristic) identify with their profession.6 Status. Because people use identities to define themselves and increase self-esteem, it makes sense that they are most interested in linking themselves to high-status groups. People are likely to not identify with a low status organization and will be more likely to quit in order to leave that identity behind.7 Uncertainty reduction. Membership in a group also helps some people understand who they are and how they fit into the world.8 One study showed how the creation of a spin-off company produced questions about how employees should develop a unique identity that corresponded more closely to what the division was becoming.9 Managers worked to define and communicate an idealized identity for the new organization when it became clear employees were confused.

Stages of group development 2  Identify the five stages of group development.

Groups generally pass through a predictable sequence in their evolution. We call this sequence the five-stage model of group development. Although research indicates that not all groups follow this pattern,10 it is a useful framework for understanding group development. In this

244  9 Foundations of group behaviour

EMPLOYABILITY AND GROUPS Sam Campbell had just completed his finance degree and soon landed a job at an education service company. When reflecting on starting work, Sam recalls one aspect that really surprised him – how often he had to work with others, the groups he became a part of, and the seemingly endless meetings. ‘I thought that I would be working mostly alone. It was the start of my career and so I was at the bottom of the ladder and only given very routine tasks. I thought I would be at a desk in the corner all day with my head down.’ The reality was different. He was a part of the finance group and they all sat together in a small office. They formally met at the start of every day and informally during breaks and after work. He was also involved with projects involving people from other parts of the business. ‘Soon I came to realize that I was never really working alone. The finance group depended

five-stage groupdevelopment model The five distinct stages groups go through: forming, storming, norming, performing and adjourning. forming stage The first stage in group development, characterized by much uncertainty. storming stage The second stage in group development, characterized by intragroup conflict. norming stage The third stage in group development, characterized by close relationships and cohesiveness. performing stage The fourth stage in group development, during which the group is fully functional.

on me doing my work efficiently and not make mistakes. And even my social life revolved around this group.’ But Sam also realized that being a part of a group was not always easy. He particularly remembers the finance meetings and how he found it very difficult to contribute. He noticed that other group members would just agree with whatever the finance manager said. There were situations when new members joined the finance team that he didn’t get along with, but couldn’t avoid them. Sam even recalls a time when he found out another group member was spreading rumours about him and emailing his boss whenever he was even five minutes late. In the end, Sam left because he didn’t enjoy coming to work any more. But Sam has learned from this. ‘I wasn’t ready to deal with these issues when I first began. But now I’m far more aware of the issues that arise in work groups and how to deal with them.’

section, we describe the five-stage model and an alternative model for temporary groups with deadlines.

The five-stage model As shown in Figure 9.1, the five-stage group-development model characterizes groups as proce­ eding through five distinct stages: forming, storming, norming, performing and adjourning.11 The first stage, the forming stage, is characterized by a great deal of uncertainty about the group’s purpose, structure and leadership. Members ‘test the waters’ to determine what types of behaviours are acceptable. This stage is complete when members have begun to think of themselves as part of a group. The storming stage is one of intragroup conflict. Members accept the existence of the group, but there is resistance to the constraints that the group imposes on individuality. Furthermore, there is conflict over who will control the group. When this stage is complete, there will be a relatively clear hierarchy of leadership within the group. The third stage is one in which close relationships develop and the group demonstrates cohesiveness. There is now a strong sense of group identity and camaraderie. This norming stage is complete when the group structure solidifies and the group has assimilated a common set of expectations of what defines correct member behaviour. The fourth stage is the performing stage. The structure at this point is fully functional and accepted. Group energy has moved from getting to know and understand each other to performing the task at hand. For permanent work groups, performing is the last stage in the group development. However, for temporary committees, teams, task forces and similar groups that have a limited task to

Pre-stage I

Stage I Forming

Stage II Storming

Figure 9.1  Stages of group development

Stage III Norming

Stage IV Performing

Stage V St Adjourning

Stages of group development   245 adjourning stage The final stage in group development for temporary groups, characterized by concern with wrapping up activities rather than task performance.

perform, there is an adjourning stage. In this stage, the group prepares for its disbandment. High task performance is no longer the group’s top priority. Instead, attention is directed towards wrapping up activities. Responses of group members vary in this stage. Some are upbeat, basking in the group’s accomplishments. Others may be depressed over the loss of camaraderie and friendships gained during the work group’s life. Many interpreters of the five-stage model have assumed a group becomes more effective as it progresses through the first four stages. Although this may be generally true, what makes a group effective is actually more complex.12 First, groups proceed through the stages of group development at different rates. Those with a strong sense of purpose and strategy rapidly achieve high performance and improve over time, whereas those with less sense of purpose actually see their performance worsen over time. Similarly, groups that begin with a positive social focus appear to achieve the ‘performing’ stage more rapidly. Nor do groups always proceed clearly from one stage to the next. Storming and performing can occur simultaneously, and groups can even regress to previous stages.

An alternative model for temporary groups with deadlines

(High)

Performance

punctuatedequilibrium model A set of phases that temporary groups go through that involves transitions between inertia and activity.

Temporary groups with deadlines don’t seem to follow the usual five-stage model. Studies indicate that they have their own unique sequencing of actions (or inaction): (1) Their first meeting sets the group’s direction; (2) this first phase of group activity is one of inertia; (3) a transition takes place at the end of this first phase, which occurs exactly when the group has used up half its allotted time; (4) a transition initiates major changes; (5) a second phase of inertia follows the transition; and (6) the group’s last meeting is characterized by markedly accelerated activity.13 This pattern, called the punctuated-equilibrium model, is shown in Figure 9.2. The first meeting sets the group’s direction. A framework of behavioural patterns and assumptions through which the group will approach its project emerges in this first meeting. These lasting patterns can appear as early as the first few seconds of the group’s existence. Once set, the group’s direction becomes ‘written in stone’ and is unlikely to be re-examined throughout the first half of the group’s life. This is a period of inertia – that is, the group tends to stand still or become locked into a fixed course of action. Even if it gains new insights that challenge initial patterns and assumptions, the group is incapable of acting on these new insights in Phase 1. One of the most interesting discoveries made in studies of groups14 was that each group experienced its transition at the same point in its calendar – precisely halfway between its first meeting and its official deadline – despite the fact that some groups spent as little as an hour on their project while others spent six months. It was as if the groups universally experienced a midlife crisis at this point. The midpoint appears to work like an alarm clock, heightening members’ awareness that their time is limited and that they need to ‘get moving’. This transition ends Phase 1 and is characterized by a concentrated burst of changes, dropping of old patterns and adoption of new perspectives. The transition sets a revised direction for Phase 2. Phase 2 is a new equilibrium or period of inertia. In this phase, the group executes plans created during the transition period.

Phase 2 First Meeting

Transition

Phase 1 (Low)

A

Completion

(A+B)/2 Time

Figure 9.2  The punctuated-equilibrium model

B

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The group’s last meeting is characterized by a final burst of activity to finish its work. In summary, the punctuated-equilibrium model characterizes groups as exhibiting long periods of inertia interspersed with brief revolutionary changes triggered primarily by their members’ awareness of time and deadlines. Keep in mind, however, that this model doesn’t apply to all groups. It’s essentially limited to temporary task groups who are working under a time-­ constrained completion deadline.15

Group properties: roles, norms, status, size, cohesiveness and diversity 3  Show how role requirements change in different situations.

Work groups are not unorganized mobs. Work groups have properties that shape the behaviour of members and make it possible to explain and predict a large portion of individual behaviour within the group as well as the performance of the group itself. Some of these properties are roles, norms, status, group size, cohesiveness and diversity.

Group property 1: roles role A set of expected behaviour patterns attributed to someone occupying a given position in a social unit.

Shakespeare said, ‘All the world’s a stage, and all the men and women merely players.’ Using the same metaphor, all group members are actors, each playing a role. By this term, we mean a set of expected behaviour patterns attributed to someone occupying a given position in a social unit. The understanding of role behaviour would be dramatically simplified if each of us chose one role and played it regularly and consistently. Instead, we are required to play a number of diverse roles, both on and off our jobs. As we’ll see, one of the tasks in understanding behaviour is grasping the role that a person is currently playing. For example, David Brosnahan is a plant manager with CF Industries, a large electrical equipment manufacturer in Dublin. He has a number of roles that he fulfils on that job – for instance, CF employee, member of middle management, electrical engineer and primary company spokesperson in the community. Off the job, David Brosnahan finds himself in still more roles: husband, father, Catholic, tennis player, member of the Hornby Country Club and president of his homeowners’ association. Many of these roles are compatible; some create conflicts. For instance, how does his religious involvement influence his managerial decisions regarding layoffs, expense account padding and provision of accurate information to government agencies? A recent offer of promotion requires David to relocate, yet his family very much wants to stay in Dublin. Can the role demands of his job be reconciled with the demands of his husband and father roles? Like David Brosnahan, we are all required to play a number of roles, and our behaviour varies with the role we are playing. Different groups impose different role requirements on individuals.

Role perception role perception An individual’s view of how he or she is supposed to act in a given situation.

Our view of how we’re supposed to act in a given situation is a role perception. Based on an interpretation of how we believe we are supposed to behave, we engage in certain types of behaviour. Where do we get these perceptions? We get them from stimuli all around us – friends, books, television. For example, we may form an impression of the work of doctors from watching a hospital based television drama. Of course, the primary reason apprenticeship programmes exist in many trades and professions is to allow beginners to watch an ‘expert’ so they can learn to act as they are supposed to.

Role expectations role expectations How others believe a person should act in a given situation.

Role expectations are defined as the way others believe you should act in a given situation.

For instance, the role of a judge at the European Court of Justice is viewed as having propriety and dignity, while a football coach is seen as aggressive, dynamic and inspiring to the players.

TDC Photography / Shutterstock

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Bruce Dickinson, best known as the lead vocalist for one of the most successful heavy metal bands in history, Iron Maiden, plays a number of diverse roles. He is a licensed commercial airline pilot, radio presenter, has created his own aircraft maintenance and pilot training company, hosted television documentaries, authored novels and film scripts. Each of these positions imposes different role requirements. psychological contract An unwritten agreement that sets out what management expects from an employee and vice versa.

In the workplace, we look at role expectations through the perspective of the psychological contract – an unwritten agreement that exists between employees and their employer. This psychological contract sets out mutual expectations – what management expects from workers and vice versa.16 For instance, management is expected to treat employees justly, provide acceptable working conditions, clearly communicate what is a fair day’s work and give feedback on how well an employee is doing. Employees are expected to respond by demonstrating a good attitude, following directions and showing loyalty to the organization. What happens if management is derelict in keeping its part of the bargain? We can expect negative effects on employee performance and satisfaction. One study among restaurant managers found that psychological contract violations were related to greater intentions to quit the job, while another study of a variety of different industries found they were associated with lower levels of productivity, higher levels of theft and greater work withdrawal.17 However, there is evidence that perceptions of psychological contracts vary across cultures. In France, where people are individualist and power is more asymmetric, contracts are perceived as self-interested yet favouring the more powerful party. In Canada, where people are individualist but power is more symmetric, contracts are perceived as self-interested yet focused on balanced reciprocity. In China, where people are collectivist and power is more asymmetric, contracts are perceived as going beyond the work context into employees’ lives. And in Norway, where people are collectivist but power is more symmetric, contracts are perceived as more relational and based on trust.18

Role conflict role conflict A situation in which an individual is confronted by divergent role expectations.

When an individual is confronted by divergent role expectations, the result is role conflict. It exists when an individual finds that compliance with one role requirement may make it difficult to comply with another.19 At the extreme, it would include situations in which two or more role expectations are mutually contradictory. Our previous discussion of the many roles David Brosnahan had to deal with included several role conflicts – for instance, David’s attempt to reconcile the expectations placed on him as a husband and father with those placed on him as an executive with CF Industries. The former, as you will remember, emphasizes stability and concern for the desire of his wife and

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children to remain in Dublin. CF, on the other hand, expects its employees to be responsive to the needs and requirements of the company. Although it might be in David’s financial and career interests to accept a relocation, the conflict comes down to choosing between family and career role expectations. Indeed, a great deal of research demonstrates that conflict between work and family roles is one of the most significant sources of stress for most employees.20 Most employees are simultaneously in occupations, work groups, divisions and demographic groups, and these different identities can come into conflict when the expectations of one clash with the expectations of another.21 During mergers and acquisitions, employees can be torn between their identities as members of their original organization and of the new parent company.22 Organizations structured around multinational operations also have been shown to lead to dual identification, with employees distinguishing between the local division and the international organization.23

Zimbardo’s prison experiment One of the most illuminating role experiments was done a number of years ago by Stanford University psychologist Philip Zimbardo and his associates.24 They created a ‘prison’ in the basement of the Stanford psychology building, hired at the equivalent of about €10 a day two dozen emotionally stable, physically healthy, law-abiding students who scored ‘normal average’ on extensive personality tests, randomly assigned them the role of either ‘guard’ or ‘prisoner’, and established some basic rules. It took little time for the ‘prisoners’ to accept the authority positions of the ‘guards’ and for the mock guards to adjust to their new authority roles. Consistent with social identity theory, the guards came to see the prisoners as a negative outgroup, and their comments to researchers showed they had developed stereotypes about the ‘typical’ prisoner personality type. After the guards crushed a rebellion attempt on the second day, the prisoners became increasingly passive. Whatever the guards ‘dished out’, the prisoners took. The prisoners actually began to believe and act inferior and powerless, as the guards constantly reminded them. Every guard, at some time during the simulation, engaged in abusive, authoritative behaviour. One said, ‘I was surprised at myself . . . I made them call each other names and clean the toilets out with their bare hands. I practically considered the prisoners cattle, and I kept thinking: “I have to watch out for them in case they try something.” Surprisingly, during the entire experiment – even after days of abuse – not one prisoner said, “Stop this. I’m a student like you. This is just an experiment!”’ The simulation actually proved too successful in demonstrating how quickly individuals learn new roles. The researchers had to stop it after only six days because of the participants’ pathological reactions. And remember, these were individuals chosen precisely for their normalcy and emotional stability. What can we conclude from this prison simulation? The participants in this experiment had, like the rest of us, learned stereotyped conceptions of guard and prisoner roles from the mass media and their own personal experiences in power and powerlessness relationships gained at home (parent–child), in school (teacher–student), and in other situations. This, then, allowed them easily and rapidly to assume roles that were very different from their inherent personalities. In this case, we saw that people with no prior personality pathology or training in their roles could execute extreme forms of behaviour consistent with the roles they were playing. A follow-up reality television show conducted by the BBC that used a lower-fidelity simulated prison setting provides some insights into these results.25 The BBC results were dramatically different from those of the Stanford experiment. The ‘guards’ were far more careful in their behaviour and limited the aggressive treatment of ‘prisoners’. They often described their concerns about how their actions might be perceived. In short, they did not fully take on their roles, possibly because they knew their behaviour was being observed by millions of viewers. Philip Zimbardo has contended that the BBC study is not a replication of his study for several reasons, but he acknowledges the results demonstrate how both guards and prisoners act differently when closely monitored. These results suggest abuse of roles can be limited when people are made conscious of their behaviour.

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Group property 2: norms Did you ever notice that golfers don’t speak while their partners are putting on the green or that employees usually don’t criticize their bosses in public? Why? The answer is norms. All groups have established norms – that is, acceptable standards of behaviour that are shared by the group’s members. Norms tell members what they ought and ought not to do under certain circumstances. From an individual’s standpoint, they tell what is expected of you in certain situations. When agreed to and accepted by the group, norms act as a means of influencing the behaviour of group members with a minimum of external controls. Different groups, communities and societies have different norms, but they all have them.26 Norms can cover virtually any aspect of group behaviour.27 Probably the most common group norm is a performance norm. Work groups typically provide their members with explicit cues to how hard they should work, how to get the job done, what their level of output should be, what level of punctuality is appropriate, and the like. These norms are extremely powerful in affecting an individual employee’s performance – they are capable of significantly modifying a performance prediction that was based solely on the employee’s ability and level of personal motivation. Although arguably the most important, performance norms aren’t the only kind. Other types include appearance norms (for example, dress codes, unspoken rules about when to look busy), social arrangement norms (for example, with whom group members eat lunch, whether to form friendships on and off the job), and resource allocation norms (for example, assignment of difficult jobs, distribution of resources like pay or equipment).

4  Demonstrate how norms and status exert influence on an individual’s behaviour. norms Acceptable standards of behaviour within a group that are shared by the group’s members.

The Hawthorne studies

Courtesy of AT&T Archives and History Center

Full-scale appreciation of the influence of norms on worker behaviour did not occur until the early 1930s, following studies undertaken between 1924 and 1932 at the Western Electric Company’s Hawthorne Works in Chicago.28 The Hawthorne researchers began by examining the relationship between the physical environment and productivity. As they increased the light level for the experimental group of workers, output rose for that unit and the control group. But to their surprise, as they dropped

From the Hawthorne studies, observers gained valuable insights into how individual behaviour is influenced by group norms. The group of workers determined the level of fair output and established norms for individual work rates that conformed to the output. To enforce the group norms, workers used sarcasm, ridicule and even physical force to influence individual behaviours that were not acceptable to the group.

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the light level in the experimental group, productivity continued to increase in both groups. In fact, productivity in the experimental group decreased only when the light intensity had been reduced to that of moonlight. As a follow-up, the researchers began a second set of experiments at Western Electric. A small group of women assembling telephone relays was isolated from the main work group so their behaviour could be more carefully observed. Observations covering a multi-year period found this small group’s output increased steadily. The number of personal and out-sick absences was approximately one-third that recorded by women in the regular production department. It became evident this group’s performance was significantly influenced by its status as ‘special’. The members thought being in the experimental group was fun, that they were in an elite group, and that management showed concern about their interests by engaging in such experimentation. In essence, workers in both the illumination and assembly test-room experiments were really reacting to the increased attention they received. A third study, in the bank wiring observation room, was introduced to study the effect of a sophisticated wage incentive plan. The most important finding was that employees did not individually maximize their output. Rather, their output became controlled by a group norm that determined a proper day’s work. Interviews determined the group was operating well below its capability and levelling output to protect itself. Members were afraid that if they significantly increased their output, the unit incentive rate would be cut, the expected daily output would be increased, layoffs might occur, or slower workers would be reprimanded. So the group established its idea of a fair output – neither too much nor too little. Members helped each other ensure their reports were nearly level. The norms the group established included a number of ‘don’ts’. Don’t be a rate-buster, turning out too much work. Don’t be a chiseler, turning out too little work. Don’t squeal on any of your peers. How did the group enforce these norms? The methods included sarcasm, name-calling, ridicule and even punches to the upper arm of any member who violated the group’s norms. Members also ostracized individuals whose behaviour was against the group’s interest.

Conformity

conformity The adjustment of one’s behaviour to align with the norms of the group.

As a member of a group, you desire acceptance by the group. Because of your desire for acceptance, you are susceptible to conforming to the group’s norms. There is considerable evidence that groups can place strong pressures on individual members to change their attitudes and behaviours to conform to the group’s standard.29 The impact that group pressures for conformity can have on an individual member’s judgement and attitudes was demonstrated in the now-classic studies by Solomon Asch.30 Asch made up groups of seven or eight people, who sat around a table and were asked to compare two cards held by the experimenter. One card had one line, and the other had three lines of varying length. As shown in Figure 9.3, one of the lines on the three-line card was identical to the line on the one-line card. Also as shown in Figure 9.3, the difference in line length was quite obvious; in fact, under ordinary conditions, subjects made fewer than 1 per cent errors. The object was to announce aloud which of the three lines matched the single line. But what happens if the members in the group begin to give incorrect answers? Will the pressures to conform result in an unsuspecting subject (USS) altering an answer to align with the others? That was what Asch wanted to know. So he arranged the group so that only the USS was unaware that the experiment was ‘fixed’. The seating was prearranged: the USS was placed so as to be one of the last to announce a decision. The experiment began with several sets of matching exercises. All the subjects gave the right answers. On the third set, however, the first subject gave an obviously wrong answer – for example, saying ‘C’ in Figure 9.3. The next subject gave the same wrong answer, and so did the others until it got to the unknowing subject. He knew ‘B’ was the same as ‘X’, yet everyone else had said ‘C’. The decision confronting the USS was this: do you publicly state a perception that differs from the preannounced position of the others in your group? Or

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do you give an answer that you strongly believe is incorrect in order to have your response agree with that of the other group members? The results obtained by Asch demonstrated that over many experiments and many trials, 75 per cent of the subjects gave at least one answer that conformed – that is, that they knew X A B C was wrong but that was consistent with the replies of other group members – and the average for conformers was 37 per cent. What meaning can we draw from these results? They Figure 9.3  Examples of cards used in Asch’s study suggest that there are group norms that press us towards conformity. That is, we desire to be one of the group and avoid being visibly different. The preceding conclusions are based on research that was conducted more than 50 years ago. Has time altered their validity? And should we consider these findings generalizable across cultures? Evidence indicates levels of conformity have steadily declined since Asch’s studies in the early 1950s, and his findings are culture-bound.31 Conformity to social norms is higher in collectivist cultures, but it is still a powerful force in groups in individualist countries. Do individuals conform to the pressures of all groups to which they belong? Obviously not, because people belong to many groups, and their norms vary and sometimes are contradictory. People conform to the important groups to which they belong or hope reference groups to belong. These important groups are reference groups, in which a person is aware of other Important groups members, defines himself or herself as a member or would like to be a member, and feels group to which individuals members are significant to him or her. The implication, then, is that all groups do not impose belong or hope to equal conformity pressures on their members. belong and with whose norms individuals are likely to conform.

Deviant workplace behaviour

deviant workplace behaviour Voluntary behaviour that violates significant organizational norms and, in so doing, threatens the well-being of the organization or its members. Also called antisocial behaviour or workplace incivility.

Alexander Andresen is frustrated by a co-worker who constantly spreads malicious and unsubstantiated rumours about him. Debra Hundley is tired of a member of her work team who, when confronted with a problem, takes out his frustration by yelling and screaming at her and other work team members. And Alice Dubois recently quit her job as a dental hygienist after being constantly sexually harassed by her employer. What do these three episodes have in common? They represent employees being exposed to acts of deviant workplace behaviour.32 Deviant workplace behaviour (also called antisocial behaviour or workplace incivility) is voluntary behaviour that violates significant organizational norms and, in doing so, threatens the well-being of the organization or its members. Table 9.1 provides a typology of deviant workplace behaviours, with examples of each. Table 9.1  Typology of deviant workplace behaviour Category

Examples

Production

Leaving early Intentionally working slowly Wasting resources

Property

Sabotage Lying about hours worked Stealing from the organization

Political

Showing favouritism Gossiping and spreading rumours Blaming co-workers

Personal aggression

Sexual harassment Verbal abuse Stealing from co-workers

Source: Adapted from S. L. Robinson and R. J. Bennett, ‘A typology of deviant workplace behaviours: a multidimensional scaling study’, Academy of Management Journal, April 1995, p. 565.

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Few organizations will admit to creating or condoning conditions that encourage and maintain deviant norms. Yet they exist. Employees report, for example, an increase in rudeness and disregard towards others by bosses and co-workers in recent years. And nearly half of employees who have suffered this incivility report that it has led them to think about changing jobs, with 12 per cent actually quitting because of it.33 A study of nearly 1,500 respondents found that in addition to increasing turnover intentions, incivility at work increased reports of psychological stress and physical illness.34 Recent research also suggests that lack of sleep, which hinders a person’s ability to regulate emotions and behaviours, can lead to deviant behaviour. As organizations have tried to do more with less, pushing their employees to work extra hours, they may indirectly be facilitating deviant behaviour.35 Like norms in general, individual employees’ antisocial actions are shaped by the group context within which they work. Evidence demonstrates deviant workplace behaviour is likely to flourish where it’s supported by group norms.36 Workers who socialize either at or outside work with people who are frequently absent from work are more likely to be absent themselves.37 What this means for managers is that when deviant workplace norms surface, employee cooperation, commitment and motivation are likely to suffer. What are the consequences of workplace deviance for teams? Some research suggests a chain reaction occurs in a group with high levels of dysfunctional behaviour.38 The process begins with negative behaviours like shirking, undermining co-workers or being generally uncooperative. As a result of these behaviours, the team collectively starts to have negative moods. These negative moods then result in poor coordination of effort and lower levels of group performance, especially when there is a lot of nonverbal negative communication between members.

Group property 3: status Status – that is, a socially defined position or rank given to groups or group members by others – permeates every society. Even the smallest group will develop roles, rights and rituals to differentiate its members. Status is an important factor in understanding human behaviour because it is a significant motivator and has major behavioural consequences when individuals perceive a disparity between what they believe their status to be and what others perceive it to be.

What determines status? status characteristics theory A theory which states that differences in status characteristics create status hierarchies within groups.

According to status characteristics theory, status tends to be derived from one of three sources:39 1. The power a person wields over others. Because they likely control the group’s resources,

people who control the outcomes of a group through their power tend to be perceived as high status. 2. A person’s ability to contribute to a group’s goals. People whose contributions are critical

to the group’s success tend to have high status. 3. An individual’s personal characteristics. Someone whose personal characteristics are posi-

tively valued by the group (for example, good looks, intelligence, money or a friendly personality) typically has higher status than someone who has fewer valued attributes.

Status and norms Status has been shown to have some interesting effects on the power of norms and pressures to conform. For instance, high-status members of groups are often given more freedom to deviate from norms than are other group members.40 High-status people are also better able to resist conformity pressures than their lower-status peers. An individual who is highly valued by a group but who doesn’t need or care very much about the social rewards the group provides is particularly able to pay minimal attention to conformity norms.41 These findings explain why many star athletes, celebrities, top-performing sales-people and outstanding academics seem oblivious to appearance or social norms that constrain their peers. As high-status individuals, they’re given a wider range of discretion. But this is true only as long as the high-status

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person’s activities aren’t severely detrimental to group goal achievement.42 Overall, research indicates that bringing high-status members into a group may improve performance, but only up to a point, perhaps because they may introduce counterproductive norms.43

Status and group interaction Interaction among members of groups is influenced by status. We find, for instance, that highstatus people tend to be more assertive.44 They speak out more often, criticize more, state more commands and interrupt others more often. But status differences actually inhibit diversity of ideas and creativity in groups because lower-status members tend to be less active participants in group discussions. In situations in which lower-status members possess expertise and insights that could aid the group, their expertise and insights are not likely to be fully utilized, thus reducing the group’s overall performance.

Status inequity It is important for group members to believe the status hierarchy is equitable. Perceived inequity creates disequilibrium, which inspires various types of corrective behaviour. Hierarchical groups can lead to resentment among those at the lower end of the status continuum. Large differences in status within groups are also associated with poorer individual performance, lower health and higher intentions to leave the group.45 Groups generally agree within themselves on status criteria; hence, there is usually high concurrence in group rankings of individuals. Managers who occupy central positions in their social networks are typically seen as higher in status by their subordinates, and this position translates into greater influence over the group’s functioning.46 Groups generally form an informal status order based on ranking and who has access to needed resources.47 Individuals can find themselves in conflicts when they move between groups whose status criteria are different, or when they join groups whose members have heterogeneous backgrounds. Business executives may use personal income or the growth rate of their companies as determinants of status. Government bureaucrats may use the size of their budgets, and blue-collar workers may use their years of seniority. Cultures also differ in their criteria for conferring status upon individuals. When groups are heterogeneous or when heterogeneous groups must be interdependent, status differences may initiate conflict as the group attempts to reconcile the differing hierarchies. This can be a problem when management creates teams of employees from varied functions (as we’ll see in Chapter 10).

Status and stigmatization Although it’s clear that your own status affects the way people perceive you, the status of people with whom you are affiliated can also affect others’ views of you. Studies have shown that people who are stigmatized against can ‘infect’ others with their stigma. This ‘stigma by association’ effect can result in negative opinions and evaluations of the person affiliated with the stigmatized individual, even if the association is brief and purely coincidental. While affiliating with a stigmatized individual can damage a person’s reputation, the opposite is true when it comes to affiliating with a high-status person. It’s not the actual relationship that matters; all that’s important for the target person to garner a more favourable reputation is for people to perceive a relationship with the high-status person exists.48

Group property 4: size Does the size of a group affect the group’s overall behaviour? The answer to this question is a definite ‘yes’, but the effect is contingent on what dependent variables you look at.49 The evidence indicates, for instance, that smaller groups are faster at completing tasks than are larger ones and that individuals perform better in smaller groups than in larger ones.50 However, for groups engaged in problem solving, large groups consistently get better marks than their smaller counterparts.51 Translating these results into specific numbers is a bit more hazardous, but we can offer some parameters. Large groups – those with a dozen or more

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5  Show how group size affects group performance. social loafing The tendency for individuals to expend less effort when working collectively than when working individually.

cohesiveness The degree to which group members are attracted to each other and are motivated to stay in the group.

members – are good for gaining diverse input. So if the goal of the group is fact-finding, larger groups should be more effective. On the other hand, smaller groups are better at doing something productive with that input. Groups of approximately seven members tend to be more effective for taking action. One of the most important findings related to the size of a group has been labelled social loafing. Social loafing is the tendency for individuals to expend less effort when working collectively than when working individually.52 It directly challenges the logic that the productivity of the group as a whole should at least equal the sum of the productivity of the individuals in that group. A common stereotype about groups is that the sense of team spirit spurs individual effort and enhances the group’s overall productivity. But that stereotype may be wrong. In the late 1920s, a German psychologist named Max Ringelmann compared the results of individual and group performance on a rope-pulling task.53 He expected that the group’s effort would be equal to the sum of the efforts of individuals within the group. That is, three people pulling together should exert three times as much pull on the rope as one person, and eight people should exert eight times as much pull. Ringelmann’s results, however, didn’t confirm his expectations. One person pulling on a rope alone exerted an average of 63 kilograms of force. In groups of three, the per-person force dropped to 53 kilograms. And in groups of eight, it fell to only 31 kilograms per person. Replications of Ringelmann’s research with similar tasks have generally supported his findings.54 Total group performance increases with group size, but the addition of new members to the group has diminishing returns on individual productivity. So more may be better in the sense that the total productivity of a group of four is greater than that of three people, but the individual productivity of each group member declines. What causes this social loafing effect? It may be due to a belief that others in the group are not carrying their fair share. If you see others as lazy or inept, you can re-establish equity by reducing your effort. But simply failing to contribute may not be enough to be labelled a ‘free rider’. Instead, the group must believe the social loafer is acting in an exploitive manner (benefiting at the expense of other team members).55 Another explanation is the dispersion of responsibility. Because the results of the group cannot be attributed to any single person, the relationship between an individual’s input and the group’s output is clouded. In such situations, individuals may be tempted to become ‘free riders’ and coast on the group’s efforts. The implications for OB of this effect on work groups are significant. When managers use collective work situations to enhance morale and teamwork, they must also provide means by which they can identify individual efforts. If this isn’t done, management must weigh the potential losses in productivity from using groups against any possible gains in worker satisfaction.56 Social loafing appears to have a Western bias. It’s consistent with individualist cultures that are dominated by self-interest. It is not consistent with collectivist societies, in which individuals are motivated by in-group goals. In studies comparing US employees with employees from the People’s Republic of China and Israel (both collectivist societies), the Chinese and Israelis showed no propensity to engage in social loafing and actually performed better in a group than alone. Recent research indicates that the stronger an individual’s work ethic is, the less likely that person is to engage in social loafing.57 There are also several ways to prevent social loafing: (1) set group goals, so the group has a common purpose to strive towards; (2) increase intergroup competition, which focuses on the shared outcome; (3) engage in peer evaluation, so each person evaluates each other person’s contribution; (4) select members who have high motivation and prefer to work in groups; and (5) if possible, base group rewards in part on each member’s unique contributions.58 Although no magic wand will prevent social loafing in all cases, these steps should help minimize its effect.

Group property 5: cohesiveness Groups differ in their cohesiveness – that is, the degree to which members are attracted to each other and are motivated to stay in the group.59 For instance, some work groups are cohesive

Group properties: roles, norms, status, size, cohesiveness and diversity   255 Cohesiveness

Performance norms

because the members have spent a great deal of time together, or the group’s small size facilitates high interaction, or the group has experienced external threats that have brought members close together. High Moderate High Cohesiveness is important because it has been found to be related to productivity productivity group productivity.60 Studies consistently show that the relationship between cohesiveLow Moderate to ness and productivity depends on the performance-related norms Low w productivity low productivity established by the group.61 If performance-related norms are high (for example, high output, quality work, cooperation with indiFigure 9.4  Relationship between group viduals outside the group), a cohesive group will be more produccohesiveness, performance norms and productivity tive than will a less cohesive group. But if cohesiveness is high and performance norms are low, productivity will be low. If cohesiveness is low and performance norms are high, productivity increases but it increases less than in the 6  Contrast the high-cohesiveness/high-norms situation. When cohesiveness and performance-related norms benefits and are both low, productivity tends to fall into the low-to-moderate range. These conclusions are disadvantages of summarized in Figure 9.4. cohesive groups. What can you do to encourage group cohesiveness? You might try one or more of the following suggestions: (1) Make the group smaller, (2) encourage agreement with group goals, (3) increase the time members spend together, (4) increase the status of the group and the perceived difficulty of attaining membership in the group, (5) stimulate competition with other groups, (6) give rewards to the group rather than to individual members, and (7) physically 7  Explain the isolate the group.62 implications of High

diversity for group effectiveness. diversity The extent to which members of a group are similar to, or different from, one another.

Low

Group property 6: diversity The final property of groups we consider is diversity in the group’s membership, or the degree to which members of the group are similar to, or different from, one another. A great deal of research is being done on how diversity influences group performance. Some research looks at cultural diversity and some at racial, gender and other differences. Overall, studies identify both costs and benefits from group diversity.

Making global virtual teams effective Having a group whose members live and work in different countries once seemed impossible, but today virtual teams have become relatively common. In some cases, the group members never meet face-to-face, instead conducting all their work over email, phone calls and videoconferencing tools such as Skype. Although global virtual teams present challenges, such as ensuring smooth coordination, establishing trust and overcoming cultural differences in communication, they also present opportunities. Many companies utilize them to make sure the most qualified individuals are assigned to top projects. Besides providing advanced technology to facilitate communication, organizations can do a number of things to make it more likely that global virtual teams succeed. These include ensuring sufficient time for preparation activities such as setting goals, formulating group strategy and conducting ongoing analyses of the group’s mission. This preparation, along with making tasks interdependent to create the need

glOBal for collaborative interaction, ensures that everyone in the group has the same understanding of who knows what and who does what. If you find yourself on a global virtual team, be aware that individuals from different cultures arrive at decisions differently. For example, while US managers prefer to gather input from others and quickly implement a decision, managers from Sweden lean towards consensus building, which although lengthy can lead to greater commitment to the ultimate decision. And in France, debate and conflict are viewed as part of good decision making. Thus, both organizations and employees need to recognize that global virtual teams often require different strategies from traditional teams in order to be effective. Sources: E. Meyer, ‘The four keys to success with virtual teams’, Forbes, 19 August 2010; and M. T. Maynard, J. E. Mathieu, T. L. Rapp and L. L. Gibson, ‘­Something(s) old and something(s) new: modeling drivers of global virtual team e­ ffectiveness’, Journal of Organizational Behavior, 33 (2012), pp. 342–65.

256  9 Foundations of group behaviour

Diversity appears to increase group conflict, especially in the early stages of a group’s tenure, which often lowers group morale and raises dropout rates. One study compared groups that were culturally diverse (composed of people from different countries) and homogeneous (composed of people from the same country). On a wilderness survival exercise (not unlike the Experiential Exercise at the end of this chapter), the groups performed equally well, but the members from the diverse groups were less satisfied with their groups, were less cohesive, and had more conflict.63 Another study examined the effect of differences in tenure on the performance of 67 engineering research and development groups.64 When most people had roughly the same level of tenure, performance was high, but as tenure diversity increased, performance dropped off. There was an important qualifier: higher levels of tenure diversity were not related to lower performance for groups when there were effective team-oriented human resources practices. Teams in which members’ values or opinions differ tend to experience more conflict, but leaders who can get the group to focus on the task at hand and encourage group learning are able to reduce these conflicts and enhance discussion of group issues.65 It seems diversity can be bad for performance even in creative teams, but appropriate organizational support and leadership might offset the problems. Culturally and demographically diverse groups may perform better over time – if they can get over their initial conflicts. Why might this be so? Surface-level diversity – in observable characteristics such as national origin, race and gender – alerts people to possible deep-level diversity in underlying attitudes, values and opinions. One researcher argues, ‘The mere presence of diversity you can see, such as a person’s race or gender, actually cues a team that there’s likely to be differences of opinion.’66 Although those differences can lead to conflict, they also provide an opportunity to solve problems in unique ways. One study of jury behaviour found diverse juries more likely to deliberate longer, share more information and make fewer factual errors when discussing evidence. Two studies of MBA student groups found surface-level diversity led to greater openness even without deep-level diversity. Here, surface-level diversity may subconsciously cue team members to be more open-minded in their views.67 The impact of diversity on groups is mixed. It is difficult to be in a diverse group in the short term. However, if members can weather their differences, over time diversity may help them be more open-minded and creative and to do better. But even positive effects are unlikely to be especially strong. As one review stated, ‘The business case (in terms of demonstrable financial results) for diversity remains hard to support based on the extant research.’68

Faultlines faultlines The perceived divisions that split groups into two or more subgroups based on individual differences such as sex, race, age, work experience and education.

One possible side effect in diverse teams – especially those that are diverse in terms of surface level characteristics – is faultlines, or perceived divisions that split groups into two or more subgroups based on individual differences such as sex, race, age, work experience and education. For example, let’s say group A is composed of three men and three women. The three men have approximately the same amount of work experience and backgrounds in marketing. The three women also have about the same amount of work experience and backgrounds in finance. Group B has three men and three women, but they all differ in terms of their experience and backgrounds. Two of the men are relatively experienced, while the other is new. One of the women has worked at the company for several years, while the other two are new. In addition, two of the men and one woman in group B have backgrounds in marketing, while the other men and the remaining two women have backgrounds in finance. It is thus likely that a faultline will result in subgroups of males and females in group A but not in group B. Research on faultlines has shown that splits are generally detrimental to group functioning and performance. Subgroups may wind up competing with each other, which takes time away from core tasks and harms group performance. Groups that have subgroups learn more slowly, make more risky decisions, are less creative, and experience higher levels of conflict. Subgroups are less likely to trust each other.

Group decision making   257

Finally, although the overall group’s satisfaction is lower when faultlines are present, satisfaction with subgroups is generally high.69 Are faultlines ever a good thing? One study suggested that faultlines based on differences in skill, knowledge and expertise could be beneficial when the groups were in organizational cultures that strongly emphasized results. Why? A results-driven culture focuses people’s attention on what’s important to the company rather than on problems arising from subgroups.70 Another study showed that problems stemming from strong faultlines based on gender and educational major were counteracted when their roles were cross-cut and the group as a whole was given a common goal to strive for. Together, these strategies force collaboration between members of subgroups and focus their efforts on accomplishing a goal that transcends the boundary imposed by the faultline.71 Overall, although research on faultlines suggests that diversity in groups is a potential double-edged sword, recent work indicates they can be strategically employed to improve performance.

Group decision making 8  Contrast the strengths and weaknesses of group decision making.

The belief – characterized by juries – that two heads are better than one has long been accepted as a basic component of many countries’ legal systems. This belief has expanded to the point that, today, many decisions in organizations are made by groups, teams or committees.72

Groups versus the individual Decision-making groups may be widely used in organizations, but does that imply that group decisions are preferable to those made by an individual alone? The answer to this question depends on a number of factors. Let’s begin by looking at the strengths and weaknesses of group decision making.73

Strengths of group decision making Groups generate more complete information and knowledge. By aggregating the resources of several individuals, groups bring more input into the decision process. In addition to more input, groups can bring heterogeneity to the decision process. They offer increased diversity of views. This opens up the opportunity for more approaches and alternatives to be considered. Finally, groups lead to increased acceptance of a solution. Many decisions fail after the final choice is made because people don’t accept the solution. Group members who participated in making a decision are likely to enthusiastically support the decision and encourage others to accept it.

Weaknesses of group decision making In spite of the pluses noted, group decisions have their drawbacks. They’re time-consuming because groups typically take more time to reach a solution than would be the case if an individual were making the decision. There are conformity pressures in groups. The desire by group members to be accepted and considered an asset to the group can result in squashing any overt disagreement. Group discussion can be dominated by one or a few members. If this dominant coalition is composed of low and medium ability members, the group’s overall effectiveness will suffer. Finally, group decisions suffer from ambiguous responsibility. In an individual decision, it’s clear who is accountable for the final outcome. In a group decision, the responsibility of any single member is diluted.

Effectiveness and efficiency Whether groups are more effective than individuals depends on the criteria you use to define effectiveness. In terms of accuracy, group decisions are generally more accurate than the decisions of the average individual in a group, but they are less accurate than the judgements of the most accurate group member.74 If decision effectiveness is defined in terms of speed,

258  9 Foundations of group behaviour

individuals are superior. If creativity is important, groups tend to be more effective than ­individuals. And if effectiveness means the degree of acceptance the final solution achieves, the nod again goes to the group.75 But effectiveness cannot be considered without also assessing efficiency. In terms of efficiency, groups almost always stack up as a poor second to the individual decision maker. With few exceptions, group decision making consumes more work hours than if an individual were to tackle the same problem alone. The exceptions tend to be the instances in which, to achieve comparable quantities of diverse input, the single decision maker must spend a great deal of time reviewing files and talking to people. Because groups can include members from diverse areas, the time spent searching for information can be reduced. However, as we noted, these advantages in efficiency tend to be the exception. Groups are generally less efficient than individuals. In deciding whether to use groups, then, consideration should be given to assessing whether increases in effectiveness are more than enough to offset the reductions in efficiency.

Summary

groupthink A phenomenon in which the norm for consensus overrides the realistic appraisal of alternative courses of action. groupshift A change between a group’s decision and an individual decision that a member within the group would make; the shift can be towards either conservatism or greater risk but it generally is towards a more extreme version of the group’s original position.

In summary, groups offer an excellent vehicle for performing many of the steps in the ­decision-making process. They are a source of both breadth and depth of input for information gathering. If the group is composed of individuals with diverse backgrounds, the alternatives generated should be more extensive and the analysis more critical. When the final solution is agreed on, there are more people in a group decision to support and implement it. These pluses, however, can be more than offset by the time consumed by group decisions, the internal conflicts they create, and the pressures they generate towards conformity. Therefore, in some cases, individuals can be expected to make better decisions than groups.

Groupthink and groupshift Two by-products of group decision making have received a considerable amount of attention from researchers in OB. As we’ll show, these two phenomena have the potential to affect a group’s ability to appraise alternatives objectively and to arrive at quality decision solutions. The first phenomenon, called groupthink, is related to norms. It describes situations in which group pressures for conformity deter the group from critically appraising unusual, minority or unpopular views. Groupthink is a disease that attacks many groups and can dramatically hinder their performance. The second phenomenon is groupshift. It indicates that in discussing a given set of alternatives and arriving at a solution, group members tend to exaggerate the initial positions they hold. In some situations, caution dominates and there is a conservative shift. More often, however, the evidence indicates that groups tend towards a risky shift. Let’s look at each of these phenomena in more detail.

‘Are two heads better than one?’ Two heads are not necessarily always better than one. In fact, the evidence generally confirms the superiority of individuals over groups when brainstorming. The best individual in a group also makes better decisions than groups as a whole, though groups do tend to do better than the average group member.76 Research also indicates that groups are superior only when they meet certain criteria.77 These criteria include: 1. The group must have diversity among members. To get benefits from ‘two heads’, the heads must differ in relevant skills and abilities.

MYTH OR SCIENCE? 2. The group members must be able to communicate their ideas freely and openly. This requires an absence of hostility and intimidation. 3. The task being undertaken must be complex. Relative to individuals, groups do better on complex rather than simple tasks.

Bob Pearson/AFP/Getty Images

Group decision making   259

The term ‘groupthink’ was coined by Prof. Irving Janis in the early 1970’s. When the space shuttle Challenger disaster occurred in 1986, Janis believed a contributing factor was groupthink. The official inquiry into the disaster found that the direct cause was the malfunction of an O-ring seal on the rocket booster that caused the shuttle to explode 73 seconds after launching. But Janis believed that the decision to launch should not have been made because worries about the O-rings had been circulating for months and were expressed to NASA. However, groupthink meant that a realistic appraisal of the alternatives was not made because of the cohesive group dynamics at NASA.

Groupthink Have you ever felt like speaking up in a meeting, a classroom or an informal group but decided against it? One reason may have been shyness. On the other hand, you may have been a victim of groupthink, a phenomenon that occurs when group members become so enamoured of seeking concurrence that the norm for consensus overrides the realistic appraisal of alternative courses of action and the full expression of deviant, minority or unpopular views. It describes a deterioration in an individual’s mental efficiency, reality testing and moral judgement as a result of group pressures.78 We have all seen the symptoms of the groupthink phenomenon: 1. Group members rationalize any resistance to the assumptions they have made. No matter

how strongly the evidence may contradict their basic assumptions, members behave so as to reinforce those assumptions continually. 2. Members apply direct pressures on those who momentarily express doubts about any of the

group’s shared views or who question the validity of arguments supporting the alternative favoured by the majority. 3. Members who have doubts or hold differing points of view seek to avoid deviating from

what appears to be group consensus by keeping silent about misgivings and even minimizing to themselves the importance of their doubts. 4. There appears to be an illusion of unanimity. If someone doesn’t speak, it’s assumed that

they are in full accord. In other words, abstention becomes viewed as a ‘yes’ vote.79 The Challenger and Columbia space shuttle disasters and the failure of the main mirror on the Hubble telescope have been linked to decision processes at NASA in which groupthink symptoms were evident.80 And groupthink was found to be a primary factor leading to setbacks at both British Airways and retailer Marks & Spencer as they tried to implement early globalization strategies.81

260  9 Foundations of group behaviour

Groupthink for an Enron jury? Although Enron has gone down in history as the very symbol of corporate corruption, not every Enron employee behaved unethically. Twenty former Enron employees – most notably Ken Lay, Jeff Skilling and Andrew Fastow – were either convicted of or pleaded guilty to fraudulent behaviour. The conviction of another Enron executive you’ve probably never heard of – former broadband finance chief Kevin Howard – provides a fascinating, and disturbing, glimpse into how juries use group pressure to reach decisions. Howard’s first trial ended in a hung jury. In the second trial, he was found guilty of conspiracy, fraud and falsifying records. However, shortly after his conviction, two jurors and two alternate jurors said they were pressured by other jurors to reach a unanimous decision even though they believed Howard was innocent. Juror Ann Marie Campbell said, in a

OB IN THE NEWS sworn statement, ‘There was just so much pressure to change my vote that I felt like we had to compromise and give in to the majority because I felt like there was no other choice.’ Campbell said at one point a male juror tried to ‘grab her by the shoulders’ to convince her, and another ‘banged his fist on the table during deliberations’. Another jury member said, ‘There was an atmosphere of “let’s fry them”.’ On appeal, a judge threw out Howard’s conviction, based, in part, on the earlier judge’s instruction to the convicting jury which pressured them to reach a unanimous decision. The Kevin Howard case shows how strong groupthink pressures can be and the degree to which individuals can be pressured to give in to the majority. Source: K. Hays, ‘Judge dismisses Enron convictions’, Houston (Texas) Chronicle, 1 February 2007.

Groupthink appears to be closely aligned with the conclusions Asch drew in his experiments with a lone dissenter. Individuals who hold a position that is different from that of the dominant majority are under pressure to suppress, withhold or modify their true feelings and beliefs. As members of a group, we find it more pleasant to be in agreement – to be a positive part of the group – than to be a disruptive force, even if disruption is necessary to improve the effectiveness of the group’s decisions. Groups that are more focused on performance than on learning are especially likely to fall victim to groupthink and to suppress the opinions of those who do not agree with the majority.82 Does groupthink attack all groups? No. It seems to occur most often when there is a clear group identity, when members hold a positive image of their group that they want to protect, and when the group perceives a collective threat to this positive image.83 So groupthink is not a dissenter-suppression mechanism as much as it’s a means for a group to protect its positive image. For NASA, its problems stemmed from its attempt to confirm its identity as ‘the elite organization that could do no wrong’.84 One study showed that those influenced by groupthink were more confident about their course of action early on.85 Groups that believe too strongly in the correctness of their course of action are more likely to suppress dissent and encourage conformity than are groups that are more sceptical about their course of action. What can managers do to minimize groupthink?86 First, they can monitor group size. People grow more intimidated and hesitant as group size increases and, although there is no magic number that will eliminate groupthink, individuals are likely to feel less personal responsibility when groups get larger than about 10 members. Managers should also encourage group leaders to play an impartial role. Leaders should actively seek input from all members and avoid expressing their own opinions, especially in the early stages of deliberation. In addition, managers should appoint one group member to play the role of devil’s advocate; this member’s role is to overtly challenge the majority position and offer divergent perspectives. Still another suggestion is to use exercises that stimulate active discussion of diverse alternatives without threatening the group and intensifying identity protection. One such exercise is to have group members talk about dangers or risks involved in a decision and delaying discussion of any potential gains. Requiring members to first focus on the negatives of a decision alternative makes the group less likely to stifle dissenting views and more likely to gain an objective evaluation.

Groupshift or group polarization There are differences between group decisions and the individual decisions of group members.87 What appears to happen in groups is that the discussion leads members towards

Group decision making   261

9  Compare the effectiveness of interacting, brainstorming and the nominal group technique.

a more extreme view of the position they already held. Conservatives become more cautious, and more aggressive types take on more risk. The group discussion tends to exaggerate the initial position of the group. We can view group polarization as a special case of groupthink. The group’s decision reflects the dominant decision-making norm that develops during discussion. Whether the shift in the group’s decision is towards greater caution or more risk depends on the dominant pre-discussion norm. The shift towards polarization has generated several explanations.88 It’s been argued, for instance, that discussion makes the members more comfortable with each other and, thus, more willing to express extreme versions of their original positions. Another argument is that the group diffuses responsibility. Group decisions free any single member from accountability for the group’s final choice, so a more extreme position can be taken. It’s also likely that people take on extreme positions because they want to demonstrate how different they are from the outgroup.89 People on the fringes of political or social movements take on ever-more extreme positions just to prove they are really committed to the cause, whereas those who are more cautious tend to take moderate positions to demonstrate how reasonable they are. So how should you use the findings on groupshift? Recognize that group decisions exaggerate the initial position of the individual members, that the shift has been shown more often to be towards greater risk, and that which way a group will shift is a function of the members’ pre-discussion inclinations. We now turn to the techniques by which groups make decisions. These reduce some of the dysfunctional aspects of group decision making.

Group decision-making techniques interacting groups Typical groups in which members interact with each other face-to-face.

brainstorming An idea-generation process that specifically encourages any and all alternatives while withholding any criticism of those alternatives.

The most common form of group decision making takes place in interacting groups. In these groups, members meet face-to-face and rely on both verbal and nonverbal interaction to communicate with each other. But as our discussion of groupthink demonstrated, interacting groups often censor themselves and pressure individual members towards conformity of opinion. Brainstorming and the nominal group technique have been proposed as ways to reduce many of the problems inherent in the traditional interacting group. Brainstorming is meant to overcome pressures for conformity in an interacting group that dampen creativity.90 It does this by utilizing an idea-generation process that specifically encourages any and all alternatives while withholding any criticism of those alternatives. In a typical brainstorming session, 5 to 10 people sit around a table. The group leader states the problem in a clear manner so that it is understood by all participants. Members then ‘freewheel’ as many alternatives as they can in a given length of time. No criticism is allowed, and all the alternatives are recorded for later discussion and analysis. One idea stimulates others,

Group working ●

‘Groupthink’ in the boardrooms of banks has been widely cited as contributing to the recent financial disasters.

●

Surveys of students reveal that students’ biggest complaint regarding group projects is having to deal with social loafers.

●

One study comparing individuals working on tasks alone to those in groups found that no individual working alone lied, but 22 per cent of those working in groups did. Individuals working in groups were also more likely to cheat

FACE THE FACTS (55 per cent of those in groups cheated compared to 23 per cent working alone) and steal (29 per cent compared with 10 per cent). Source: See M. Skapinker, ‘Diversity fails to end boardroom “groupthink”’, ­Financial Times, 26 May 2009, p. 13; C. Dommeyer, ‘Using the diary method to deal with social loafers on the group project: its effects on peer evaluations, group behavior, and attitudes’, Journal of Marketing Education, 29, 2 (2007), pp. 175–86; A. Erez, H. Elms and E. Fong, ‘Lying, cheating, stealing: it happens more in groups’, paper presented at the European Business Ethics Network Annual Conference, Budapest, Hungary, 30 August 2003.

262  9 Foundations of group behaviour

and judgements of even the most bizarre suggestions are withheld until later to encourage group members to ‘think the unusual’. Brainstorming may indeed generate ideas – but not in a very efficient manner. Research consistently shows that individuals working alone generate more ideas than a group in a brainstorming session. Why? One of the primary reasons is because of ‘production blocking’. In other words, when people are generating ideas in a group, there are many people talking at once, which blocks the thought process and eventually impedes the sharing of ideas.91 The following technique goes further than brainstorming to help groups arrive at a preferred solution.92 The nominal group technique restricts ­ discussion or interpersonal communication during the d ­ ecisionmaking process, hence the term nominal. Group members are all physically present, as in a traditional committee meeting, but members operate independently. Specifically, a problem is presented and then the group takes the following steps:

Figure 9.5  Group decision making Source: S. Adams, Build a Better Life by Stealing Office Supplies (Kansas City, MO: Andrews & McMeal, 1991), p. 31. Dilbert reprinted with permission of Solo Syndication/Universal Uclick

nominal group technique A group decisionmaking method in which individual members meet face-to-face to pool their judgements in a systematic but independent fashion.

1. Members meet as a group, but before any discussion

takes place, each member independently writes down ideas on the problem.

2. After this silent period, each member presents one idea to the group. Each member takes a turn, presenting a single idea, until all ideas have been presented and recorded. No discussion takes place until all ideas have been recorded. 3. The group discusses the ideas for clarity and evaluates them. 4. Each group member silently and independently rank-orders the ideas. The idea with the

highest aggregate ranking determines the final decision. The chief advantage of the nominal group technique is that it permits a group to meet formally but does not restrict independent thinking, as does an interacting group. Research generally shows that nominal groups outperform brainstorming groups.93 Each of the group decision techniques has its own set of strengths and weaknesses. The choice of one technique over another depends on what criteria you want to emphasize and the cost–benefit trade-off. For instance, as Table 9.2 indicates, an interacting group is good for achieving commitment to a solution, brainstorming develops group cohesiveness and the nominal group technique is an inexpensive means for generating a large number of ideas.

Table 9.2  Evaluating group effectiveness Type of group Effectiveness criteria

Interacting

Brainstorming

Nominal

Number and quality of ideas

Low

Moderate

High

Social pressure

High

Low

Moderate

Money costs

Low

Low

Low

Speed

Moderate

Moderate

Moderate

Task orientation

Low

High

High

Potential for interpersonal conflict

High

Low

Moderate

Commitment to solution

High

Not applicable

Moderate

Development of group cohesiveness

High

High

Moderate

POINT/COUNTERPOINT   263

SUMMARY We can draw several implications from our discussion of groups. First, norms control behaviour by establishing standards of right and wrong. The norms of a given group can help explain members’ behaviours for managers. Second, status inequities create frustration and can adversely influence productivity and willingness to remain with an organization. Third, the impact of size on a group’s performance depends on the type of task. Larger groups are associated with lower satisfaction. Fourth, cohesiveness may influence a group’s level of productivity, depending on the group’s performance-related norms. Fifth, diversity appears to have a mixed impact on group performance, with some studies suggesting that diversity can help performance and others suggesting it can hurt it. Sixth, role conflict is associated with job-induced tension and job dissatisfaction.94 Lastly, people generally prefer to communicate with others at their own status level or a higher one, rather than with those below them.95 The next chapter will explore several of these conclusions in greater depth.

IMPLICATIONS FOR MANAGERS ●

●

●

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Consider that the degree of congruence between the employee’s and the manager’s perception of the employee’s job influences the degree to which the manager will judge that employee effective. Therefore, be certain your employees fully understand their roles so you can accurately assess their performance. In group situations where the norms support high output, you can expect markedly higher individual performance than when the norms restrict output. Group norms that support antisocial behaviour increase the likelihood that individuals will engage in deviant workplace activities. Pay attention to the organizational status levels of the employee groups you create. Because lower-status people tend to participate less in group discussions, groups with high status differences are likely to inhibit input from lower-status members and reduce their potential. When forming employee groups, use larger groups for fact-finding activities and smaller groups for action-taking tasks. When creating larger groups, you should also provide measures of individual performance. To increase employee satisfaction, work on making certain your employees perceive their job roles the same way you perceive their roles.

People are more creative when they work alone

POINT/COUNTERPOINT

POINT I know groups are all the rage. Businesses are knocking down walls and cubicles to create more open, ‘collaborative’ environments. ‘Self-managing teams’ are replacing the traditional middle manager. Students in universities are constantly working on group projects, and even young children are finding themselves learning in small groups. I also know why groups are all the rage. Work, they say, has become too complex for individuals to perform alone. Groups are better at brainstorming and coming up with creative solutions to complicated problems. Groups also produce higher levels of

commitment and satisfaction – so long as group members develop feelings of cohesiveness and trust one another. But for every group that comes up with a creative solution, I’ll show you twice as many individuals who would come up with a better solution had they only been left alone. Consider creative geniuses like da Vinci, Newton and Picasso. Or more recently, Steve Wozniak, the co-founder of Apple Computer. All were introverts who toiled by themselves. According to Wozniak, ‘I’m going to give you some advice that might be hard to take. That advice is: work alone . . . not on a committee. Not on a team.’

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But enough anecdotal evidence. Research has also shown that groups can kill creativity. One study found that computer programmers at companies that give them privacy and freedom from interruptions outperformed their counterparts at companies that forced more openness and collaboration. Or consider Adrian Furnham, an organizational psychologist whose research

led him to conclude that ‘business people must be insane to use brainstorming groups’. People slack off in groups, and they’re afraid to communicate any ideas that might make them sound dumb. These problems don’t exist when people work alone. So take Picasso’s advice: ‘Without great solitude, no serious work is possible.’

COUNTERPOINT I’ll grant your point that there are circumstances in which groups can hinder creative progress, but if the right conditions are put in place, groups are simply much better at coming up with novel solutions to problems than are individuals. Using strategies such as the nominal group technique, generating ideas electronically rather than face-to-face, and ensuring that individuals do not evaluate others’ ideas until all have been generated are just a few ways you can set up groups for creative success. The fact of the matter is that problems are too complex these days for individuals to effectively perform alone. Consider the Rovers launched by NASA to roam around Mars collecting data.

An accomplishment like that is made possible only by a group, not a lone individual. Steve Wozniak’s collaboration with Steve Jobs is what really made Apple sail as a company. In addition, the most influential research is conducted by teams of academics, rather than individuals. Indeed, if you look at recent Nobel Prize winners in areas such as economics, physics and chemistry, the majority have been won by academics who collaborated on the research. So if you want creativity, two heads are in fact better than one. Sources: S. Cain, ‘The rise of the new groupthink’, New York Times, 15 January 2012, pp. 1, 6; and C. Faure, ‘Beyond brainstorming: effects of different group procedures on selection of ideas and satisfaction with the process’, Journal of Creative Behavior, 38 (2004), pp. 13–34.

QUESTIONS FOR REVIEW 1. Define group? What are the different types of groups? 2. What are the five stages of group development? 3. Do role requirements change in different situations? If

so, how? 4. How do group norms and status influence an individu-

al’s behaviour? 5. How does group size affect group performance?

6. What are the advantages and limitations of cohesive

groups? 7. What are the implications of diversity for group effec-

tiveness? 8. What are the strengths and weaknesses of group

(versus individual) decision making? 9. How effective are interacting, brainstorming and the

nominal group technique?

EXPERIENTIAL EXERCISE SURVIVING THE WILD: JOIN A GROUP OR GO IT ALONE? You are a member of a hiking party. After reaching base camp on the first day, you decide to take a quick sunset hike by yourself. After a few exhilarating miles, you decide to return to camp. On your way back, you realize that you are lost. You have shouted for help, to no avail. It is now dark. And getting cold.

Your task Without communicating with anyone else in your group, read the following scenarios and choose the best answer.

Keep track of your answers on a sheet of paper. You have 10 minutes to answer the 10 questions. 1. The first thing you decide to do is to build a fire.

However, you have no matches, so you use the bow-anddrill method. What is the bow-and-drill method? a. A dry, soft stick is rubbed between one’s hands against a board of supple green wood. b. A soft green stick is rubbed between one’s hands against a hardwood board.

EXPERIENTIAL EXERCISE   265

c. A straight stick of wood is quickly rubbed back-

a. Hold your right hand up as far as you can and

and-forth against a dead tree. d. Two sticks (one being the bow, the other the drill) are struck to create a spark.

b. Find Sirius and look 60 degrees above it and to the

look between your index and middle fingers. right. c. Look for the Big Dipper and follow the line created

2. It occurs to you that you can also use the fire as a

distress signal. When signalling with fire, how do you form the international distress signal? a. 2 fires b. 4 fires in a square c. 4 fires in a cross d. 3 fires in a line

by its cup end. d. Follow the line of Orion’s belt. 8. You come across a fast-moving stream. What is the

best way to cross it? a. Find a spot downstream from a sandbar, where the water will be calmer. b. Build a bridge. c. Find a rocky area, as the water will be shallow and you will have hand- and footholds. d. Find a level stretch where it breaks into a few channels.

3. You are very thirsty. You go to a nearby stream and

collect some water in the small metal cup you have in your backpack. How long should you boil the water? a. 15 minutes b. A few seconds c. 1 hour d. It depends on the altitude

9. After walking for about an hour, you feel several

spiders in your clothes. You don’t feel any pain, but you know some spider bites are painless. Which of these spider bites is painless? a. Black widow b. Brown recluse c. Wolf spider d. Harvestman (daddy longlegs)

4. You are very hungry, so you decide to eat what appear

to be edible berries. When performing the universal edibility test, what should you do? a. Do not eat for two hours before the test. b. If the plant stings your lip, confirm the sting by holding it under your tongue for 15 minutes. c. If nothing bad has happened two hours after digestion, eat half a cup of the plant and wait again. d. Separate the plant into its basic components and eat each component, one at a time.

10. You decide to eat some insects. Which insects should

you avoid? a. Adults that sting or bite b. Caterpillars and insects that have a pungent odour c. Hairy or brightly coloured ones d. All the above

5. Next, you decide to build a shelter for the evening. In

selecting a site, what do you not have to consider? a. It must contain material to make the type of shelter you need. b. It must be free of insects, reptiles and poisonous plants. c. It must be large enough and level enough for you to lie down comfortably. d. It must be on a hill so you can signal rescuers and keep an eye on your surroundings. 6. In the shelter that you built, you notice a spider. You

heard from a fellow hiker that black widow spiders populate the area. How do you identify a black widow spider? a. Its head and abdomen are black; its thorax is red. b. It is attracted to light. c. It runs away from light. d. It is a dark spider with a red or orange marking on the female’s abdomen. 7. After getting some sleep, you notice that the night sky

has cleared, so you decide to try to find your way back to base camp. You believe you should travel north and can use the North Star for navigation. How do you locate the North Star?

Group task Break into groups of five or six people. Now imagine that your whole group is lost. Answer each question as a group, employing a consensus approach to reach each decision. Once the group comes to an agreement, write the decision down on the same sheet of paper that you used for your individual answers. You will have approximately 20 minutes for the group task.

Scoring your answers Your instructor will provide you with the correct answers, which are based on expert judgements in these situations. Once you have received the answers, calculate (A) your individual score; (B) your group’s score; (C) the average individual score in the group; (D) the best individual score in the group. Write these down and consult with your group to ensure that these scores are accurate. A B C D

Your individual score ___________________________ Your group’s score _____________________________ Average individual score in group _________________ Best individual score in group ___________________

266  9 Foundations of group behaviour

Discussion questions 1. How did your group (B) perform relative to yourself (A)? 2. How did your group (B) perform relative to the average

individual score in the group (C)? 3. How did your group (B) perform relative to the best

individual score in the group (D)?

4. Compare your results with those of other groups. Did

some groups do a better job of outperforming individuals than others? 5. What do these results tell you about the effectiveness of

group decision making? 6. What can groups do to make group decision making

more effective?

ETHICAL DILEMMA Is social loafing unethical? As we discussed in this chapter, social loafing is one potential downside of working in groups. Regardless of the type of task – from games of Tug of War to working on group projects – research suggests that when working in a group, most individuals contribute less than if they were working on their own. Sometimes, these people are labelled shirkers, because they don’t fulfil their responsibilities as group members. Other times, social loafing is overlooked, and the industrious employees do the work alone to meet the group’s performance goals. Either way, social loafing is an ethical dilemma. Whether in class projects or in jobs we’ve held, most of us have experienced social loafing, or shirking, in groups. And there may have even been times when we were guilty of social loafing ourselves. We discussed earlier in this chapter some ways of discouraging social loafing, such as limiting group size, holding individuals responsible for their contributions, setting group goals and providing ‘hybrid’ incentives that reward both individual and group performance. Although these strategies might help to reduce the occurrence of social loafing, in many cases, it seems that people just try to work around shirkers rather than motivate them to perform at higher levels.

Brainstorming: a lousy idea for ideas? You know the routine. Gather a small group of people together. Appoint someone to write the ideas on a flipchart (or type them on a laptop). It’s called brainstorming, and it’s been around for a long time. Some brainstorming sessions flounder because group members are afraid of saying something stupid. Joe Polidoro, a manager who has worked at several banks, says of brainstorming sessions, ‘We sit there looking embarrassed like we’re all new to a nudist colony.’

Managers and employees must decide the ethics of social loafing acceptance. Managers must determine what level of social loafing for groups and for individual employees will be tolerated in terms of time wasted in non-productive meetings, performance expectations and counterproductive work behaviours. Employees must decide what limits to social loafing they will impose on themselves and what tolerance they have for social loafers in their work groups.

Questions 1. Do group members have an ethical responsibility to

report shirkers to leadership? If you were working on a group project for a class and a group member was social loafing, would you communicate this information to the instructor? Why or why not? 2. Do you think social loafing is always shirking (failing

to live up to your responsibilities)? Are there times when shirking is ethical or even justified? 3. Social loafing has been found to be higher in Western,

more individualist, nations than in other countries. Do you think this means we should tolerate shirking in these countries to a greater degree than if it occurred with someone from a more collectivist nation?

CASE INCIDENT 1 Others struggle with the scheduled nature of such sessions. Some feel as if they’re put in a room and told, ‘Okay, be creative now.’ ‘I’m more mercurial than that,’ says Kate Lee, a former manager at GE. Others think the whole idea of brainstorming is fatally flawed, that such sessions rarely produce the creative ideas they are meant to produce. Martha McGuire, senior VP of a bank, argued that the majority of recommendations resulting

case incident 2   267

from brainstorming sessions are obvious. ‘You end up with a more pedestrian solution than you would have had, had you not held the session,’ she says. Some argue that the real purpose of brainstorming sessions is not to produce the best idea. Rather, it’s to get buy-in for decisions that have already been made. Christopher Holland, a policy analyst for the Australian government, said, ‘These things are usually designed to give people the idea that they have input into decisions when the decisions have already been decided.’ One researcher argues that the problems of brainstorming demonstrate the problems of groups. ‘If you leave groups to their own devices,’ he says, ‘they’re going to do a very miserable job.’

Questions 1. Describe a time when you were a part of a brainstorming session.

2. List the benefits and drawbacks of the experience. 3. How do these compare with the issues raised in the case? 4. Based on what you have learned in this chapter, the case, and your own experience, is brainstorming a lousy idea for ideas? Source: Based on J. Sondberg, ‘Brainstorming works best if people scramble for ideas on their own’, Wall Street Journal, 13 June 2006, p. B1.

The dangers of groupthink Sometimes, the desire to maintain group harmony overrides the importance of making sound decisions. When that occurs, team members are said to engage in groupthink. Here are two examples: ●

●

A civilian worker at a large Air Force base recalls a time that groupthink overcame her team’s decision-making ability. She was a member of a process improvement team that an Air Force general had formed to develop a better way to handle the base’s mail, which included important letters from high-ranking military individuals. The team was composed mostly of civilians, and it took almost a month to come up with a plan. The problem: the plan was not a process improvement. Recalls the civilian worker, ‘I was horrified. What used to be 8 steps; now there were 19.’ The team had devised a new system that resulted in each piece of mail being read by several middle managers before reaching its intended recipient. The team’s new plan slowed down the mail considerably, with an average delay of two weeks. Even though the team members all knew that the new system was worse than its predecessor, no one wanted to question the team’s solidarity. The problems lasted for almost an entire year. It wasn’t until the general who formed the team complained about the mail that the system was changed. During the dot.com boom of the late 1990s, Virginia Turezyn, managing director of Infinity Capital, states that she was a victim of groupthink. At first, Turezyn was sceptical about the stability of the boom. But after continually reading about start-ups turning into multimillion-euro payoffs, she felt different. Turezyn decided to invest millions in several dot.coms, including I-drive, a company that provided electronic data storage. The problem was that I-drive was giving the storage away for free, and as a result, the company was losing money. Turezyn recalls one

CASE INCIDENT 2 board meeting at I-drive where she spoke up to no avail. ‘We’re spending way too much money,’ she screamed. The younger executives shook their heads and replied that if they charged for storage, they would lose their customers. Says Turezyn, ‘I started to think, “Maybe I’m just too old. Maybe I really don’t get it.”’ Unfortunately, Turezyn did get it. I-drive later filed for bankruptcy. According to Michael Useem, a professor at the Wharton College of Business, one of the main reasons that groupthink occurs is a lack of conflict. ‘A single devil’s advocate or whistle-blower faces a really uphill struggle,’ he states, ‘but if you [the naysayer] have one ally that is enormously strengthening.’

Questions 1. What are some factors that led to groupthink in the cases described here? What can teams do to attempt to prevent groupthink from occurring?

2. How might differences in status among group members contribute to groupthink? For example, how might lowerstatus members react to a group’s decision? Are lowerstatus members more or less likely to be dissenters? Why might higher-status group members be more effective dissenters?

3. Steve Ballmer said that he encouraged dissent when he was CEO of Microsoft. Can such norms guard against the occurrence of groupthink? As a manager, how would you try to cultivate norms that prevent groupthink?

4. How might group characteristics such as size and cohesiveness affect groupthink? Sources: Based on C. Hawn, ‘Fear and posing’, Forbes, 25 March 2002, pp. 22–5; and J. Sandberg, ‘Some ideas are so bad that only team efforts can account for them’, Wall Street Journal, 29 September 2004, p. B1.

268  9 Foundations of group behaviour

ENDNOTES  1 B. E. Ashforth and F. Mael, ‘Social identity theory and the organization’, Academy of Management Review, 14, 1 (1989), pp. 20–39; and M. A. Hogg and D. J. Terry, ‘Social identity and self-categorization processes in organizational contexts’, Academy of Management Review, 25, 1 (2000), pp. 121–40.   2 H. Takahashi, M. Kato, M. M. Matsuura, D. Mobbs, T. Suhara and Y. Okubo, ‘When your gain is my pain and your pain is my gain: neural correlates of envy and schadenfreude’, Science, 323, 5916 (2009), pp. 937–9; and C. W. Leach, R. Spears, N. R. Branscombe and B. Doosje, ‘Malicious pleasure: schadenfreude at the suffering of another group’, Journal of Personality and Social Psychology, 84, 5 (2003), pp. 932–43.  3 O. Yakushko, M. M. Davidson and E. N. Williams, ‘Identity salience model: a paradigm for integrating multiple identities in clinical practice’, Psychotherapy, 46, 2 (2009), pp. 180–92; and S. M. Toh and A. S. Denisi, ‘Host country nationals as socializing agents: a social identity approach’, Journal of Organizational Behavior, 28, 3 (2007), pp. 281–301.  4 D. M. Cable and D. S. DeRue, ‘The convergent and discriminant validity of subjective fit perceptions’, Journal of Applied Psychology, 87, 5 (2002), pp. 875–84; E. George and P. Chattopadhyay, ‘One foot in each camp: the dual identification of contract workers’, Administrative Science Quarterly, 50, 1 (2005), pp. 68–99; and D. M. Cable and J. R. Edwards, ‘Complementary and supplementary fit: a theoretical and empirical integration’, Journal of Applied Psychology, 89, 5 (2004), pp. 822–34.   5 P. F. McKay and D. R. Avery, ‘What has race got to do with it? Unraveling the role of racioethnicity in job seekers’ reactions to site visits’, Personnel Psychology, 59, 2 (2006), pp. 395–429; A. S. Leonard, A. Mehra and R. Katerberg, ‘The social identity and social networks of ethnic minority groups in organizations: a crucial test of distinctiveness theory’, Journal of Organizational Behavior, 29, 5 (2008), pp. 573–89.   6 M. D. Johnson, F. P. Morgeson, D. R. Ilgen, C. J. Meyer and J. W. Lloyd, ‘Multiple professional identities: examining differences in identification across work-related targets’, Journal of Applied Psychology, 91, 2 (2006), pp. 498–506.  7 K. Mignonac, O. Herrbach and S. Guerrero, ‘The interactive effects of perceived external prestige and need for organizational identification on turnover intentions’, Journal of Vocational Behavior, 69, 3 (2006), pp. 477–93; A. Carmeli and A. Shteigman, ‘Top management team behavioral integration in small-sized firms: a social identity perspective’, Group Dynamics, 14, 4 (2010), pp. 318–31.   8 M. Hogg and D. Abrams, ‘Towards a single-process uncertainty-reduction model of social motivation in groups’, in M. Hogg and D. Abrams (eds), Group Motivation: Social Psychological Perspectives (New York: Harvester-Wheatsheaf, 1993), pp. 173–90.  9 D. A. Gioia, K. N. Price, A. L. Hamilton and J. B. Thomas, ‘Change reference to forging an identity: an insider-outsider study of processes involved in the formation of organizational identity’, Administrative Science Quarterly, 55, 1 (2010), pp. 1–46. 10 J. F. McGrew, J. G. Bilotta and J. M. Deeney, ‘Software team formation and decay: extending the standard model for small groups’, Small Group Research, 30, 2 (1999), pp. 209–34. 11 B. W. Tuckman, ‘Developmental sequences in small groups’, Psychological Bulletin, June 1965, pp. 384–99; B. W. Tuckman

and M. C. Jensen, ‘Stages of small-group development revisited’, Group and Organizational Studies, December 1977, pp. 419–27; and M. F. Maples, ‘Group development: extending Tuckman’s theory’, Journal for Specialists in Group Work, Fall 1988, pp. 17–23; and K. Vroman and J. Kovacich, ‘Computermediated interdisciplinary teams: theory and reality’, Journal of Interprofessional Care, 16, 2 (2002), pp. 159–70. 12 J. E. Mathieu and T. L. Rapp, ‘Laying the foundation for successful team performance trajectories: the roles of team charters and performance strategies’, Journal of Applied Psychology, 94, 1 (2009), pp. 90–103; and E. C. Dierdorff, S. T. Bell and J. A. Belohlav, ‘The power of ‘we’: effects of psychological collectivism on team performance over time’, Journal of Applied Psychology, 96, 2 (2011), pp. 247–62. 13 C. J. G. Gersick, ‘Time and transition in work teams: toward a new model of group development’, Academy of Management Journal, March 1988, pp. 9–41; C. J. G. Gersick, ‘Marking time: predictable transitions in task groups’, Academy of Management Journal, June 1989, pp. 274–309; M. J. Waller, J. M. Conte, C. B. Gibson and M. A. Carpenter, ‘The effect of individual perceptions of deadlines on team performance’, Academy of Management Review, October 2001, pp. 586–600; and A. Chang, P. Bordia and J. Duck, ‘Punctuated equilibrium and linear progression: toward a new understanding of group development’, Academy of Management Journal, February 2003, pp. 106–17; see also H. Arrow, M. S. Poole, K. B. Henry, S. Wheelan and R. Moreland, ‘Time, change, and development: the temporal perspective on groups’, Small Group Research, February 2004, pp. 73–105. 14 Gersick, ‘Time and transition in work teams’; and Gersick, ‘Marking time’. 15 A. Seers and S. Woodruff, ‘Temporal pacing in task forces: group development or deadline pressure?’, Journal of Management, 23, 2 (1997), pp. 169–87. 16 See D. M. Rousseau, Psychological Contracts in Organizations: Understanding Written and Unwritten Agreements (Thousand Oaks, CA: Sage, 1995); E. W. Morrison and S. L. Robinson, ‘When employees feel betrayed: a model of how psychological contract violation develops’, Academy of Management Review, April 1997, pp. 226–56; D. Rousseau and R. Schalk (eds), Psychological Contracts in Employment: Cross-Cultural Perspectives (San Francisco, CA: Jossey-Bass, 2000); L. Sels, M. Janssens and I. Van den Brande, ‘Assessing the nature of psychological contracts: a validation of six dimensions’, Journal of Organizational Behavior, June 2004, pp. 461–88; and C. Hui, C. Lee and D. M. Rousseau, ‘Psychological contract and organizational citizenship behavior in China: investigating generalizability and instrumentality’, Journal of Applied Psychology, April 2004, pp. 311–21. 17 M. D. Collins, ‘The effect of psychological contract fulfillment on manager turnover intentions and its role as a mediator in a casual, limited-service restaurant environment’, International Journal of Hospitality Management, 29, 4 (2010), pp. 736–42; J. M. Jensen, R. A. Opland and A. M. Ryan, ‘Psychological contracts and counterproductive work behaviors: employee responses to transactional and relational breach’, Journal of Business and Psychology, 25, 4 (2010), pp. 555–68. 18 D. C. Thomas, S. R. Fitzimmons, E. C. Ravlin, K. Y. Au, B. Z. Ekelund and C. Barzantny, ‘Psychological contracts across cultures’, Organization Studies, 31 (2010), pp. 1437–58.

ENDNOTES   269 19 See M. F. Peterson et al., ‘Role conflict, ambiguity, and overload: a 21-nation study’, Academy of Management Journal, 38, 2 (April 1995), pp. 429–52; and I. H. Settles, R. M. Sellers and A. Damas Jr, ‘One role or two? The function of psychological separation in role conflict’, Journal of Applied Psychology, June 2002, pp. 574–82. 20 See, for example, F. T. Amstad, L. L. Meier, U. Fasel, A. Elfering and N. K. Semmer, ‘A meta-analysis of work–family conflict and various outcomes with a special emphasis on cross-domain versus matching-domain relations’, Journal of Occupational Health Psychology, 16, 2 (2011), pp. 151–69. 21 M. A. Hogg and D. J. Terry, ‘Social identity and self- categorization processes in organizational contexts’, Academy of Management Review, 25, 1 (2000), pp. 121–40. 22 D. Vora and T. Kostova, ‘A model of dual organizational identification in the context of the multinational enterprise’, Journal of Organizational Behavior, 28 (2007), pp. 327–50. 23 C. Reade, ‘Dual identification in multinational corporations: local managers and their psychological attachment to the subsidiary versus the global organization’, International Journal of Human Resource Management, 12, 3 (2001), pp. 405–24. 24 P. G. Zimbardo, C. Haney, W. C. Banks and D. Jaffe, ‘The mind is a formidable jailer: a Pirandellian prison’, New York Times, 8 April 1973, pp. 38–60; and C. Haney and P. G. Zimbardo, ‘Social roles and role-playing: observations from the Stanford prison study’, Behavioral and Social Science Teacher, January 1973, pp. 25–45. 25 S. A. Haslam and S. Reicher, ‘Stressing the group: social identity and the unfolding dynamics of responses to stress’, Journal of Applied Psychology, 91, 5 (2006), pp. 1037–52; S. Reicher and S. A. Haslam, ‘Rethinking the psychology of tyranny: The BBC Prison Study’, British Journal of Social Psychology, 45, 1 (2006), pp. 1–40; and P. G. Zimbardo, ‘On rethinking the psychology of tyranny: The BBC Prison Study’, British Journal of Social Psychology, 45, 1 (2006), pp. 47–53. 26 For a review of the research on group norms, see J. R. Hackman, ‘Group influences on individuals in organizations’, in M. D. Dunnette and L. M. Hough (eds), Handbook of Industrial & Organizational Psychology, 2nd edn, vol. 3 (Palo Alto, CA: Consulting Psychologists Press, 1992), pp. 235–50. For a more recent discussion, see M. G. Ehrhart and S. E. Naumann, ‘Organizational citizenship behavior in work groups: a group norms approach’, Journal of Applied Psychology, December 2004, pp. 960–74. 27 Adapted from P. S. Goodman, E. Ravlin and M. Schminke, ‘Understanding groups in organizations’, in L. L. Cummings and B. M. Staw (eds), Research in Organizational Behavior, vol. 9 (Greenwich, CT: JAI Press, 1987), p. 159. 28 E. Mayo, The Human Problems of an Industrial Civilization (New York: Macmillan, 1933); and F. J. Roethlisberger and W. J. Dickson, Management and the Worker (Cambridge, MA: Harvard University Press, 1939). 29 C. A. Kiesler and S. B. Kiesler, Conformity (Reading, MA: Addison-Wesley, 1969). 30 S. E. Asch, ‘Effects of group pressure upon the modification and distortion of judgments’, in H. Guetzkow (ed.), Groups, Leadership and Men (Pittsburgh: Carnegie Press, 1951), pp. 177– 90; and S. E. Asch, ‘Studies of independence and conformity: a minority of one against a unanimous majority’, Psychological Monographs: General and Applied, 70, 9 (1956), pp. 1–70. 31 R. Bond and P. B. Smith, ‘Culture and conformity: a meta-analysis of studies using Asch’s (1952, 1956) line judgment task’, Psychological Bulletin, January 1996, pp. 111–37.

32 See S. L. Robinson and R. J. Bennett, ‘A typology of deviant workplace behaviors: a multidimensional scaling study’, Academy of Management Journal, April 1995, pp. 555–72; S. L. Robinson and A. M. O’Leary-Kelly, ‘Monkey see, monkey do: the influence of work groups on the antisocial behavior of employees’, Academy of Management Journal, December 1998, pp. 658–72; and R. J. Bennett and S. L. Robinson, ‘The past, present, and future of workplace deviance’, in J. Greenberg (ed.), Organizational Behavior: The State of the Science, 2nd edn (Mahwah, NJ: Erlbaum, 2003), pp. 237–71. 33 C. M. Pearson, L. M. Andersson and C. L. Porath, ‘Assessing and attacking workplace civility’, Organizational Dynamics, 29, 2 (2000), p. 130; see also C. Pearson, L. M. Andersson and C. L. Porath, ‘Workplace incivility’, in S. Fox and P. E. Spector (eds), Counterproductive Work Behavior: Investigations of Actors and Targets (Washington, DC: American Psychological Association, 2005), pp. 177–200. 34 S. Lim, L. M. Cortina and V. J. Magley, ‘Personal and workgroup incivility: impact on work and health outcomes’, Journal of Applied Psychology, 93, 1 (2008), pp. 95–107. 35 M. S. Christian and A. P. J. Ellis, ‘Examining the effects of sleep deprivation on workplace deviance: a self-regulatory ­perspective’, Academy of Management Journal, 54, 5 (2011), pp. 913–34. 36 Robinson and O’Leary-Kelly, ‘Monkey see, monkey do’; and T. M. Glomb and H. Liao, ‘Interpersonal aggression in workgroups: social influence, reciprocal, and individual effects’, Academy of Management Journal, 46 (2003), pp. 486–96. 37 P. Bamberger and M. Biron, ‘Group norms and excessive absenteeism: the role of peer referent others’, Organizational Behavior and Human Decision Processes, 103, 2 (2007), pp. 179–96; and A. Väänänen, N. Tordera, M. Kivimäki, A. Kouvonen, J. Pentti, A. Linna and J. Vahtera, ‘The role of work group in individual sickness absence behavior’, Journal of Health & Human Behavior, 49, 4 (2008), pp. 452–67. 38 M. S. Cole, F. Walter and H. Bruch, ‘Affective mechanisms linking dysfunctional behavior to performance in work teams: a moderated mediation study’, Journal of Applied Psychology, 93, 5 (2008), pp. 945–58. 39 See R. S. Feldman, Social Psychology, 3rd edn (Upper Saddle River, NJ: Prentice-Hall, 2001), pp. 464–5. 40 Cited in Hackman, ‘Group influences on individuals in organizations’, p. 236. 41 P. F. Hewlin, ‘Wearing the cloak: antecedents and consequences of creating facades of conformity’, Journal of Applied Psychology, 94, 3 (2009), pp. 727–41. 42 J. A. Wiggins, F. Dill and R. D. Schwartz, ‘On “statusliability”’, Sociometry, April–May 1965, pp. 197–209. 43 B. Groysberg, J. T. Polzer and H. A. Elfenbein, ‘Too many cooks spoil the broth: how high-status individuals decrease group effectiveness’, Organization Science, May–June 2011, pp. 722–37. 44 See J. M. Levine and R. L. Moreland, ‘Progress in small group research’, in J. T. Spence, J. M. Darley and D. J. Foss (eds), Annual Review of Psychology, vol. 41 (Palo Alto, CA: Annual Reviews Inc., 1990), pp. 585–634; S. D. Silver, B. P. Cohen and J. H. Crutchfield, ‘Status differentiation and information exchange in face-to-face and computer-mediated idea generation’, Social Psychology Quarterly, 1994, pp. 108–23; and J. M. Twenge, ‘Changes in women’s assertiveness in response to status and roles: a cross-temporal meta-analysis, 1931–1993’, Journal of Personality and Social Psychology, July 2001, pp. 133–45.

270  9 Foundations of group behaviour 45 A. M. Christie and J. Barling, ‘Beyond status: relating status inequality to performance and health in teams’, Journal of Applied Psychology, 95, 5 (2010), pp. 920–34; and L. H. Nishii and D. M. Mayer, ‘Do inclusive leaders help to reduce turnover in diverse groups? The moderating role of leader-member exchange in the diversity to turnover relationship’, Journal of Applied Psychology, 94, 6 (2009), pp. 1412–26. 46 V. Venkataramani, S. G. Green and D. J. Schleicher, ‘Wellconnected leaders: the impact of leaders’ social network ties on LMX and members’ work attitudes’, Journal of Applied Psychology, 95, 6 (2010), pp. 1071–84. 47 H. van Dijk and M. L. van Engen, ‘A status perspective on the consequences of work group diversity’, Journal of Occupational and Organizational Psychology, June 2013, pp. 223–41. 48 M. Kilduff and D. Krackhardt, ‘Structural analysis of the internal market for reputation in organizations’, Academy of Management Journal, 37, 1 (1994), pp. 87–108. 49 E. J. Thomas and C. F. Fink, ‘Effects of group size’, Psychological Bulletin, July 1963, pp. 371–84; A. P. Hare, Handbook of Small Group Research (New York: The Free Press, 1976); and M. E. Shaw, Group Dynamics: The Psychology of Small Group Behavior, 3rd edn (New York: McGraw-Hill, 1981). 50 G. H. Seijts and G. P. Latham, ‘The effects of goal setting and group size on performance in a social dilemma’, Canadian Journal of Behavioral Science, 32, 2 (2000), pp. 104–16. 51 Shaw, Group Dynamics: The Psychology of Small Group Behavior. 52 See, for instance, D. R. Comer, ‘A model of social loafing in real work groups’, Human Relations, June 1995, pp. 647–67; S. M. Murphy, S. J. Wayne, R. C. Liden and B. Erdogan, ‘Understanding social loafing: the role of justice perceptions and exchange relationships’, Human Relations, January 2003, pp. 61–84; and R. C. Liden, S. J. Wayne, R. A. Jaworski and N. Bennett, ‘Social loafing: a field investigation’, Journal of Management, April 2004, pp. 285–304. 53 W. Moede, ‘Die richtlinien der leistungs-psychologie’, Industrielle Psychotechnik, 4 (1927), pp. 193–207. See also D. A. Kravitz and B. Martin, ‘Ringelmann rediscovered: the original article’, Journal of Personality and Social Psychology, May 1986, pp. 936–41. 54 See, for example, J. A. Shepperd, ‘Productivity loss in performance groups: a motivation analysis’, Psychological Bulletin, January 1993, pp. 67–81; and S. J. Karau and K. D. Williams, ‘Social loafing: a meta-analytic review and theoretical integration’, Journal of Personality and Social Psychology, October 1993, pp. 681–706. 55 A. W. Delton, L. Cosmides, M. Guemo, T. E. Robertson and J. Tooby, ‘The psychosemantics of free riding: dissecting the architecture of a moral concept’, Journal of Personality and Social Psychology, 102, 6 (2012), pp. 1252–70. 56 S. G. Harkins and K. Szymanski, ‘Social loafing and group evaluation’, Journal of Personality and Social Psychology, December 1989, pp. 934–41. 56 D. L. Smrt and S. J. Karau, ‘Protestant work ethic moderates social loafing’, Group Dynamics: Theory, Research and Practice, September 2011, pp. 267–74. 57 A. Gunnthorsdottir and A. Rapoport, ‘Embedding social dilemmas in intergroup competition reduces free-riding’, Organizational Behavior and Human Decision Processes, 101 (2006), pp. 184–99; and E. M. Stark, J. D. Shaw and M. K. Duffy, ‘Preference for group work, winning orientation, and social loafing behavior in groups’, Group and Organization Management, 32, 6 (2007), pp. 699–723.

58 For some of the controversy surrounding the definition of cohesion, see J. Keyton and J. Springston, ‘Redefining cohesiveness in groups’, Small Group Research, May 1990, pp. 234–54. 59 B. Mullen and C. Cooper, ‘The relation between group cohesiveness and performance: an integration’, Psychological Bulletin, March 1994, pp. 210–27; P. M. Podsakoff, S. B. MacKenzie and M. Ahearne, ‘Moderating effects of goal acceptance on the relationship between group cohesiveness and productivity’, Journal of Applied Psychology, December 1997, pp. 974–83; and D. J. Beal, R. R. Cohen, M. J. Burke and C. L. McLendon, ‘Cohesion and performance in groups: a meta-analytic clarification of construct relations’, Journal of Applied Psychology, December 2003, pp. 989–1004. 60 Ibid. 61 Based on J. L. Gibson, J. M. Ivancevich and J. H. Donnelly Jr, Organizations, 8th edn (Burr Ridge, IL: Irwin, 1994), p. 323. 62 D. S. Staples and L. Zhao, ‘The effects of cultural diversity in virtual teams versus face-to-face teams’, Group Decision and Negotiation, July 2006, pp. 389–406. 63 N. Chi, Y. Huang and S. Lin, ‘A double-edged sword? Exploring the curvilinear relationship between organizational tenure diversity and team innovation: the moderating role of team-oriented HR practices’, Group and Organization Management, 34, 6 (2009), pp. 698–726. 64 K. J. Klein, A. P. Knight, J. C. Ziegert, B. C. Lim and J. L. Saltz, ‘When team members’ values differ: the moderating role of team leadership’, Organizational Behavior and Human Decision Processes, 114, 1 (2011), pp. 25–36; and G. Park and R. P. DeShon, ‘A multilevel model of minority opinion expression and team decision-making effectiveness’, Journal of Applied Psychology, 95, 5 (2010), pp. 824–33. 65 M. Rigoglioso, ‘Diverse backgrounds and personalities can strengthen groups’, Stanford Knowledgebase, 15 August 2006, www.stanford.edu/group/knowledgebase/. 66 K. W. Phillips and D. L. Loyd, ‘When surface and deep-level diversity collide: the effects on dissenting group members’, Organizational Behavior and Human Decision Processes, 99 (2006), pp. 143–60; and S. R. Sommers, ‘On racial diversity and group decision making: identifying multiple effects of racial composition on jury deliberations’, Journal of Personality and Social Psychology, April 2006, pp. 597–612. 67 E. Mannix and M. A. Neale, ‘What differences make a difference? The promise and reality of diverse teams in organizations’, Psychological Science in the Public Interest, October 2005, pp. 31–55. 68 See M. B. Thatcher and P. C. Patel, ‘Group faultlines: a review, integration, and guide to future research’, Journal of Management, 38, 4 (2012), pp. 969–1009. 69 K. Bezrukova, S. M. B. Thatcher, K. A. Jehn and C. S. Spell, ‘The effects of alignments: examining group faultlines, organizational cultures, and performance’, Journal of Applied Psychology, 97, 1 (2012), pp. 77–92. 70 R. Rico, M. Sanchez-Manzanares, M. Antino and D. Lau, ‘Bridging team faultlines by combining task role assignment and goal structure strategies’, Journal of Applied Psychology, 97, 2 (2012), pp. 407–20. 71 N. Foote, E. Matson, L. Weiss and E. Wenger, ‘Leveraging group knowledge for high-performance decision-making’, Organizational Dynamics, 31, 2 (2002), pp. 280–95. 72 See N. R. F. Maier, ‘Assets and liabilities in group problem solving: the need for an integrative function’, Psychological Review, April 1967, pp. 239–49; G. W. Hill, ‘Group versus

ENDNOTES   271 individual performance: are N+1 heads better than one?’, Psychological Bulletin, May 1982, pp. 517–39; A. E. Schwartz and J. Levin, ‘Better group decision making’, Supervisory Management, June 1990, p. 4; and R. F. Martell and M. R. Borg, ‘A comparison of the behavioral rating accuracy of groups and individuals’, Journal of Applied Psychology, February 1993, pp. 43–50. 73 D. Gigone and R. Hastie, ‘Proper analysis of the accuracy of group judgments’, Psychological Bulletin, January 1997, pp. 149–67; and B. L. Bonner, S. D. Sillito and M. R. Baumann, ‘Collective estimation: accuracy, expertise, and extroversion as sources of intra-group influence’, Organizational Behavior and Human Decision Processes, 103 (2007), pp. 121–33. 74 See, for example, W. C. Swap and Associates, Group Decision Making (Newbury Park, CA: Sage, 1984). 75 D. D. Henningsen, M. G. Cruz and M. L. Miller, ‘Role of social loafing in predeliberation decision making’, Group Dynamics: Theory, Research, and Practice, 4, 2 (June 2000), pp. 168–75. 76 J. H. Davis, Group Performance (Reading, MA: Addison-Wesley, 1969); J. P. Wanous and M. A. Youtz, ‘Solution diversity and the quality of group decisions’, Academy of Management Journal, March 1986, pp. 149–59; and R. Libby, K. T. Trotman and I. Zimmer, ‘Member variation, recognition of expertise, and group performance’, Journal of Applied Psychology, February 1987, pp. 81–7. 77 I. L. Janis, Groupthink: Psychological Studies of Policy Decisions and Fiascoes (Boston, MA: Houghton Mifflin, 1982); W. Park, ‘A review of research on groupthink’, Journal of Behavioral Decision Making, July 1990, pp. 229–45; J. N. Choi and M. U. Kim, ‘The organizational application of groupthink and its limits in organizations’, Journal of Applied Psychology, April 1999, pp. 297–306; and W. W. Park, ‘A comprehensive empirical investigation of the relationships among variables of the groupthink model’, Journal of Organizational Behavior, December 2000, pp. 873–87. 78 Janis, Groupthink. 79 G. Moorhead, R. Ference and C. P. Neck, ‘Group decision fiascos continue: space shuttle Challenger and a revised groupthink framework’, Human Relations, May 1991, pp. 539–50; E. J. Chisson, The Hubble Wars (New York: HarperPerennial, 1994); and C. Covault, ‘Columbia revelations alarming e-mails speak for themselves. But administrator O’Keefe is more concerned about board findings on NASA decision-making’, Aviation Week & Space Technology, 3 March 2003, p. 26. 80 J. Eaton, ‘Management communication: the threat of groupthink’, Corporate Communication, 6, 4 (2001), pp. 183–92. 81 G. Park and R. P. DeShon, ‘A multilevel model of minority opinion expression and team decision-making effectiveness’, Journal of Applied Psychology, 95, 5 (2010), pp. 824–33.

over time’, Organizational Behavior and Human Decision Processes, 113, 1 (2010), pp. 13–24. 85 See N. R. F. Maier, Principles of Human Relations (New York: Wiley, 1952); Janis, Groupthink: Psychological Studies of Policy Decisions and Fiascoes; C. R. Leana, ‘A partial test of Janis’ Groupthink model: effects of group cohesiveness and leader behavior on defective decision making’, Journal of Management, Spring 1985, pp. 5–17; and N. Richardson Ahlfinger and J. K. Esser, ‘Testing the Groupthink model: effects of promotional leadership and conformity predisposition’, Social Behavior & Personality, 29, 1 (2001), pp. 31–41. 86 See P. W. Paese, M. Bieser and M. E. Tubbs, ‘Framing effects and choice shifts in group decision making’, Organizational Behavior and Human Decision Processes, October 1993, pp. 149–65; and I. Yaniv, ‘Group diversity and decision quality: amplification and attenuation of the framing effect’, International Journal of Forecasting, January–March 2011, pp. 41–9. 87 R. D. Clark III, ‘Group-induced shift toward risk: a critical appraisal’, Psychological Bulletin, October 1971, pp. 251–70; M. Brauer and C. M. Judd, ‘Group polarization and repeated attitude expression: a new take on an old topic’, European Review of Social Psychology 7, (1996), pp. 173–207; and M. P. Brady and S. Y. Wu, ‘The aggregation of preferences in groups: identity, responsibility, and polarization’, Journal of Economic Psychology, 31, 6 (2010), pp. 950–63. 88 Z. Krizan and R. S. Baron, ‘Group polarization and choice-dilemmas: how important is self-categorization?’, European Journal of Social Psychology, 37, 1 (2007), pp. 191–201. 89 A. F. Osborn, Applied Imagination: Principles and Procedures of Creative Thinking, 3rd edn (New York: Scribner, 1963). See also T. Rickards, ‘Brainstorming revisited: a question of context’, International Journal of Management Reviews, March 1999, pp. 91–110; and R. P. McGlynn, D. McGurk, V. S. Effland, N. L. Johll and D. J. Harding, ‘Brainstorming and task performance in groups constrained by evidence’, Organizational Behavior and Human Decision Processes, January 2004, pp. 75–87. 90 N. L. Kerr and R. S. Tindale, ‘Group performance and decision-making’, Annual Review of Psychology, 55 (2004), pp. 623–55. 91 See A. L. Delbecq, A. H. Van deVen and D. H. Gustafson, Group Techniques for Program Planning: A Guide to Nominal and Delphi Processes (Glenview, IL: Scott, Foresman, 1975); and P. B. Paulus and H.-C. Yang, ‘Idea generation in groups: a basis for creativity in organizations’, Organizational Behavior and Human Decision Processing, May 2000, pp. 76–87. 92 C. Faure, ‘Beyond brainstorming: effects of different group procedures on selection of ideas and satisfaction with the process’, Journal of Creative Behavior, 38 (2004), pp. 13–34.

83 Ibid., p. 68.

93 A. G. Bedeian and A. A. Armenakis, ‘A path-analytic study of the consequences of role conflict and ambiguity’, Academy of Management Journal, June 1981, pp. 417–24; and P. L. Perrewe, K. L. Zellars, G. R. Ferris, A. M. Rossi, C. J. Kacmar and D. A. Ralston, ‘Neutralizing job stressors: political skill as an antidote to the dysfunctional consequences of role conflict’, Academy of Management Journal, February 2004, pp. 141–152.

84 J. A. Goncalo, E. Polman and C. Maslach, ‘Can confidence come too soon? Collective efficacy, conflict, and group performance

94 M. E. Shaw, Group Dynamics: The Psychology of Small Group Behavior, 3rd edn (New York: McGraw-Hill, 1981).

82 M. E. Turner and A. R. Pratkanis, ‘Mitigating groupthink by stimulating constructive conflict’, in C. De Dreu and E. Van de Vliert (eds), Using Conflict in Organizations (London: Sage, 1997), pp. 53–71.

CHAPTER 10 Understanding work teams Learning objectives After studying this chapter, you should be able to: 1 Analyse the growing popularity of teams in organizations. 2 Contrast groups and teams. 3 Contrast the five types of teams. 4 Identify the characteristics of effective teams. 5 show how organizations can create team players. 6 Decide when to use individuals instead of teams.

Teamwork is the fuel that allows common people to attain uncommon results. Andrew Carnegie

FOOD FOR THOUGHT

Lessons from the kitchen for executives by Emma de Vita While most office bosses need not concern themselves with their colleagues’ knife skills, food hygiene habits or whether they know their fendu from their tordu breadshaping techniques, there is much the busy, multitasking manager can learn from a professional kitchen. Chefs know a great deal about managing a team under high pressure. Ben Spalding is the executive chef of one of London’s busiest restaurants, Aqua Shard, on the 31st floor of the capital’s landmark skyscraper. But if you thought a top flight kitchen should be frantic and noisy, think again. ‘I love it calm,’ he says. ‘The best kitchens are quiet.’ The 28-year-old works from 7 am to 1 am five days a week, manages a team of 41 chefs and oversees 700 meals a day. Mr Spalding says the secret to a successful kitchen, like any workplace that demands high-performing teamwork, is its positive energy. He will not allow any disrespect. ‘The morale of the chefs is extremely important,’ he says. ‘You’ve got to have an upbeat attitude.’

Because about half of his chefs are not in the kitchen at any one time, he has given each a clipboard for printed updates. He says it helps eliminate problems and shows clear responsibility should something go wrong. For example, a recent note reminded them to use Maldon salt, not table salt, when preparing fish. Anne Loehr, a former chef and hotelier turned leadership consultant says there are lessons executives can learn from chefs. The most important is clear communication. Although a chef needs to give concise direction to their team to ensure orders are met on time and to the standard required, Ms Loehr says the common five-minute stand-up meeting before a service, where everyone in the restaurant quickly gives an update on their work, is invaluable for the smooth running of operations. A daily meeting like this could benefit any busy office team, she says. It also pays to respect the camaraderie created among a team that works hard together all day. It is no good just to slog it out, you need to celebrate too, recommends Ms Loehr. But according to Mr Spalding, most importantly, ‘you need a lot of self discipline for this job’.

Neil Setchfield / Alamy Stock Photo

He organises football games and regular parties for his team. He describes his leadership style as one informed by ‘respect, humility and integrity’. Although his team of chefs must work together seamlessly, Mr Spalding has come to appreciate that they must also be given the autonomy to do things their own way. ‘It is extremely important for us to manage chefs individually. You can’t do it collectively.’ And although he finds it difficult, to give his chefs a sense of freedom, he allows

them to make small mistakes. In order to have some kind of order, Mr Spalding creates spreadsheets that cover everything from upcoming chef holidays to work placements, sticking them on his office walls. ‘If I didn’t do this, I’d lose my marbles.’ He says using them saves him 45 minutes a day.

Source: de Vita, E. (2015) Lessons from the kitchen for executives, FT.COM, 26 July. © The Financial Times Limited. All Rights Reserved.

274  10 Understanding work teams

Teams are increasingly becoming the primary means for organizing work in contemporary business firms. In fact, there are few more damaging insults than ‘not a team player’. This chapter explores the growth and importance of teams in organizations.

REFLECTION Think about a time where you have led, or been part of a team and consider the following questions: ‘How good am I at building and leading a team?’; ‘Do you think there is such a thing as team players? If yes, what are their behaviours?’; ‘Do you think there is such a thing as natural team leaders? If yes, what are their behaviours?’

Why have teams become so popular? 1  Analyse the growing Decades ago, when companies such as Volvo, W. L. Gore and General Foods introduced teams popularity of teams in into their production processes, it made news because no one else was doing it. Today, it’s just the opposite. It’s the organization that doesn’t use teams that has become newsworthy. Teams organizations.

are everywhere. How do we explain the current popularity of teams? As organizations have restructured themselves to compete more effectively and efficiently, they have turned to teams as a better way to use employee talents. Management has found that teams are more flexible and responsive to changing events than are traditional departments or other forms of permanent groupings. Teams have the capability to quickly assemble, deploy, refocus and disband. But don’t overlook the motivational properties of teams. Consistent with our discussion in Chapter 7 of the role of employee involvement as a motivator, teams facilitate employee participation in operating decisions. So another explanation for the popularity of teams is that they are an effective means for management to democratize their organizations and increase employee motivation. The fact that organizations have turned to teams doesn’t necessarily mean they’re always effective. Decision makers, as humans, can be swayed by fads and herd mentality. Are teams 2  Contrast groups and truly effective? What conditions affect their potential? How do members work together? These are some of the questions we’ll answer in this chapter. teams.

Differences between groups and teams work group A group that interacts primarily to share information and to make decisions to help each group member perform within his or her area of responsibility. work team A group whose individual efforts result in performance that is greater than the sum of the individual inputs.

Groups and teams are not the same thing. In this section, we define and clarify the difference between work groups and work teams.1 We have defined a group as two or more individuals, interacting and interdependent, who have come together to achieve particular objectives (see Chapter 9). A work group is a group that interacts primarily to share information and to make decisions to help each member perform within his or her area of responsibility. Work groups have no need or opportunity to engage in collective work that requires joint effort. So their performance is merely the summation of each group member’s individual contribution. There is no positive synergy that would create an overall level of performance that is greater than the sum of the inputs. A work team, on the other hand, generates positive synergy through coordinated effort. The individual efforts result in a level of performance greater than the sum of those individual inputs. In both work groups and work teams, there are often behavioural expectations of

Differences between groups and teams   275

Work teams

Work groups

Share information

Goal

Neutral (sometimes negative)

Synergy

Individual

Accountability

Random and varied

Skills

Collective performance Positive Individual and mutual Complementary

Figure 10.1  Comparing work groups and work teams

members, collective normalization efforts, active group dynamics, and some level of d ­ ecision making (even if just informally about the scope of membership). Both work groups and work teams may be called upon to generate ideas, pool resources or coordinate logistics such as work schedules; for the work group, however, this effort will be limited to information gathering for decision makers outside the group (not team actionable). Whereas we can think of a work team as a subset of a work group, the team is constructed to be purposeful (symbiotic) in its member interaction. The distinction between a work group and a work team should be kept even when the terms are mentioned interchangeably in differing contexts. Figure 10.1 highlights the differences between work groups and work teams. These definitions help clarify why so many organizations have recently restructured work processes around teams. Management is looking for positive synergy that will allow the organizations to increase performance. The extensive use of teams creates the potential for an organization to generate greater outputs with no increase in inputs. Notice, however, that we said potential. There is nothing inherently magical in the creation of teams that ensures the achievement of positive synergy. Merely calling a group a team doesn’t automatically increase its performance. As we show later in this chapter, effective teams have certain common characteristics. If management hopes to gain increases in organizational performance through the use of teams, it needs to ensure that its teams possess these characteristics.

Team working

FACE THE FACTS spectrum, only 20 per cent of employees in the health sector do not work in a team.

The fifth European Working Conditions Survey i­nterviewed 44,000 workers from 34 European countries on their working and employment conditions. Here are some results:

●

●

68 per cent of EU workers perform part or all of their work in teams.

There is a predominance of teamwork in industrial sectors in contrast to the services sector.

●

●

Nearly half of European workers (48 per cent) always belong to the same team. Some (19 per cent) work in several teams, while 32 per cent do not work in a team or group.

●

Not working in a team is more frequent in sectors where people tend to work alone, such as transport (49 per cent), wholesale and retail (35 per cent). At the other end of the

Self-managed autonomous teams are most frequent in Denmark (38 per cent), Sweden (34 per cent), Finland (33  per cent), Norway (32 per cent) and Ireland (31 per cent). The lowest level is found in Portugal where only 3 per cent of workers report working in a team with a high level of autonomy.

Source: Eurofound, Fifth European Working Conditions Survey (Luxembourg: Publications Office of the European Union, 2012).

276  10 Understanding work teams

Types of teams

Technology

?

Problem-solving Self-managed

Cross-functional

Virtual

Figure 10.2  Four types of teams 3  Contrast the five types of teams

Teams can do a variety of things. They can make products, provide services, negotiate deals, coordinate projects, offer advice and make decisions.2 In this section, first we describe four common types of teams in organizations: problem-solving teams, self-managed work teams, cross-functional teams and virtual teams (see Figure 10.2). Then, we describe multiteam systems, which utilize a ‘team of teams’ and are becoming increasingly widespread as work increases in complexity.

Problem-solving teams problem-solving teams Groups of 5 to 12 employees from the same department who meet for a few hours each week to discuss ways of improving quality, efficiency and the work environment.

self-managed work teams Groups of 10 to 15 people who take on responsibilities of their former supervisors.

In the past, teams were typically composed of 5 to 12 hourly employees from the same department who met for a few hours each week to discuss ways of improving quality, efficiency and the work environment.3 These problem-solving teams rarely have the authority to unilaterally implement any of their suggestions. Merrill Lynch created a problem-solving team to figure out ways to reduce the number of days it took to open a new cash management account.4 By suggesting cutting the number of steps from 46 to 36, the team reduced the average number of days from 15 to 8.

Self-managed work teams Although problem-solving teams involve employees in decisions, they ‘only’ make recommendations. Some organizations have gone further and created teams that can not only solve problems but implement solutions and take responsibility for outcomes. Self-managed work teams are groups of employees (typically 10 to 15 in number) who perform highly related or interdependent jobs and take on many of the responsibilities of supervisors.5 Typically, these tasks are involved in planning and scheduling work, assigning tasks to members, making operating decisions, taking action on problems and working with suppliers and customers. Fully self-managed work teams even select their own members and have the members evaluate each other’s performance. As a result, supervisory positions take on decreased importance and may even be eliminated. Maintenance workers at Ireland’s Dairygold Cooperative Society Ltd run their function on the basis of a self-managed work team, and have responsibility for budgeting, planning of work and liaising with production. They schedule their own holidays and working hours (within certain constraints), and their team leader negotiates the annual maintenance budget with management.6 Research on the effectiveness of self-managed work teams has not been uniformly positive.7 Self-managed teams do not typically manage conflicts well. When disputes arise, members stop cooperating and power struggles ensue, which leads to lower group performance.8 However, when team members feel confident that they can speak up without being embarrassed, rejected or punished by other team members – in other words, when they feel psychologically safe – conflict is actually beneficial and boosts performance.9 In addition, one study of 45 self-managing teams of factory workers found

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Types of teams   277

At the Louis Vuitton factory in Ducey, France, all employees work in problem-solving teams, with each team focusing on one product at a time. Team members are encouraged to suggest improvements in manufacturing work methods and processes as well as product quality. When a team was asked to make a test run on a prototype of a new handbag, team members discovered that decorative studs were causing the bag’s zipper to bunch up. The team alerted managers, who had technicians move the studs away from the zipper, which solved the problem. cross-functional teams Employees from about the same hierarchical level, but from different work areas, who come together to accomplish a task.

that when team members perceived that economic rewards such as pay were dependent on input from their teammates, performance improved for both individuals and the team as a whole.10 Finally, although individuals on teams report higher levels of job satisfaction than other individuals, they also sometimes have higher absenteeism and turnover rates. One large-scale study of labour productivity in British establishments found that although using teams in general does improve labour productivity, no evidence supported the claim that self-managed teams performed better than traditional teams with less decision-making authority.11 Thus, it appears that for self-managing teams to be advantageous, a number of situational factors must be in place.

Cross-functional teams

Starbucks created a team of individuals from production, global PR, global communications and US marketing to develop its Via brand of instant coffee. The team’s suggestions resulted in a product that would be cost-effective to produce and distribute and that was marketed with a tightly integrated, multifaceted strategy.12 This example illustrates the use of cross-functional teams, made up of employees from about the same hierarchical level but different work areas, who come together to accomplish a task. Many organizations have used horizontal, boundary-spanning groups for decades. For example, IBM created a large task force in the 1960s – made up of employees from across departments in the company – to develop its highly successful System 360. Today cross-­ functional teams are so widely used that it is hard to imagine a major organizational initiative without one. For instance, all the major automobile manufacturers – including Toyota, General Motors, Volkswagen, BMW and Ford – currently use this form of team to coordinate complex projects. Cisco relies on specific cross-functional teams to identify and capitalize on new trends in several areas of the software market. Cisco’s teams are the equivalent of social-networking groups that collaborate in real time to identify new business opportunities in the field and then implement them from the bottom up.13 Cross-functional teams are an effective means for allowing people from diverse areas within an organization (or even between organizations) to exchange information, develop new ideas and solve problems, and coordinate complex projects. Of course, cross-functional teams are no picnic to manage. Their early stages of development are often very time-consuming, as members learn to work with diversity and complexity. It takes time to build trust and teamwork, especially among people from varying backgrounds with different experiences and perspectives.

Virtual teams virtual teams Teams that use computer technology to tie together physically dispersed members in order to achieve a common goal.

The previously described types of teams do their work face-to-face. Virtual teams use computer technology to tie together physically dispersed members in order to achieve a common goal.14 They allow people to collaborate online – using communication links such as wide-area networks, videoconferencing or email – whether they’re only a room away or continents apart. Virtual teams are so pervasive, and technology has advanced so far, that it’s probably a bit of a misnomer to call these teams ‘virtual’. Nearly all teams today do at least some of their work remotely.

278  10 Understanding work teams

Despite becoming more widespread, virtual teams face special challenges. They may suffer because there is less social rapport and direct interaction among members, leaving some feeling isolated. One study showed that team leaders can reduce feelings of isolation, however, by communicating frequently and consistently with team members so none feel unfairly disfavoured.15 In addition, evidence from 94 studies entailing more than 5,000 groups found that virtual teams are better at sharing unique information (information held by individual members but not the entire group), but they tend to share less information overall.16 As a result, low levels of virtuality in teams results in higher levels of information sharing, but high levels of virtuality hinder it. For virtual teams to be effective, management should ensure that (1) trust is established among members (one inflammatory remark in an email can severely undermine team trust), (2) team progress is monitored closely (so the team doesn’t lose sight of its goals and no team member ‘disappears’), and (3) the efforts and products of the team are publicized throughout the organization (so the team does not become ­invisible).17

Multiteam systems

multiteam system A collection of two or more interdependent teams that share a superordinate goal; a team of teams.

The types of teams we’ve described so far are typically smaller, standalone teams, though their activities relate to the broader objectives of the organization. As tasks become more complex, teams are often made bigger. However, increases in team size are accompanied by higher coordination demands, creating a tipping point at which the addition of another member does more harm than good. To solve this problem, organizations are employing multiteam systems, collections of two or more interdependent teams that share a superordinate goal. In other words, multiteam systems are a ‘team of teams’.18 To picture a multiteam system, imagine the coordination of response needed after a major car accident. There is the emergency medical services team, which responds first and transports the injured to the hospital. An emergency room team then takes over, providing medical care, followed by a recovery team. Although the emergency services team, the emergency room team and the recovery team are technically independent, their activities are interdependent, and the success of one depends on the success of the others. Why? Because they all share the higher goal of saving lives. Some factors that make smaller, more traditional teams effective do not necessarily apply to multiteam systems and can even hinder their performance. One study showed that multiteam systems performed better when they had ‘boundary spanners’ whose job was to coordinate with members of the other subteams. This reduced the need for some team member communication. Restricting the lines of communication was helpful because it reduced coordination demands.19 Research on smaller, standalone teams tends to find that opening up all lines of communication is better for coordination, but when it comes to multiteam systems, the same rules do not always apply.

Creating effective teams 4  Identify the characteristics of effective teams.

Many have tried to identify factors related to team effectiveness.20 To help, some studies have organized what was once a ‘veritable laundry list of characteristics’21 into a relatively focused model.22 Figure 10.3 summarizes what we currently know about what makes teams effective. As you’ll see, it builds on many of the group concepts introduced in Chapter 9. In considering the team effectiveness model, keep in mind two points. First, teams differ in form and structure. The model attempts to generalize across all varieties of teams, but avoids rigidly applying its predictions to all teams.23 Use it as a guide. Second, the model assumes

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Context • Adequate resources • Leadership and structure • Climate of trust • Performance evaluation and reward systems Composition • Abilities of members • Personality • Allocating roles • Diversity • Size of teams • Member flexibility • Member preferences

Team effectiveness

Process • Common purpose • Specific goals • Team efficacy • Conflict levels • Social loafing

Figure 10.3  Team effectiveness model

OB IN THE NEWS

Teamwork gives us added personbyte by Tim Harford Is economic life getting more complicated? In some ways, no. It’s much easier to use a computer than it used to be, or to make an international phone call, or to buy avocados. But, in many ways, complexity is on the rise. This is true for products. When once we used to buy simple chunks of matter, such as copper, tin or wheat, now we buy smart watches, movie downloads and ready meals – these are things whose structure is a vital part of their value. You can melt and cool copper, or scatter and then rebuild a pile of wheat, and no great harm will come to either. Put your phone into a blender and you’ll find it has changed in ways that matter a great deal. Scientific ideas are also becoming more complex. Benjamin F Jones, an economist, has used large databases of academic articles and patents to show that researchers and inventors are getting older and have narrower specialisations. This seems to be because there is much more science to be known, and scientists must

devote more time to mastering what is already known before they can contribute original research. César Hidalgo, a physicist at Massachusetts Institute of Technology and author of Why Information Grows, coins the word ‘personbyte’ to describe the amount of knowledge that one person can reasonably know. The personbyte isn’t getting any smaller but – relative to the knowledge that needs to be mustered to produce a modern scientific paper, or a computer, or a car – the personbyte looks ever more inadequate. The way to escape the constraint of the personbyte is to work in larger teams, and this is exactly what Jones finds in academic and patent databases: research teams are bigger than they were 40 years ago. This is a natural consequence of the fact that a personbyte isn’t big enough to process the knowledge required for modern science or engineering. One person cannot hold all the necessary know-how in her head, so she must work together with others.

Source: Harford, T. (2015) Teamwork gives us added personbyte, FT.com, 19 June. © The Financial Times Limited. All Rights Reserved.

280  10 Understanding work teams

teamwork is preferable to individual work. Creating ‘effective’ teams when individuals can do the job better is like perfectly solving the wrong problem. We can organize the key components of effective teams into three general categories. First are the resources and other contextual influences that make teams effective. The second relates to the team’s composition. Finally, process variables are events within the team that influence effectiveness. What does team effectiveness mean in this model? Typically, it has included objective measures of the team’s productivity, managers’ ratings of the team’s performance, and aggregate measures of member satisfaction.

Context: what factors determine whether teams are successful The four contextual factors that appear to be most significantly related to team performance are the presence of adequate resources, effective leadership, a climate of trust and a performance evaluation and reward system that reflects team contributions.

Adequate resources Teams are part of a larger organization system. As such, every work team relies on resources outside the group to sustain it. A scarcity of resources directly reduces the ability of a team to perform its job effectively and achieve its goals. As one set of researchers concluded, after looking at 13 factors potentially related to group performance, ‘perhaps one of the most important characteristics of an effective work group is the support the group receives from the organization’.24 This support includes timely information, proper equipment, adequate staffing, encouragement and administrative assistance.

Leadership and structure Teams can’t function if they can’t agree on who is to do what and ensure that all members contribute equally in sharing the work load. Agreeing on the specifics of work and how they fit together to integrate individual skills requires team leadership and structure. This can be provided directly by management or by the team members themselves. Although you might

Developing team members’ trust across cultures The development of trust is critical in any work situation, but especially in multicultural teams, where differences in communication and interaction styles may lead to misunderstandings, eroding members’ trust in one another. Are there cultural differences in how much people trust others in general? Are there cultural differences in the factors people take into account when deciding how much to trust others? Researchers say ‘yes’ to both questions – for the most part. Regarding the first question, some studies have shown that overall levels of trust differ across cultures. For example, Japanese workers have been found to be more trusting of US counterparts than the other way around, but only in longlasting relationships. Chinese and US workers seem to trust each other equally. For the second question, some evidence suggests people from different cultures do pay attention to different factors when deciding whether someone is trustworthy. Risk taking appears to

glOBal

be more critical to building trust for US workers than for ­Japanese, perhaps reflecting that the United States is lower in uncertainty avoidance than Japan. Chinese appear to rely more than US employees on emotional cues such as mutual understanding, openness and social bonding, and less on cognitive cues such as reliability, professionalism and economic cooperation. When interacting with others from different cultures, whether in a formal team setting or not, it seems that what drives you to trust your colleagues may differ from what drives your colleagues to trust you, and recognizing these differences can help to facilitate higher levels of trust. Sources: Based on D. L. Ferrin and N. Gillespie, ‘Trust differences across national societal cultures: much to do, or much ado about nothing’, in M. N. K. Sanders, D. Skinner, G. Dietz, N. Gillespie and Roy J. Lewicki (eds), Organizational Trust: A Cultural Perspective (New York: Cambridge University Press, 2010), pp. 42–86; and J. Lauring and J. Selmer, ‘Openness to diversity, trust and conflict in ­multicultural organizations’, Journal of Management & Organization, November 2012, pp. 795–806.

Creating effective teams   281

think there is no role for leaders in self-managed teams, that couldn’t be further from the truth. It is true that in self-managed teams, team members absorb many of the duties t­ ypically assumed by managers. However, a manager’s job becomes managing outside (rather than inside) the team. Leadership is especially important in multiteam systems. Here, leaders need to empower teams by delegating responsibility to them, and they play the role of facilitator, making sure the teams work together rather than against one another.25 Teams that establish shared leadership by effectively delegating it are more effective than teams with a traditional single-leader structure.26

Climate of trust Members of effective teams trust each other. They also exhibit trust in their leaders.27 Interpersonal trust among team members facilitates cooperation, reduces the need to monitor each others’ behaviour, and bonds members around the belief that others on the team won’t take advantage of them. Team members, for instance, are more likely to take risks and expose vulnerabilities when they believe they can trust others on their team. Similarly, as discussed in Chapter 13, trust is the foundation of leadership. Trust in leadership is important in that it allows a team to be willing to accept and commit to its leader’s goals and decisions. But it’s not just the overall level of trust in a team that’s important. How trust is dispersed among team members also matters. Trust levels that are asymmetric and imbalanced between team members can mitigate the performance advantages of a high overall level of trust.28

Performance evaluation and reward systems How do you get team members to be both individually and jointly accountable? Individual performance evaluations and incentives may interfere with the development of high performance teams. So, in addition to evaluating and rewarding employees for their individual contributions, management should modify the traditional, individually oriented evaluation and reward system to reflect team performance and focus on hybrid systems that recognize individual members for their exceptional contributions and reward the entire group for positive outcomes.29 Group-based appraisals, profit sharing, gainsharing, small-group incentives and other system modifications can reinforce team effort and commitment.

Team composition Wavebreak Premium / Shutterstock

The team composition category includes variables that relate to how teams should be staffed – the ability and personality of team members, allocation of roles, diversity, size of the team and members’ preference for teamwork.

Abilities of members

A surgical team is an example of a team with high technical skills. The unit provides care before, during and after the surgery and is typically made up of surgeons, surgeon’s assistants, anaesthesiologists, nurses and surgical technologists. However, the team does not only need advanced degrees and significant experience. To perform effectively they must also have problem-solving and decision-making skills to make competent choices and interpersonal skills to successfully interact with other team members.

Part of a team’s performance depends on the knowledge, skills and abilities of its individual members.30 It’s true that we occasionally read about an athletic team composed of mediocre players who, because of excellent coaching, determination and precision teamwork, beats a far more talented group of players. But such cases make the news precisely because they are unusual. A team’s performance is not merely the summation of its individual members’ abilities. However, these abilities set parameters for what members can do and how effectively they will perform on a team.

282  10 Understanding work teams

Research reveals some insights into team composition and performance. First, when the task entails considerable thought (solving a complex problem such as ­reengineering an assembly line), high-ability teams – composed of mostly intelligent members – do better than lower-ability teams, especially when the workload is distributed evenly. That way, team performance does not depend on the weakest link. High-ability teams are also more adaptable to changing situations; they can more effectively apply existing k ­ nowledge to new problems. Finally, the ability of the team’s leader also matters. Smart team leaders help less-­intelligent team members when they struggle with a task. A less intelligent leader can conversely neutralize the effect of a high-ability team.31

Personality of members Personality significantly influences individual employee behaviour (as demonstrated in Chapter 4). Some dimensions identified in the Big Five personality model are relevant to team effectiveness; a review of the literature identified three.32 Specifically, teams that rate higher on mean levels of conscientiousness and openness to experience tend to perform better, and the minimum level of team member agreeableness also matters: teams did worse when they had one or more highly disagreeable members. Perhaps one bad apple can spoil the whole bunch! Research has provided us with a good idea about why these personality traits are important to teams. Conscientious people are good at backing up other team members, and they’re good at sensing when their support is truly needed. One study found that specific behavioural tendencies such as personal organization, cognitive structuring, achievement orientation and endurance were all related to higher levels of team performance.33 Open team members communicate better with one another and throw out more ideas, which makes teams composed of open people more creative and innovative.34 Suppose an organization needs to create 20 teams of four people each and has 40 highly conscientious people and 40 who score low on conscientiousness. Would the organization be better off (1) forming 10 teams of highly conscientious people and 10 teams of members low on conscientiousness, or (2) ‘seeding’ each team with two people who scored high and two who scored low on conscientiousness? Perhaps surprisingly, evidence suggests option 1 is the best choice; performance across the teams will be higher if the organization forms 10 highly conscientious teams and 10 teams low in ­conscientiousness. The reason is that a team with varying conscientiousness levels will not work to the peak performance of the highly conscientious members. Instead, a group normalization dynamic (or simple resentment) will complicate interactions and force the highly conscientious members to lower their expectations, reducing the group’s performance. In cases like this, it does appear to make sense to ‘put all of one’s eggs [conscientious team members] into one basket [into teams with other conscientious members]’.35

Allocation of roles Teams have different needs, and people should be selected for a team to ensure that all the various roles are filled. Pioneering work on team roles was carried out by Dr Meredith Belbin at Henley Management College, UK in the 1970s. He identified nine clusters of behaviour, termed team roles, each of which has its particular strengths and allowable weaknesses. Successful work teams have people to fill all these roles (on many teams, individuals will play multiple roles.) Managers can use the Belbin model to help create more balanced teams (see Figure 10.4). Teams can become unbalanced if all team members have similar team roles. If team members have similar weakness, the team as a whole may tend to have that weakness. If team members have similar strengths, they may compete for the team tasks and responsibilities that best suit their natural styles rather than collaborate.36

Creating effective teams   283

Team role

Contribution

Allowable weakness

Plant

Creative, imaginative, unorthodox. Solves difficult problems.

Ignores incidentals. Too preoccupied to communicate effectively.

Resource investigator

Extrovert, enthusiastic, communicative. Explores opportunities. Develops contacts.

Overoptimistic. Loses interest once initial enthusiasm has passed.

Coordinator

Mature, confident, a good chairperson. Clarifies goals, promotes decision-making, delegates well.

Can be seen as manipulative. Offloads personal work.

Shaper

Challenging, dynamic, thrives on pressure. The drive and courage to overcome obstacles.

Prone to provocation. Offends people’s feelings.

Monitor evaluator

Sober, strategic and discerning. Sees all options. Judges accurately.

Lacks drive and ability to inspire others.

Teamworker

Co-operative, mild, perceptive and diplomatic. Listens, builds, averts friction.

Indecisive in crunch situations.

Implementer

Disciplined, reliable, conservative and efficient. Turns ideas into practical actions.

Somewhat inflexible. Slow to respond to new possibilities.

Completer finisher

Painstaking, conscientious, anxious. Searches out errors and omissions. Delivers on time.

Inclined to worry unduly. Reluctant to delegate.

Specialist

Single-minded, self-starting, dedicated. Provides knowledge and skills in rare supply.

Contributes on only a narrow front. Dwells on technicalities.

www.belbin.com

© e-interplace, Belbin Associates, UK. 2001 This ‘BELBIN® handout’ is the property of Belbin Associates, UK and protected by copyright, database, trademark and other intellectual property rights. You must retain all copyright and other proprietary notices contained on this original and on any copy you make.You may not sell or modify this handout. The use of this handout on any other Web site is prohibited. You agree not to adapt, translate, modify, decompile, disassemble, or reverse engineer the handout. ‘BELBIN’ is a registered trademark of BELBIN ASSOCIATES, UK.

organizational demography The degree to which members of a work unit share a common demographic attribute, such as age, sex, race, educational level or length of service in an organization, and the impact of this attribute on turnover.

Figure 10.4  Key roles of teams Source: © e-interplace, Belbin Associates, UK, 2000, reproduced with permission from Belbin Associates

Diversity of members We have discussed research on the effect of diversity on groups (see Chapter 9). How does team diversity affect team performance? The degree to which members of a work unit (group, team or department) share a common demographic attribute, such as age, sex, race, educational level, or length of service in the organization is the subject of organizational ­demography. Organizational demography suggests that attributes such as age or the date of joining should help us predict turnover. The logic goes like this: turnover will be greater among

284  10 Understanding work teams

those with dissimilar experiences because communication is more difficult and conflict is more likely. Increased conflict makes membership less attractive, so employees are more likely to quit. Similarly, the losers in a power struggle are more apt to leave voluntarily or be forced out.37 Many of us hold the optimistic view that diversity should be a good thing – diverse teams should benefit from differing perspectives. Two meta-analytic reviews of the research literature show, however, that demographic diversity is essentially unrelated to team performance overall, while a third review actually suggests that race and gender diversity are negatively related to team performance.38 One qualifier is that gender and ethnic diversity have more negative effects in occupations dominated by white or male employees, but in more demographically balanced occupations, diversity is less of a problem. Diversity in function, education and expertise are positively related to group performance, but these effects are quite small and depend on the situation. Proper leadership can also improve the performance of diverse teams.39 One study of 68 teams in China found that teams diverse in terms of knowledge, skills and ways of approaching problems were more creative, but only when their leaders were transformational and inspiring.40 We have discussed research on team diversity in race or gender. But what about diversity created by national differences? Like the earlier research, evidence here indicates these elements of diversity interfere with team processes, at least in the short term.41 Cultural diversity does seem to be an asset for tasks that call for a variety of viewpoints. But culturally heterogeneous teams have more difficulty learning to work with each other and solving problems. The good news is that these difficulties seem to dissipate with time. Although newly formed culturally diverse teams underperform newly formed culturally homogeneous teams, the differences disappear after about three months.42

Size of teams Most experts agree, keeping teams small is a key to improving group effectiveness.43 Generally speaking, the most effective teams have five to nine members. Experts suggest using the smallest number of people who can do the task. Unfortunately, managers often err by making teams too large. It may require only four or five members to develop diversity of views and skills, while coordination problems can increase exponentially as team members are added. When teams have excess members, cohesiveness and mutual accountability decline, social loafing increases and people communicate less. Members of large teams have trouble coordinating with one another, especially under time pressure. When a natural working unit is larger and you want a team effort, consider breaking the group into subteams if it’s difficult to develop effective coordination processes.44

Member preferences

David Ryder/Getty Images

Not every employee is a team player. Given the option, many employees will select themselves out of team participation. When people who would prefer to work alone are required to team up, there is a direct threat to the team’s morale and to individual member satisfaction.45 This suggests that, when selecting team members, individual preferences should be considered along with abilities, personalities and skills. High-performing teams are likely to be composed of people who prefer working as part of a group. The founder and CEO of amazon.com, Jeff Bezos, has popularized the ‘two pizza’ rule which gives an insight into his thinking about group size. According to Bezos, ‘never have a meeting where two pizzas can’t feed the entire group’. In large teams members are less likely to share information, are more difficult to coordinate, are less cohesive and social loafing increases.

Team process The final category related to team effectiveness is process variables. These include member commitment to a common purpose, establishment of specific team goals, team efficacy, a managed level of conflict and minimization of social

Creating effective teams   285

‘Team members who are “hot” should make the play’ MYTH OR SCIENCE? teams’ strategies. One study of volleyball players showed that coaches and players allocate more balls to players who are believed to have the hot hand. Is this a good strategy? If the hot player’s performance is typically lower than her teammates’, then giving her more balls to hit will hurt the team because the better players aren’t getting enough chances to hit. But if the player’s performance is typically higher than that of her teammates, giving her more balls to hit will likely help the team. Considering all the research to date, however, the opening statement appears to be false.

Before we tell you whether this statement is true or false, we need to take a step back and address another question: ‘Can individuals go on “hot” streaks?’ In teams, and especially in sports, we often hear about players who are on a streak and have the ‘hot hand’, meaning they have recently been more successful than usual. For example, football player Lionel Messi has scored three goals and it’s only half time. Or golfer Rory McIlroy makes five birdies in a row for the European Ryder Cup team. Most people (around 90 per cent) believe Lionel and Rory will continue to score well because they are on a hot streak, performing even further above their normally high ­standards. Although people believe in the ‘hot hand’, the score is tied on whether it actually exists. About half the relevant studies have shown that it does, while the remaining half show it does not. But perception is often reality, so perhaps the more important question is whether belief in the hot hand affects

Sources: M. Raab, B. Gula and G. Gigerenzer, ‘The hot hand exists in volleyball and is used for allocation decisions’, Journal of Experimental Psychology: Applied, 18, 1 (2012), pp. 81–94; T Gilovich, R. Vallone and A. Tversky, ‘The hot hand in basketball: on the misperception of random sequences’, C ­ ognitive Psychology, 17 (1985), pp. 295–314; and M. Bar-Eli, S. Avugos and M. Raab, ‘Twenty years of “hot hand” research. The hot hand phenomenon: review and critique’, Psychology, Sport, and Exercise, 7 (2006), pp. 525–53.

loafing. These will be especially important in larger teams and in teams that are highly interdependent.46 Why are processes important to team effectiveness? One way to answer this question is to return to the topic of social loafing (see Chapter 9). We found that 1 + 1 + 1 doesn’t necessarily add up to 3. In team tasks for which each member’s contribution is not clearly visible, there is a tendency for individuals to decrease their effort. Social loafing, in other words, illustrates a process loss as a result of using teams. But team processes should produce positive results. That is, teams should create outputs greater than the sum of their inputs. The development of creative alternatives by a diverse group would be one such instance. Figure 10.5 illustrates how group processes can have an impact on a group’s actual effectiveness.47 Research teams are often used in research laboratories because they can draw on the diverse skills of various individuals to produce more meaningful research as a team than could be generated by all the researchers working independently – that is, they produce positive synergy and their process gains exceed their process losses.

Common plan and purpose Effective teams begin by analysing the team’s mission, developing goals to achieve that mission and creating strategies for achieving the goals. Teams that consistently perform better have established a clear sense of what needs to be done and how.48 Members of successful teams put a tremendous amount of time and effort into discussing, shaping and agreeing on a purpose that belongs to them both collectively and individually. This common purpose, when accepted by the team, becomes what GPS is to a ship captain: it provides direction and guidance under any and all conditions. Like a ship following the wrong

Potential group effectiveness

+

Process gains

Figure 10.5  Effects of group processes

-

Process losses

=

Actual group effectiveness

286  10 Understanding work teams

reflexivity A team characteristic of reflecting on and adjusting the master plan when necessary.

course, teams that don’t have good planning skills are doomed; perfectly executing the wrong plan is a lost cause.49 Teams should agree on whether their goal is to learn about and master a task or simply to perform the task; evidence suggests that different perspectives on learning versus performance goals lead to lower levels of team performance overall.50 It appears that these differences in goal orientation produce their effects by reducing discussion and sharing of information. In sum, having all employees on a team strive for the same type of goal is important. Effective teams show reflexivity, meaning they reflect on and adjust their master plan when necessary. A team has to have a good plan, but it also has to be willing and able to adapt when conditions call for it.51 Interestingly, some evidence does suggest that teams high in reflexivity are better able to adapt to conflicting plans and goals among team members.52

Specific goals Successful teams translate their common purpose into specific, measurable and realistic performance goals. Specific goals facilitate clear communication. They also help teams maintain their focus on getting results. Consistent with the research on individual goals, team goals should also be challenging. Difficult but achievable goals have been found to raise team performance on those criteria for which they’re set. So, for instance, goals for quantity tend to raise quantity, goals for speed tend to raise speed, goals for accuracy raise accuracy and so on.53

Team efficacy Effective teams have confidence in themselves; they believe they can succeed. We call this team efficacy.54 Teams that have been successful raise their beliefs about future success, which, in turn, motivates them to work harder. In addition, teams that have a shared knowledge of who knows what within the team can strengthen the link between team members’ self-efficacy and their individual creativity because members can more effectively solicit opinions and advice from their teammates.55 What can management do to increase team efficacy? Two options are helping the team achieve small successes that build confidence and providing training to improve members’ technical and interpersonal skills. The greater the abilities of team members, the more likely the team will develop confidence and the ability to deliver on that confidence.

Mental models mental models Organized mental representations of the key elements within a team’s environment that team members share.

Effective teams share accurate mental models – organized mental representations of the key elements within a team’s environment that team members share.56 If team members have the wrong mental models, which is particularly likely in teams under acute stress, their performance suffers.57 The similarity of team members’ mental models matters, too. If team members have different ideas about how to do things, the team will fight over methods rather than focus on what needs to be done.58 One review of 65 independent studies of team cognition found that teams with shared mental models engaged in more frequent interactions with one another, were more motivated, had more positive attitudes towards their work and had higher levels of objectively rated performance.59

Conflict levels Conflict on a team isn’t necessarily bad. Teams that are completely void of conflict are likely to become apathetic and stagnant (as will be discussed in more depth in Chapter 14). So conflict can actually improve team effectiveness.60 But not all types of conflict. Relationship conflicts – those based on interpersonal incompatibilities, tension and animosity towards others – are almost always dysfunctional. However, on teams performing non-routine activities, disagreements among members about task content (called task conflicts) is not detrimental. In fact, it is often beneficial because it reduces the likelihood of groupthink. Task conflicts stimulate discussion, promote critical assessment of problems and options, and can lead to better team

Turning individuals into team players   287

decisions – but not too much. High levels of task conflict can inhibit team performance.61 So effective teams can be characterized as having an appropriate level of conflict.

Social loafing As we noted earlier, individuals can engage in social loafing and coast on the group’s effort because their individual contributions can’t be identified. Effective teams undermine this tendency by holding themselves accountable at both the individual and team levels. Successful teams make members individually and jointly accountable for the team’s purpose, goals and approach.62 Therefore, members should be clear on what they are individually responsible for and what they are jointly responsible for.

Turning individuals into team players 5 Show how organizations can create team players.

To this point, we’ve made a strong case for the value and growing popularity of teams. But many people are not inherently team players. There are also many organizations that have historically nurtured individual accomplishments. Finally, countries differ in terms of how they rate on individualism and collectivism. Teams fit well with countries that score high on collectivism. But what if an organization wants to introduce teams into a work population that is made up largely of individuals born and raised in an individualistic society? A veteran employee of a large company, who had done well working in an individualistic company in an individualist country, described the experience of joining a team: ‘I’m learning my lesson. I just had my first negative performance appraisal in 20 years.’63 So what can organizations do to enhance team effectiveness – to turn individual contributors into team members? The following are the primary options managers have for trying to turn individuals into team players.

Selection: hiring team players Some people already possess the interpersonal skills to be effective team players. When hiring team members, in addition to the technical skills required to fill the job, care should be taken to ensure that candidates can fulfil their team roles as well as technical requirements.64 Many job candidates don’t have team skills. This is especially true for those socialized around individual contributions. When faced with such candidates, managers basically have three options. The candidates can undergo training to ‘make them into team players’. If this isn’t possible or doesn’t work, the other two options are to transfer the individual to another unit within the organization that does not have teams (if this possibility exists) and not to hire the candidate. In established organizations that decide to redesign jobs around teams, it should be expected that some employees will resist being team players and may be untrainable. Unfortunately, such people typically become casualties of the team approach. This directly relates to the importance of employability; the need to develop a range of work-related skills in addition to technical skills to gain and succeed in employment.

Training: creating team players Training specialists conduct exercises that allow employees to experience the satisfaction teamwork can provide. Workshops help employees improve their problem-solving, communication, negotiation, conflict-management and coaching skills. L’Oréal, for example, found that successful sales teams required much more than being staffed with high-ability salespeople: management had to focus much of its efforts on team building. ‘What we didn’t account for was that many members of our top team in sales had been promoted because they had excellent technical and executional skills,’ said L’Oréal’s senior VP of sales, David Waldock. As a result of the focus on team training, Waldock says, ‘We are no longer a team just on paper, working independently. We have a real group dynamic now, and it’s a good one.’65 Employees also learn the five-stage group development model described in Chapter 9. Developing an effective team doesn’t happen overnight – it takes time.

Blaize Pascall/Alamy Stock Photo

288  10 Understanding work teams

Many organizations use team-building activities to help create team players. While traditional exercises such as games, social events and problem-solving tasks are still used for team-building purposes; other more unusual activities can also be found. For example, raft building, dagger throwing, duck herding, blindfold driving, skydiving, sumo wrestling and even chariot racing.

Rewarding: providing incentives to be a good team player An organization’s reward system must be reworked to encourage cooperative efforts rather than competitive ones.66 Hallmark Cards Inc. added to its basic individual-incentive system an annual bonus based on achievement of team goals. Whole Foods directs most of its performance-based rewards towards team performance. As a result, teams select new members carefully so they will contribute to team effectiveness (and, thus, team bonuses).67 It is usually best to set a cooperative tone as soon as possible in the life of a team. As we already noted, teams that switch from a competitive to a cooperative system do not immediately share information, and they still tend to make rushed, poor-quality decisions.68 Apparently, the low trust typical of the competitive group will not be readily replaced by high trust with a quick change in reward systems. These problems are not seen in teams that have consistently cooperative systems.

EMPLOYABILITY AND WORK TEAMS There have been many studies carried out on the skills employers are looking for in the workplace, and team working consistently appears either at the top or close to the top of these lists. Further, even a cursory glance at almost any job description will quickly find some reference to the need to be a ‘team player’. But what about the future? Will team working still be an essential skill? One research study of 352 HR professionals sought to find out about the employee skills that will be in high demand in the future. Perhaps unsurprisingly, teamworking (particularly virtual teaming) and the ability to build relationships feature prominently. The authors of the report explain the reasons why:

‘This reflects the continued corporate shift from a command-and-control organization to a more fluid and collaborative style. As enterprises of the future respond to the development of a “networked” corporate world, where relationships with suppliers, outsourcing partners and even customers become more dispersed and nuanced, the capacity to align strategic goals, build consensus and encourage collaboration will become paramount. The challenge is made all the greater because of the vast variety of geographies and cultures that will be encompassed by tomorrow’s extended global enterprise.’ Source: Oxford Economics, Global Talent 2021: How the new geography of talent will transform human resource strategies (Oxford: Oxford Economics, 2012).

IMPLICATIONS FOR MANAGERS   289

Promotions, pay rises and other forms of recognition should be given to individuals who work effectively as team members by training new colleagues, sharing information, helping resolve team conflicts and mastering needed new skills. This doesn’t mean individual ­contributions should be ignored; rather, they should be balanced with selfless contributions to the team. Finally, don’t forget the intrinsic rewards, such as camaraderie, that employees can receive from teamwork. It’s exciting to be part of a successful team. The opportunity for personal development of self and teammates can be a very satisfying and rewarding experience.

Beware! Teams aren’t always the answer 6  Decide when to use individuals instead of teams.

Teamwork takes more time and often more resources than individual work. For instance, teams have increased communication demands, conflicts to be managed and meetings to be run. So the benefits of using teams have to exceed the costs. And that’s not always the case.69 In the excitement to enjoy the benefits of teams, some managers have introduced them into situations in which the work is better done by individuals. So before you rush to implement teams, you should carefully assess whether the work requires or will benefit from a collective effort. How do you know if the work of your group would be better done in teams? It’s been suggested that three tests be applied to see if a team fits the situation.70 First, can the work be done better by more than one person? A good indicator is the complexity of the work and the need for different perspectives. Simple tasks that don’t require diverse input are probably better left to individuals. Second, does the work create a common purpose or set of goals for the people in the group that is more than the aggregate of individual goals? For instance, many new-car dealer service departments have introduced teams that link customer-service personnel, mechanics, parts specialists and sales representatives. Such teams can better manage collective responsibility for ensuring that customer needs are properly met. The final test to assess whether teams fit the situation is to determine whether the members of the group are interdependent. Using teams makes sense when there is interdependence between tasks – when the success of the whole depends on the success of each one and the success of each one depends on the success of the others. Football, for instance, is an obvious team sport. Success requires a great deal of coordination between interdependent players. Conversely, except possibly for relays, swimming teams are not really teams. They’re groups of individuals, performing individually, whose total performance is merely the aggregate summation of their individual performances.

SUMMARY Few trends have influenced jobs as much as the massive movement to introduce teams into the workplace. The shift from working alone to working on teams requires employees to ­co-operate with others, share information, confront differences and sublimate personal interests for the greater good of the team.

IMPLICATIONS FOR MANAGERS ●

Effective teams have common characteristics. They have adequate resources, effective leadership, a climate of trust and a performance evaluation and reward system that reflects team contributions. These teams have individuals with appropriate abilities and the right traits, especially conscientiousness and openness.

290  10 Understanding work teams ●

●

●

Effective teams also tend to be small – with fewer than 10 people. They have members who fill role demands and who prefer to be part of a group. Effective teams have members who believe in the team’s capabilities and are committed to a common plan and purpose, have an accurate shared mental model of what is to be accomplished, share specific team goals, maintain a manageable level of conflict and show a minimal degree of social loafing. Because individualistic organizations and societies attract and reward individual accomplishments, it can be difficult to create team players in these environments. To make the conversion, try to select individuals who have the interpersonal skills to be effective team players, provide training to develop teamwork skills and reward individuals for cooperative efforts.

To get the most out of teams, empower them

POINT/COUNTERPOINT

POINT If you want high-performing teams with members who like each other and their jobs, I have a simple solution. Remove the leash tied to them by management and let them make their own decisions. In other words, empower them. This trend started a long time ago, when organizations realized that creating layers upon layers of bureaucracy thwarts innovation, slows progress to a trickle and merely provides hoops for people to jump through in order to get anything done. You can empower teams in two ways. One way is structurally, by transferring decision making from managers to team members and giving teams the official power to develop their own strategies. The other way is psychologically, by enhancing team members’ beliefs that they have more authority, even though legitimate authority still rests with the organization’s leaders. However, structural empowerment leads to height-

ened feelings of psychological empowerment, giving teams (and organizations) the best of both worlds. Research suggests empowered teams benefit in a number of ways. Members are more motivated. They exhibit higher levels of commitment to the team and to the organization. And they perform much better too. Empowerment sends a signal to the team that it is trusted and doesn’t have to be constantly micromanaged by upper leadership. And when teams get the freedom to make their own choices, they accept more responsibility for and take ownership of both the good and the bad. Granted, that responsibility also means empowered teams must take the initiative to foster their ongoing learning and development, but teams entrusted with the authority to guide their own destiny do just that. So, do yourself (and your company) a favour and make sure that teams, rather than needless layers of middle managers, are the ones making the decisions that count.

COUNTERPOINT Empowerment advocates cite the benefits yet neglect the harm that can be done when too much decision-making power is given to teams. They think that, to create effective teams, all you have to do as a leader is nothing because, by empowering teams, you’ve effectively stepped away as a leader and have lost your authority. Empowerment can do some good in certain circumstances, but it’s certainly not a cure-all. Yes, organizations have become flatter over the past several decades, paving the way for decision-making authority to seep into the lower levels of the organization. But consider that many teams are ‘empowered’ simply because the management ranks have been so thinned that there is no one left to make the key calls. Empowerment is then just an excuse to ask teams to take on more responsibility without an accompanying increase in tangible benefits like pay. In addition, the organization’s leadership already has a good idea of what it would like its teams (and individual employees) to accomplish. If managers leave teams to their own devices, how likely is it that those teams will always choose what the manager wanted? Even if the manager offers

suggestions about how the team might proceed, empowered teams can easily ignore that advice. Instead, they need direction on what goals to pursue and how to pursue them. That’s what effective leadership is all about. Consider what happens when decision-making authority is distributed among team members. The clarity of each team member’s role becomes fuzzy, and members lack a leader to whom they can go for advice. And finally, when teams are self-managed, they become like silos, disconnected from the rest of the organization and its mission. Simply handing people authority is no guarantee they will use it effectively. So, leave the power to make decisions in the hands of those who have worked their way up the organization. After all, they got to be leaders for a reason. Sources: S. I. Tannenbaum, J. Mathieu, E. Salas and D. Cohen, ‘Teams are changing: are research and practice evolving fast enough?’, Industrial and Organizational Psychology, 5 (2012), pp. 2–24; and R. Ashkenas, ‘How to empower your team for non-negotiable results’, Forbes, 24 April 2013, downloaded on 10 June 2013, from www.forbes.com.

ETHICAL DILEMMA   291

QUESTIONS FOR REVIEW 1. How do you explain the growing popularity of teams

in organizations? 2. What is the difference between a group and a team?

5. How can organizations create team players? 6. When is work performed by individuals preferred over

work performed by teams?

3. What are the five types of teams? 4. What conditions or context factors determine whether

teams are effective?

EXPERIENTIAL EXERCISE COMPOSING THE ‘PERFECT’ TEAM Break into teams of four to five. Assume you work for a company that redesigns existing products to improve them, from computer keyboards to bicycle helmets to toothbrushes. As a result, creativity is a key factor in whether your company succeeds in developing a product that is marketable. You need to staff a new team of five individuals and you have a pool of 20 to choose from. For each person, you have information about the following characteristics: intelligence, work experience, conscientiousness, agreeableness, neuroticism, openness to experience and extroversion. Your team is to answer the following questions: 1. If you could form your perfect team for this context,

what would it look like? In other words, what character-

istics would you choose for each of the five members – a lot of work experience or a little; high, moderate or low conscientiousness; and so on? Why? 2. How, if at all, would your choices change if the task

required teams to make quick decisions that were not necessarily the most creative? Why? 3. Each member of your group should describe his or her

ideal individual – one hypothetical person you’d most like to work with for this context (use the same criteria as in question 1). As a group, compare your responses. Does every person’s ideal individual share the same characteristics, or are there differences? If you could, would you compose a team entirely of your ideal individuals? Why or why not?

ETHICAL DILEMMA IT’S EASY TO BE UNETHICAL WHEN EVERYONE ELSE IS We often think of unethical behaviour as individual behaviour. However, in many cases, it’s a team effort. Consider the doping scandal involving Tour de France cyclist Lance Armstrong and his teammates on the US Postal Service Team. According to the US Anti-Doping Agency, Armstrong, his coaches and several of his teammates ‘ran the most sophisticated, professionalized and successful doping programme the sport has ever seen’. Five of eight riders on Armstrong’s 1999 team admitted using performance-enhancing drugs, and Armstrong himself came clean in a widely publicized interview with Oprah Winfrey. Teams in which unethical behaviour occur are often high in status. Does unethical behaviour occur only in elite teams like top management and sports? Or can it also occur in everyday work teams?

A study of 126 three-member teams of undergraduates suggests that unethical team behaviour can occur beyond top management teams. In this study, teams were given a problem on which to work, with the following instructions: You are assigned a team project in one of your finance courses. Your team waits until the last minute to begin working. To save time, a friend suggests using a similar project he has done in the past. Does your team go along with this plan? How many of the teams decided to cheat? About 37 per cent decided to use the old project. Because this exercise was hypothetical, the authors also studied team cheating in another way – by allowing teams to self-grade a ‘decoy’ assignment (an aspect of

292  10 Understanding work teams

their assignment that did not in reality exist) that they thought counted as 2 per cent of their course grade. How many teams cheated here? About one in four. This study found that team cheating was greater when a team was composed of utilitarian members (those who think the ends justify the means). However, utilitarian attitudes were more likely to translate into team cheating when team members felt interpersonally ‘safe’ – when they felt there was little risk within the team of being attacked or ridiculed for propositions or arguments they made. The upshot? It appears that in the right circumstances, all types of teams are capable of behaving unethically. By holding individual team members accountable, and by providing a climate of ‘voice’ where dissenting team members feel free to speak up, managers can discourage team unethical behaviour.

Questions 1. Why do you think Lance Armstrong’s teammates blew

the whistle? What circumstances may have contributed to doping by Lance and his teammates? 2. Do you know for certain that you would have refused to

agree to the unethical behaviour in the experiment? 3. In this study, all team members were required to sign a

response form indicating they agreed with the group decision, which was ultimately the decision to cheat. Do you think the results would change if consensus or a signature was not required? Sources: M. J. Pearsall and A. P. J. Ellis, ‘Thick as thieves: the effects of ethical orientation and psychological safety on unethical team behavior’, Journal of Applied Psychology, 96, 2 (2011), pp. 401–11; D. W. White and E. Lean, ‘The impact of perceived leader integrity on subordinates in a work team environment’, Journal of Business Ethics, 81, 4 (2008), pp. 765–78; and N. Karlinsky, ‘Lance Armstrong’s teammates say he doped’, ABC News, 10 October 2012.

Pressure to be a team player ‘Okay, I admit it. I’m not a team player. I work best when I work alone and am left alone,’ says Ciaran Murphy. Ciaran’s employer, Broad’s Furniture, a 500-employee office furniture manufacturer, recently reorganized around teams. Now all production in the company’s Dublin factory in Ireland is performed in teams and Ciaran’s design department has been broken up into three design teams. To Ciaran’s dismay, he was assigned to the modular-office design (MOD) team, which does work that Ciaran finds less interesting and challenging than other work he’s done. What’s worse, Ciaran believes that some low-performing individuals have been put in the team. Maggie Quinn, MOD’s new team leader, seems to agree with Ciaran. She told him, ‘Ciaran, listen, I know you’re not wild about the work MOD is doing, and it’s true some weaker individual contributors have been assigned to the team. But that’s why it was formed. We really think that when we work together, the strengths will be magnified and the weaknesses limited.’ Although Ciaran respects Maggie, he’s not convinced. ‘I’ve worked here for four years. I’m very good at what I do. And my performance reviews confirm that. I’ve been

Team building: sociable climbing Outdoor, mud-spattered team-building – the sort involving hiking boots, rain coats and woollen hats – remains an immovable object in the corporate world. When the Financial Management magazine asked 50 companies how they turned their workers into cohesive, tight-knit units, there was a deluge of similar responses. From web design firms to pork pie makers

CASE INCIDENT 1 rated in the highest performance category every year I’ve been here. But now everything is changing. My evaluations and pay rises are going to depend on how well the team does. And, get this, 50 per cent of my evaluation will depend on how well the team does – and this isn’t a great team. I’m really frustrated and demoralized. They hired me for my design skills. They knew I wasn’t a social type. Now they’re forcing me to be a team player. This doesn’t play to my strengths at all.’

Questions 1. Evaluate the potential positives and negatives of Broad’s restructuring around teams.

2. Is it unethical for Ciaran’s employer to force him to be a part of a team? Does this employer have any responsibility to provide Ciaran with an alternative that would allow him to continue to work independently?

3. If you were Ciaran, how would you respond? 4. What are the firm’s options’s in dealing with Ciaran?

CASE INCIDENT 2 came tales of survival weekends with the Parachute Regiment and assaults on Scafell Pike, the highest mountain in England. But why? Does trudging through mud do any good? And aren’t there any better options that boost morale and togetherness without requiring office workers to trudge, half frozen, up a mountain? Bruce Renny, founder of mobile

endnotes   293

­software group Rok, sums up the thoughts of many grumbling employees: ‘I went on a residential team-building course about six years ago with a previous company – what a fiasco. It ended up with the two teams loathing each other. Claims and counter-claims of cheating were made, people stormed off in a huff, there were injuries on the road-run and, eventually, a big fight afterwards.’ Outsourced service provider EDS is one company that’s searched high and low for something a little more civilized. Its answer? Playing with Lego. No joke. In fact, the name of this team-building exercise is Lego Serious Play and it’s endorsed by such strait-laced organizations as Deloitte, IBM and even HM Treasury. Created by two business professors at IMD business school in Lausanne, it’s now offered by dozens of consultancies across Europe and the US. The object of the exercise is to create visual representations of abstract concepts using Lego bricks. Team members might be asked to construct a 3D image of the company’s divisions or the reporting structure. When they start scratching their heads and wondering how finance relates to marketing, breakthroughs start occurring. The clients seem impressed. James Johns, of EDS’s government industry group, says: ‘I’m convinced that we covered more in that one day [of Lego Serious Play] than would have been possible in a week of workshops facilitated by more traditional means.’ But the more physically challenging teambuilding experiences have not yet been overshadowed. When the Royal National Lifeboat Institution (RNLI) wanted to introduce different teams to each other, it booked a day with Go Ape!, a provider of assault courses featuring rope ladders, Tarzan swings and zip slides high in the forest canopy. Brett Shepherd, the RNLI manager in charge of training and development, explains: ‘The “high ropes” course gets the lifeguards to interact with different teams from different beaches in a non-beach environment. Then we set them a challenge: teams of ten lifeguards have to get everyone safely around the course, plus a 70kg manikin. Including the manikin changes the focus of the task. Instead of simply going around as individuals, the lifeguards must become more interactive. The course improves their ability to work in teams and as leaders. We have nothing but positive feedback from our lifeguards about it.’ Nestlé, Nokia and Unilever are three of the many blue-chip organizations that keep coming back to Go Ape! for more. The testimony that Financial Management magazine has received from firms suggests that the traditional company teambuilding outdoor exercises aren’t quite so bad after all. One events organizer, Zibrant, measured the effects of its participation (employees, clients and suppliers of the firm were all involved) in the three-peaks challenge. This involves

scaling the highest mountains in Scotland (Ben Nevis), England (Scafell Pike) and Wales (Snowdon) on consecutive days and the firm made the following observations: ●

There was a reduction in staff turnover from 16 per cent to seven per cent (the industry standard is 22 per cent), which could be directly attributed to employee involvement in the challenge.

●

The event helped the company to develop shared values with its stakeholders.

● More

than 15 per cent of the employees who took part later asked to join the firm’s corporate social responsibility committee.

The feedback from employees was pretty encouraging, too: 97 per cent enjoyed the event and said they would take part again; 90 per cent thought that the event was very well organized; and 97 per cent were interested in participating in another charity challenge. ‘Words cannot properly describe my sheer delight at being involved in the three-peaks challenge,’ says one of the company’s climbers, Cecilia Curry. ‘The months of training beforehand were demanding and exhausting but, above all, fun. The event itself gave us excitement, fear, pride, pain and an “all in this together” feeling. The atmosphere and sense of bonding with everyone was something that I will never forget.’ The slopes of Scafell Pike won’t be falling silent just yet.

Questions 1. Do you believe that team-building activities increase productivity? Why or why not? What other factors might be responsible for increases in profitability following a corporate retreat?

2. What are some other ways besides those described here to build effective teams and increase teamwork among company employees? How might these alternatives be better or worse than those presented?

3. What should companies do about employees who lack athletic talent but are still pressured to participate in physical activities with their colleagues? How might poor performance by those with low athletic ability affect their status within the organization? Are there similar arguments to be made for those who are less cognitively able being pressured to perform the Lego activity?

4. How might you increase teamwork when team members are not often in direct contact with one another? Can you think of any ‘electronic’ team-building exercises? Source: Adapted from C. Orton-Jones (2008) ‘Sociable climbing’, Financial Management, pp. 16–19.

ENDNOTES   1 This section is based on J. R. Katzenbach and D. K. Smith, The   Wisdom of Teams (Cambridge, MA: Harvard University Press, 1993), pp. 21, 45, 85; and D. C. Kinlaw, Developing Superior Work Teams (Lexington, MA: Lexington Books, 1991), pp. 3–21.

  2 See, for instance, E. Sunstrom, K. DeMeuse and D. Futrell, ‘Work teams: applications and effectiveness’, American Psychologist, February 1990, pp. 120–33.

294  10 Understanding work teams   3 J. H. Shonk, Team-Based Organizations (Homewood, IL: Business One Irwin, 1992); and M. A. Verespej, ‘When workers get new roles’, IndustryWeek, 3 February 1992, p. 11.  4 G. Bodinson and R. Bunch, ‘AQP’s national team excellence award: its purpose, value and process’, Journal for Quality and Participation, Spring 2003, pp. 37–42.   5 See, for example, S. G. Cohen, G. E. Ledford Jr and G. M. Spreitzer, ‘A predictive model of self-managing work team effectiveness’, Human Relations, May 1996, pp. 643–76; C. E. Nicholls, H. W. Lane and M. Brehm Brechu, ‘Taking self-managed teams to Mexico’, Academy of Management Executive, August 1999, pp. 15–27; and A. Erez, J. A. LePine and H. Elms, ‘Effects of rotated leadership and peer evaluation on the functioning and effectiveness of self-managed teams: a quasi-experiment’, Personnel Psychology, Winter 2002, pp. 929–48.   6 Dobbins, T. (2002) ‘Workplace partnership “needs to evolve to next stage”’. Available at: http://www.eurofound.europa.eu/ eiro/2002/08/feature/ie0208203f.htm.   7 See, for instance, C. W. Langfred, ‘Too much of a good thing? Negative effects of high trust and individual autonomy in self-managing teams’, Academy of Management Journal, June 2004, pp. 385–99.   8 C. W. Langfred, ‘The downside of self-management: a longitudinal study of the effects of conflict on trust, autonomy, and task interdependence in self-managing teams’, Academy of Management Journal, 50, 4 (2007), pp. 885–900.   9 B. H. Bradley, B. E. Postlethwaite, A. C. Klotz, M. R. Hamdani and K. G. Brown, ‘Reaping the benefits of task conflict in teams: the critical role of team psychological safety climate’, Journal of Applied Psychology, 97, 1 (2012), pp. 151–8. 10 G. L. Stewart, S. H. Courtright and M. R. Barrick, ‘Peer-based control in self-managing teams: linking rational and normative influence with individual and group performance’, Journal of Applied Psychology, 97, 2 (2012), pp. 435–47. 11 J. Devaro, ‘The effects of self-managed and closely managed teams on labor productivity and product quality: an empirical analysis of a cross-section of establishments’, Industrial Relations, 47, 4 (2008), pp. 659–98. 12 A. Shah, ‘Starbucks strives for instant gratification with via launch’, PRWeek, December 2009, p. 15 13 B. Freyer and T. A. Stewart, ‘Cisco sees the future’, Harvard Business Review, November 2008, pp. 73–9. 14 See, for example, L. L. Martins, L. L. Gilson and M. T. Maynard, ‘Virtual teams: what do we know and where do we go from here?’, Journal of Management, November 2004, pp. 805–35; and B. Leonard, ‘Managing virtual teams’, HR Magazine, June 2011, pp. 39–42. 15 R. S. Gajendran and A. Joshi, ‘Innovation in globally distributed teams: the role of LMX, communication frequency, and member influence on team decisions’, Journal of Applied Psychology, 97, 6 (2012), pp. 1252–61. 16 J. R. Mesmer-Magnus, L. A. DeChurch, M. Jimenez-Rodriguez, J. Wildman and M. Shuffler, ‘A meta-analytic investigation of virtuality and information sharing in teams’, Organizational Behavior and Human Decision Processes, 115, 2 (2011), pp. 214–25. 17 A. Malhotra, A. Majchrzak and B. Rosen, ‘Leading virtual teams’, Academy of Management Perspectives, February 2007, pp. 60–70; and J. M. Wilson, S. S. Straus and B. McEvily, ‘All in due time: the development of trust in computer-mediated and face-to-face teams’, Organizational Behavior and Human Decision Processes, 19 (2006), pp. 16–33.

18 P. Balkundi and D. A. Harrison, ‘Ties, leaders, and time in teams: strong inference about network structure’s effects on team viability and performance’, Academy of Management Journal, 49, 1 (2006), pp. 49–68; G. Chen, B. L. Kirkman, R. Kanfer, D. Allen and B. Rosen, ‘A multilevel study of leadership, empowerment, and performance in teams’, Journal of Applied Psychology, 92, 2 (2007), pp. 331–46; L. A. DeChurch and M. A. Marks, ‘Leadership in multiteam systems’, Journal of Applied Psychology, 91, 2 (2006), pp. 311–29; A. Srivastava, K. M. Bartol and E. A. Locke, ‘Empowering leadership in management teams: effects on knowledge sharing, efficacy, and performance’, Academy of Management Journal, 49, 6 (2006), pp. 1239–51; and J. E. Mathieu, K. K. Gilson and T. M. Ruddy, ‘Empowerment and team effectiveness: an empirical test of an integrated model’, Journal of Applied Psychology, 91, 1 (2006), pp. 97–108. 19 R. B. Davison, J. R. Hollenbeck, C. M. Barnes, D. J. Sleesman and D. R. Ilgen, ‘Coordinated action in multiteam systems’, Journal of Applied Psychology, 97, 4 (2012), pp. 808–24. 20 See, for instance, J. R. Hackman, ‘The design of work teams’, in J. W. Lorsch (ed.), Handbook of Organizational Behavior (Upper Saddle River, NJ: Prentice Hall, 1987), pp. 315–42; and M. A. Campion, G. J. Medsker and C. A. Higgs, ‘Relations between work group characteristics and effectiveness: implications for designing effective work groups’, Personnel Psychology, Winter 1993, pp. 823–50. 21 D. E. Hyatt and T. M. Ruddy, ‘An examination of the relationship between work group characteristics and performance: once more into the breech’, Personnel Psychology, Autumn 1997, p. 555. 22 This model is based on M. A. Campion, E. M. Papper and G. J. Medsker, ‘Relations between work team characteristics and effectiveness: a replication and extension’, Personnel Psychology, Summer 1996, pp. 429–52; D. E. Hyatt and T. M. Ruddy, ‘An examination of the relationship between work group characteristics and performance’, pp. 553–85; S. G. Cohen and D. E. Bailey, ‘What makes teams work: group effectiveness research from the shop floor to the executive suite’, Journal of Management, 23, 3 (1997), pp. 239–90; L. Thompson, Making the Team (Upper Saddle River, NJ: Prentice-Hall, 2000), pp. 18–33; and J. R. Hackman, Leading Teams: Setting the Stage for Great Performance (Boston, MA: Harvard Business School Press, 2002). 23 See G. L. Stewart and M. R. Barrick, ‘Team structure and performance: assessing the mediating role of intrateam process and the moderating role of task type’, Academy of Management Journal, April 2000, pp. 135–48. 24 Hyatt and Ruddy, ‘An examination of the relationship between work group characteristics and performance’, p. 577. 25 P. Balkundi and D. A. Harrison, ‘Ties, leaders, and time in teams: strong inference about network structure’s effects on team viability and performance’, Academy of Management Journal, 49, 1 (2006), pp. 49–68; G. Chen, B. L. Kirkman, R. Kanfer, D. Allen and B. Rosen, ‘A multilevel study of leadership, empowerment, and performance in teams’, Journal of Applied Psychology, 92, 2 (2007), pp. 331–46; L. A. DeChurch and M. A. Marks, ‘Leadership in multiteam systems’, Journal of Applied Psychology, 91, 2 (2006), pp. 311–29; A. Srivastava, K. M. Bartol and E. A. Locke, ‘Empowering leadership in management teams: effects on knowledge sharing, efficacy, and performance’, Academy of Management Journal, 49, 6 (2006), pp. 1239–51; and J. E. Mathieu, K. K. Gilson and T. M. Ruddy, ‘Empowerment and team effectiveness: an empirical test of an integrated model’, Journal of Applied Psychology, 91, 1 (2006), pp. 97–108.

endnotes  295 26 J. B. Carson, P. E. Tesluk and J. A. Marrone, ‘Shared leadership in teams: an investigation of antecedent conditions and performance’, Academy of Management Journal, 50, 5 (2007), pp. 1217–34. 27 K. T. Dirks, ‘Trust in leadership and team performance: evidence from NCAA basketball’, Journal of Applied Psychology, December 2000, pp. 1004–12; and M. Williams, ‘In whom we trust: group membership as an affective context for trust development’, Academy of Management Review, July 2001, pp. 377–96. 28 B. A. De Jong and K. T. Dirks, ‘Beyond shared perceptions of trust and monitoring in teams: implications of asymmetry and dissensus’, Journal of Applied Psychology, 97, 2 (2012), pp. 391–406. 29 See F. Aime, C. J. Meyer and S. E. Humphrey, ‘Legitimacy of team rewards: analyzing legitimacy as a condition for the effectiveness of team incentive designs’, Journal of Business Research, 63, 1 (2010), pp. 60–6; and P. A. Bamberger and R. Levi, ‘Team-based reward allocation structures and the helping behaviors of outcome-interdependent team members’, Journal of Managerial Psychology, 24, 4 (2009), pp. 300–27; and M. J. Pearsall, M. S. Christian and A. P. J. Ellis, ‘Motivating interdependent teams: individual rewards, shared rewards, or something in between?’, Journal of Applied Psychology, 95, 1 (2010), pp. 183–91. 30 R. R. Hirschfeld, M. H. Jordan, H. S. Feild, W. F. Giles and A. A. Armenakis, ‘Becoming team players: team members’ mastery of teamwork knowledge as a predictor of team task proficiency and observed teamwork effectiveness’, Journal of Applied Psychology, 91, 2 (2006), pp. 467–74. 31 H. Moon, J. R. Hollenbeck and S. E. Humphrey, ‘Asymmetric adaptability: dynamic team structures as one-way streets’, Academy of Management Journal, 47, 5 (October 2004), pp. 681–695; A. P. J. Ellis, J. R. Hollenbeck and D. R. Ilgen, ‘Team learning: collectively connecting the dots’, Journal of Applied Psychology, 88, 5 (October 2003), pp. 821–35; C. L. Jackson and J. A. LePine, ‘Peer responses to a team’s weakest link: a test and extension of Lepine and Van Dyne’s model’, Journal of Applied Psychology, 88, 3 (June 2003), pp. 459–75; and J. A. LePine, ‘Team adaptation and postchange performance: effects of team composition in terms of members’ cognitive ability and personality’, Journal of Applied Psychology, 88, 1 (February 2003), pp. 27–39. 32 S. T. Bell, ‘Deep-level composition variables as predictors of team performance: a meta-analysis’, Journal of Applied Psychology, 92, 3 (2007), pp. 595–615; and M. R. Barrick, G. L. Stewart, M. J. Neubert and M. K. Mount, ‘Relating member ability and personality to work-team processes and team effectiveness’, Journal of Applied Psychology, June 1998, pp. 377–91. 33 T. A. O’Neill and N. J. Allen, ‘Personality and the prediction of team performance’, European Journal of Personality, 25, 1 (2011), pp. 31–42. 34 Ellis, Hollenbeck and Ilgen, ‘Team learning’; C. O. L. H. Porter, J. R. Hollenbeck and D. R. Ilgen, ‘Backing up behaviors in teams: the role of personality and legitimacy of need’, Journal of Applied Psychology, 88, 3 (June 2003), pp. 391–403; J. A. Colquitt, J. R. Hollenbeck and D. R. Ilgen, ‘Computer-assisted communication and team decision-making performance: the moderating effect of openness to experience’, Journal of Applied Psychology, 87, 2 (April 2002), pp. 402–10; J. A. LePine, J. R. Hollenbeck, D. R. Ilgen and J. Hedlund, ‘The effects of individual differences on the performance of hierarchical decision making teams: much more than G’, Journal of Applied Psychology, 82 (1997), pp. 803–11; Jackson and LePine, ‘Peer

responses to a team’s weakest link’; and Lepine, ‘Team adaptation and postchange performance’. 35 Barrick, Stewart, Neubert and Mount, ‘Relating member ability and personality to work–team processes and team effectiveness’, p. 388; and S. E. Humphrey, J. R. Hollenbeck, C. J. Meyer and D. R. Ilgen, ‘Trait configurations in self-managed teams: a conceptual examination of the use of seeding for maximizing and minimizing trait variance in teams’, Journal of Applied Psychology, 92, 3 (2007), pp. 885–92. 36 See www.Belbin.com. 37 K. Y. Williams and C. A. O’Reilly III, ‘Demography and diversity in organizations: a review of 40 years of research’, in B. M. Staw and L. L. Cummings (eds), Research in Organizational Behavior, vol. 20 (Stamford, CT: Jai Press, 1998) pp. 77–140; and A. Joshi, ‘The influence of organizational demography on the external networking behavior of teams’, Academy of Management Review, July 2006, pp. 583–95. 38 A. Joshi and H. Roh, ‘The role of context in work team diversity research: a meta-analytic review’, Academy of Management Journal, 52, 3 (2009), pp. 599–627; S. K. Horwitz and I. B. Horwitz, ‘The effects of team diversity on team outcomes: a meta-analytic review of team demography’, Journal of Management, 33, 6 (2007), pp. 987–1015; and S. T. Bell, A. J. Villado, M. A. Lukasik, L. Belau and A. L. Briggs, ‘Getting specific about demographic diversity variable and team performance relationships: a meta-analysis’, Journal of Management, 37, 3 (2011), pp. 709–43. 39 S. J. Shin and J. Zhou, ‘When is educational specialization heterogeneity related to creativity in research and development teams? Transformational leadership as a moderator’, Journal of Applied Psychology, 92, 6 (2007), pp. 1709–21; and K. J. Klein, A. P. Knight, J. C. Ziegert, B. C. Lim and J. L. Saltz, ‘When team members’ values differ: the moderating role of team leadership’, Organizational Behavior and Human Decision Processes, 114, 1 (2011), pp. 25–36. 40 S. J. Shin, T. Kim, J. Lee and L. Bian, ‘Cognitive team diversity and individual team member creativity: a cross-level interaction’, Academy of Management Journal, 55, 1 (2012), pp. 197–212. 41 W. E. Watson, K. Kumar and L. K. Michaelsen, ‘Cultural diversity’s impact on interaction process and performance: comparing homogeneous and diverse task groups’, Academy of Management Journal, June 1993, pp. 590–602; P. C. Earley and E. Mosakowski, ‘Creating hybrid team cultures: an empirical test of transnational team functioning’, Academy of Management Journal, February 2000, pp. 26–49; and S. Mohammed and L. C. Angell, ‘Surface- and deep-level diversity in workgroups: examining the moderating effects of team orientation and team process on relationship conflict’, Journal of Organizational Behavior, December 2004), pp. 1015–39. 42 Watson, Kumar and Michaelsen, ‘Cultural diversity’s impact on interaction process and performance’. 43 D. Coutu, ‘Why teams don’t work’, Harvard Business Review , May 2009, pp. 99–105. The evidence in this section is described in Thompson, Making the Team, pp. 65–67. See also L. A. Curral, R. H. Forrester and J. F. Dawson, ‘It’s what you do and the way that you do it: team task, team size, and innovation-related group processes’, European Journal of Work & Organizational Psychology, 10, 2 (June 2001), pp. 187–204; R. C. Liden, S. J. Wayne and R. A. Jaworski, ‘Social loafing: a field investigation’, Journal of Management, 30, 2 (2004), pp. 285–304; and J. A. Wagner, ‘Studies of individualism–collectivism: effects on cooperation in groups’, Academy of Management Journal, 38, 1 (February 1995), pp. 152–72.

296  10 Understanding work teams 44 ‘Is your team too big? Too small? What’s the right number? Knowledge@Wharton, 14 June 14 2006, pp. 1–5; see also A. M. Carton and J. N. Cummings, ‘A theory of subgroups in work teams’, Academy of Management Review, 37, 3 (2012), pp. 441–70. 45 Hyatt and Ruddy, ‘An examination of the relationship between work group characteristics and performance’; J. D. Shaw, M. K. Duffy and E. M. Stark, ‘Interdependence and preference for group work: main and congruence effects on the satisfaction and performance of group members’, Journal of Management, 26, 2 (2000), pp. 259–79; and S. A. Kiffin-Peterson and J. L. Cordery, ‘Trust, individualism, and job characteristics of employee preference for teamwork’, International Journal of Human Resource Management, February 2003, pp. 93–116. 46 J. A. LePine, R. F. Piccolo, C. L. Jackson, J. E. Mathieu and J. R. Saul, ‘A meta-analysis of teamwork processes: tests of a multidimensional model and relationships with team effectiveness criteria’, Personnel Psychology, 61 (2008), pp. 273–307. 47 I. D. Steiner, Group Processes and Productivity (New York: Academic Press, 1972). 48 J. A. LePine, R. F. Piccolo, C. L. Jackson, J. E. Mathieu and J. R. Saul, ‘A meta-analysis of teamwork processes: tests of a multidimensional model and relationships with team effectiveness criteria’; and J. E. Mathieu and T. L. Rapp, ‘Laying the foundation for successful team performance trajectories: the roles of team charters and performance strategies’, Journal of Applied Psychology, 94, 1 (2009), pp. 90–103. 49 J. E. Mathieu and W. Schulze, ‘The influence of team knowledge and formal plans on episodic team process–performance relationships’, Academy of Management Journal, 49, 3 (2006), pp. 605–19. 50 A. N. Pieterse, D. van Knippenberg and W. P. van Ginkel, ‘Diversity in goal orientation, team reflexivity, and team performance’, Organizational Behavior and Human Decision Processes, 114, 2 (2011), pp. 153–64. 51 A. Gurtner, F. Tschan, N. K. Semmer and C. Nagele, ‘Getting groups to develop good strategies: effects of reflexivity interventions on team process, team performance, and shared mental models’, Organizational Behavior and Human Decision Processes, 102 (2007), pp. 127–42; M. C. Schippers, D. N. Den Hartog and P. L. Koopman, ‘Reflexivity in teams: a measure and correlates’, Applied Psychology: An International Review, 56, 2 (2007), pp. 189–211; and C. S. Burke, K. C. Stagl, E. Salas, L. Pierce and D. Kendall, ‘Understanding team adaptation: a conceptual analysis and model’, Journal of Applied Psychology, 91, 6 (2006), pp. 1189–207. 52 A. N. Pieterse, D. van Knippenberg and W. P. van Ginkel, ‘Diversity in goal orientation, team reflexivity, and team performance’, Organizational Behavior and Human Decision Processes, 114, 2 (2011), pp. 153–64. 53 E. Weldon and L. R. Weingart, ‘Group goals and group performance’, British Journal of Social Psychology, Spring 1993, pp. 307–34. See also R. P. DeShon, S. W. J. Kozlowski, A. M. Schmidt, K. R. Milner and D. Wiechmann, ‘A multiple-goal, multilevel model of feedback effects on the regulation of individual and team performance’, Journal of Applied Psychology, December 2004, pp. 1035–56. 54 K. Tasa, S. Taggar and G. H. Seijts, ‘The development of collective efficacy in teams: a multilevel and longitudinal perspective’, Journal of Applied Psychology, 92, 1 (2007), pp. 17–27; D. I. Jung and J. J. Sosik, ‘Group potency and collective efficacy: examining their predictive validity, level of analysis, and effects of perfor-

mance feedback on future group performance’, Group & Organization Management, September 2003, pp. 366–91; and R. R. Hirschfeld and J. B. Bernerth, ‘Mental efficacy and physical efficacy at the team level: inputs and outcomes among newly formed action teams’, Journal of Applied Psychology, 93, 6 (2008), pp. 1429–37. 55 A. W. Richter, G. Hirst, D. van Knippenberg and M. Baer, ‘Creative self-efficacy and individual creativity in team contexts: crosslevel interactions with team informational resources’, Journal of Applied Psychology, 97, 6 (2012), pp. 1282–90. 56 S. Mohammed, L. Ferzandi and K. Hamilton, ‘Metaphor no more: a 15-year review of the team mental model construct’, Journal of Management, 36, 4 (2010), pp. 876–910. 57 A. P. J. Ellis, ‘System breakdown: the role of mental models and transactive memory on the relationships between acute stress and team performance’, Academy of Management Journal, 49, 3 (2006), pp. 576–89. 58 S. W. J. Kozlowski and D. R. Ilgen, ‘Enhancing the effectiveness of work groups and teams’, Psychological Science in the Public Interest, December 2006, pp. 77–124; and B. D. Edwards, E. A. Day, W. Arthur Jr and S. T. Bell, ‘Relationships among team ability composition, team mental models, and team performance’, Journal of Applied Psychology, 91, 3 (2006), pp. 727–36. 59 L. A. DeChurch and J. R. Mesmer-Magnus, ‘The cognitive underpinnings of effective teamwork: a meta-analysis’, Journal of Applied Psychology, 95, 1 (2010), pp. 32–53. 60 K. A. Jehn, ‘A qualitative analysis of conflict types and dimensions in organizational groups’, Administrative Science Quarterly, September 1997, pp. 530–57. See also R. S. Peterson and K. J. Behfar, ‘The dynamic relationship between performance feedback, trust, and conflict in groups: a longitudinal study’, Organizational Behavior and Human Decision Processes, September– November 2003, pp. 102–12. 61 J. Farh, C. Lee and C. I. C. Farh, ‘Task conflict and team creativity: a question of how much and when’, Journal of Applied Psychology, 95, 6 (2010), pp. 1173–80. 62 K. H. Price, D. A. Harrison and J. H. Gavin, ‘Withholding inputs in team contexts: member composition, interaction processes, evaluation structure, and social loafing’, Journal of Applied Psychology, 91, 6 (2006), pp. 1375–84. 63 See, for instance, B. L. Kirkman and D. L. Shapiro, ‘The impact of cultural values on employee resistance to teams: toward a model of globalized self-managing work team effectiveness’, Academy of Management Review, July 1997, pp. 730–57; and B. L. Kirkman, C. B. Gibson and D. L. Shapiro, ‘“Exporting” teams: enhancing the implementation and effectiveness of work teams in global affiliates’, Organizational Dynamics, 30, 1 (2001), pp. 12–29. 64 G. Hertel, U. Konradt and K. Voss, ‘Competencies for virtual teamwork: development and validation of a web-based selection tool for members of distributed teams’, European Journal of Work and Organizational Psychology, 15, 4 (2006), pp. 477–504. 65 H. M. Guttman, ‘The new high-performance player’, Hollywood Reporter, 27 October 2008), www.hollywoodreporter.com. 66 C.-H. Chuang, S. Chen, and C.-W. Chuang, ‘Human resource management practices and organizational social capital: the role of industrial characteristics’, Journal of Business Research, May 2013, pp. 678–87; and L. Prusak and D. Cohen, ‘How to invest in social capital’, Harvard Business Review, June 2001, pp. 86–93.

endnotes   297 67 T. Erickson and L. Gratton, ‘What it means to work here’, BusinessWeek, 10 January 2008. 68 M. D. Johnson, J. R. Hollenbeck, S. E. Humphrey, D. R. Ilgen, D. Jundt and C. J. Meyer, ‘Cutthroat cooperation: asymmetrical adaptation to changes in team reward structures’, Academy of Management Journal, 49, 1 (2006), pp. 103–19. 69 C. E. Naquin and R. O. Tynan, ‘The team halo effect: why teams are not blamed for their failures’, Journal of Applied Psychology, April 2003, pp. 332–40.

70 E. R. Crawford and J. A. Lepine, ‘A configural theory of team processes: accounting for the structure of taskwork and teamwork’, Academy of Management Review, January 2013, pp. 32–48; and A. B. Drexler and R. Forrester, ‘Teamwork – not necessarily the answer’, HR Magazine, January 1998, pp. 55–8.

CHAPTER 11 Communication Learning objectives After studying this chapter, you should be able to: 1 Identify the main functions of communication. 2 Describe the communication process and formal and informal communication. 3 Contrast downward, upward and lateral communication. 4 Compare and contrast formal small-group networks and the grapevine. 5 Contrast oral, written and nonverbal communication. 6 Show how channel richness underlies the choice of communication channel. 7 Differentiate between automatic and controlled processing of persuasive messages. 8 Identify common barriers to effective communication. 9 Show how to overcome the potential problems in cross-cultural communication.

The problem with communication . . . is the illusion that it has been accomplished. George Bernard Shaw

COMMUNICATION: THE DIFFERENCE BETWEEN LIFE AND DEATH?

Ton Koene / Alamy Images

Can the misunderstandings of a few words literally mean the difference between life and death? They can in the airline business. Consider the following cases. History’s worst aviation disaster occurred in 1977 at foggy Tenerife in the Canary Islands. The captain of a KLM flight thought the air traffic controller had cleared him to take off. But the controller intended only to give departure instructions. Although the language spoken between the Dutch KLM captain and the Spanish controller was English, confusion was created by heavy accents and improper terminology. The KLM Boeing 747 hit a Pan Am 747 at full throttle on the runway, killing 583 people. In 1990, Colombian Avianca pilots, after several holding patterns caused by bad weather, told controllers as they neared New York Kennedy Airport that their Boeing 737 was running low on fuel. Controllers hear those words all the time, so they took no special action. While the pilots knew there was a serious problem, they failed to use a key phrase – fuel emergency – which would have obligated controllers to direct the Avianca flight ahead of all others and clear it to land as soon as possible. The people at Kennedy never understood the true nature of the pilots’ problem. The jet ran out of fuel and crashed 16 miles from Kennedy Airport. Seventy-three people died.

Bad weather and poor communication created another disaster in October 2001, this time at Milano-Linae Airport in Italy. Visibility was poor and tower controllers were not able to establish visual or radar contact with planes. Miscommunications between the controllers and pilots of an SAS commercial jet and a small Citation business jet, combined with the poor visibility, led to the two planes colliding on the runway. One-hundred-and-ten people died. More recently, even with improved communications technologies, an inquest jury criticized poor communication by staff at Coventry Airport, UK after a fatal crash between two aircraft in 2008. Communications problems have contributed, directly or indirectly, to some of the most disastrous aviation accidents in history. An analysis of past accidents reveals that common factors associated with poor communication include confusing phraseology, similar call signs, ambiguity, inference problems and a host of other linguistic issues. Examples of aviation disasters caused by communications errors are used to illustrate the variety of elements inherent in this area and most importantly, to help avoid these disasters in the future.

Source: Based on J.B. Strother, ‘Communication failures lead to airline disasters’, Professional Communication Conference, 1999.

300  11 Communication

The preceding examples illustrate the profound consequences of communication. In this chapter, we’ll analyse the power of communication and ways in which it can be made more effective.

REFLECTION How effective do you believe you are at communicating? Describe an experience when you communicated well – why was it successful? What about a time when communication didn’t go so well – what went wrong?

communication The transfer and understanding of meaning.

No individual, group or organization can exist without communication: the transfer of meaning among its members. It is only through transmitting meaning from one person to another that information and ideas can be conveyed. Communication, however, is more than merely imparting meaning. It must also be understood. In a group in which one member speaks only German and the others do not know German, the individual speaking German will not be fully understood. Therefore, communication must include both the transfer and the understanding of meaning. An idea, no matter how great, is useless until it is transmitted and understood by others. Perfect communication, if there were such a thing, would exist when a thought or an idea was transmitted so that the mental picture perceived by the receiver was exactly the same as that envisioned by the sender. Although elementary in theory, perfect communication is never achieved in practice, for reasons we shall expand on later in the chapter. First let’s review the functions communication performs and describe the communication process.

Functions of communication Communication serves four major functions within a group or organization: control, motivation, emotional expression and information.1 Communication acts to control member behaviour in several ways. Organizations have authority hierarchies and formal guidelines that employees are required to follow. For instance, when employees are required to communicate any job-related grievance to their immediate boss, to follow their job description, or to comply with company policies, communication is performing a control function. Informal communication controls behaviour too. When work groups tease or harass a member who produces too much (and makes the rest of the group look bad), they are informally communicating with, and controlling, the member’s behaviour. Communication fosters motivation by clarifying to employees what is to be done, how well they are doing, When firms begin, commonly with a small number of and how they can improve their performance. We saw this employees and one location, communication tends to operating in our review of goal-setting and reinforcement be centralised, informal and face-to-face. However, as theories in Chapter 6. The formation of specific goals, companies grow and recruit more employees and perhaps feedback on progress towards the goals, and reward of open offices around the world, this becomes inadequate. desired behaviour all stimulate motivation and require Communication demands become more intense and the need for control increases. communication.

EPA European Press Agency Photo/ Alamy Stock Photo

1  Identify the main functions of communication.

The communication process   301

For many employees, their work group is a primary source for social interaction. The communication that takes place within the group is a fundamental mechanism by which members show their frustrations and feelings of satisfaction. Communication, therefore, provides a release for the emotional expression of feelings and for fulfilment of social needs. The final function that communication performs relates to its role in facilitating decision making. It provides the information that individuals and groups need to make decisions by transmitting the data to identify and evaluate alternative choices. No one of these four functions should be seen as being more important than the others. For groups to perform effectively, they need to maintain some form of control over members, stimulate members to perform, provide a means for emotional expression and make decision choices. You can assume that almost every communication interaction that takes place in a group or an organization performs one or more of these four functions.

Multinational firms adopt English as global language strategy As companies ‘go global’ from wherever they are headquartered, they are forced to address language barriers with their overseas employees and customers. Global organiz­ ations are increasingly choosing English as their common communication language, even though more people speak Chinese worldwide than any other language. Adopters of English include Airbus (headquartered in France), Fast Retailing (Japan), Nokia (Finland), Samsung (Seoul) and SAP (Germany). A worldwide study indicated that 25 per cent of jobs require employees to interact with people in other countries, including jobs for more than half the workers in India, Singapore and Saudi Arabia. Of these jobs, two-thirds require English. ‘English has emerged as the default language for business around the world,’ concluded Darrell Bricker, CEO of Ipsos Public Affairs. One reason English is the dominant language of business and of the internet is that it is the native language in more than 60 nations, and increasingly the official secondary language elsewhere. While employees in native English-speaking countries are at a distinct advantage, so are employees in countries where English proficiency is high, such as Singapore, Malaysia, Scandinavia and the Netherlands. Employees in other nations where English proficiency is lower – such as Panama, Saudi Arabia, Thailand and Libya – are conversely disadvantaged. Establishing English is not just a matter of teaching employees the language. Change brings shock and threatens the cultural identity of some people, while others may not be able to master a new language quickly. As a result, team dynamics and performance can suffer, compliance may be unreliable, cohesiveness

glOBal

may faction, employees may stop sharing needed information, and people may terminate their employment. Careful implementation plans facilitate ‘Englishnization’, says CEO Hiroshi Mikitani of Japan’s Rakuten. OB research suggests that managers should offer employees opportunities to gain experience (such as in overseas job rotations and language immersion training specific to the industry), model positive attitudes, identify and encourage talent, market the initiative through success stories on blogs, and encourage corporate social networking with cross-national interactions. Once organizations pass the implementation phase, research indicates that a global corporate language policy helps create a positive diversity climate; an English standard may actually lead employees to learn about other cultures. And that’s good for business. As Language Magazine editor Daniel Ward observed, embracing cultures ‘will not only improve their business relationships, it will make them more fulfilling by enabling them to better understand and appreciate other cultures.’ Sources: D. Clarke, ‘English – the language of global business?’, Forbes, 26 October 2012, www.forbes.com/sites/dorieclark/2012/10/26/english-the-language-ofglobal-business/; J. Lauring and J. Selmer, ‘International language management and diversity climate in multicultural organizations’, International Business Review, April 2012, pp. 156–66; L. Louhiala-Salminen and A. Kankaaranta, ‘Language as an issue in international internal communication: English or local language? If English, what English?’, Public Relations Review, June 2012, pp. 262–9; C. Michaud, ‘English the preferred language for business: poll’, Reuters, 16 May 2012, www. reuters.com/article/2012/05/16/us-languageidUSBRE84F0OK20120516; and T. Neeley, ‘Global business speaks English: why You need a language strategy now’, Harvard Business Review, May 2012, pp. 117–24.

The communication process Before communication can take place, a purpose, expressed as a message to be conveyed, is needed. It passes between a sender and a receiver. The message is encoded (converted to a

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2  Describe the communication process and formal and informal communication. communication process The steps between a source and a receiver that result in the transfer and understanding of meaning. formal channels Communication channels established by an organization to transmit messages related to the professional activities of members. informal channels Communication channels that are created spontaneously and that emerge as responses to individual choices.

symbolic form) and passed by way of some medium (channel) to the receiver, who retranslates (decodes) the message initiated by the sender. The result is transfer of meaning from one person to another.2 Figure 11.1 depicts this communication process. The key parts of this model are: (1) the sender, (2) encoding, (3) the message, (4) the channel, (5) decoding, (6) the receiver, (7) noise and (8) feedback. The sender initiates a message by encoding a thought. The message is the actual physical product from the sender’s encoding. When we speak, the speech is the message. When we write, the writing is the message. When we gesture, the movements of our arms and the expressions on our faces are the message. The channel is the medium through which the message travels. It is selected by the sender, who must determine whether to use a formal or informal channel. Formal channels are established by the organization and transmit messages that are related to the professional activities of members. They traditionally follow the authority chain within the organization. Other forms of messages, such as personal or social, follow informal channels in the organization. These informal channels are spontaneous and emerge as a response to individual choices.3 The receiver is the object to whom the message is directed. But before the message can be received, the symbols in it must be translated into a form that can be understood by the receiver. This step is the decoding of the message. Noise represents communication barriers that distort the clarity of the message. Examples of possible noise sources include perceptual problems, information overload, semantic difficulties or cultural differences. The final link in the communication process is a feedback loop. Feedback is the check on how successful we have been in transferring our messages as originally intended. It determines whether understanding has been achieved.

Direction of communication 3  Contrast downward, Communication can flow vertically or laterally. The vertical dimension can be further divided upward and lateral into downward and upward directions.4 communication.

Downward communication Communication that flows from one level of a group or organization to a lower level is downward communication. It’s used by group leaders and managers to assign goals, provide job instructions, inform employees of policies and procedures, point out problems that need ­attention and offer feedback. When engaging in downward communication, managers must explain the reasons why a decision was made. One study found that employees were twice as likely to be committed to changes when the reasons behind them were fully explained. Although this may seem like

Sender Message to be sent

Receiver Encoding message

Channel Noise

Feedback

Figure 11.1  The communication process

Message received

Message decoding

Direction of communication   303

common sense, many managers feel they are too busy to explain things, or that explanations will open up unwanted debate. Evidence clearly indicates, though, that explanations increase employee commitment and support of decisions.5 Although managers might think that sending a message one time is enough to get through to lower-level employees, most research suggests managerial communications must be repeated several times and through a variety of different media to be truly effective.6 Another problem in downward communication is its one-way nature; generally, managers inform employees but rarely solicit their advice or opinions. Research affirms that employees will not provide input, even when conditions are favour­ able, if doing so seems against their best interests.7 A study revealed that nearly two-thirds of employees say their boss rarely or never asks their advice. The study noted, ‘Organizations are always striving for higher employee engagement, but evidence indicates they unnecessarily create fundamental mistakes. People need to be respected and listened to.’ Companies like Nokia actively listen to employees’ suggestions, a practice the company thinks is especially important to innovation.8 The best communicators are those who explain the reasons behind their downward communications, but also solicit upward communication from the employees they supervise. That leads us to the next direction: upward communication.

Upward communication Upward communication flows to a higher level in the group or organization. It’s used to provide feedback to higher-ups, inform them of progress towards goals, and relay current problems. Upward communication keeps managers aware of how employees feel about their jobs, co-workers and the organization in general. Managers also rely on upward communication for ideas on how things can be improved. However, a study of a large European health care organization highlighted a fundamental issue with the usefulness of upward communication. The research concluded that not only was upward communication mostly absent, but when it did occur it was almost always inaccurately positive. To acquire influence and secure their performance employees simply agreed with the opinions of their managers when asked for comment. It is argued that for upward communication to be effective, it needs to be critical rather than flattering.9 Given that job responsibilities of most managers and supervisors have expanded, upward communication is increasingly difficult because managers are overwhelmed and easily distracted. To engage in effective upward communication, try to communicate in headlines not paragraphs (your job is to get your boss’s attention, not to engage in a meandering discussion), support your headlines with actionable items (what you believe should happen) and prepare an agenda to make sure you use your boss’s attention well.10

Lateral communication When communication takes place among members of the same work group, members of work groups at the same level, managers at the same level, or any other horizontally equivalent personnel, we describe it as lateral communication. Lateral communication saves time and facilitates coordination. Some lateral relationships are formally sanctioned. More often, they are informally created to short-circuit the vertical hierarchy and expedite action. So from management’s viewpoint, lateral communications can be good or bad. Because strictly adhering to the formal vertical structure for all communications can be inefficient, lateral communication occurring with management’s knowledge and support can be beneficial. But it can create dysfunctional conflicts when the formal vertical channels are breached, when members go above or around their superiors to get things done, or when bosses find actions have been taken or decisions made without their knowledge.

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Organizational communication 4  Compare and contrast formal smallgroup networks and the grapevine.

In this section, we move from interpersonal communication to organizational communication. Our first focus will be to describe and distinguish formal networks and the grapevine. In the following section, we discuss technological innovations in communication.

Formal small-group networks Formal organizational networks can be very complicated. They can, for instance, include hundreds of people and a half-dozen or more hierarchical levels. To simplify our discussion, we’ve condensed these networks into three common small groups of five people each (see Figure 11.2). These three networks are the chain, wheel and all channel. Although these three networks have been extremely simplified, they allow us to describe the unique qualities of each. The chain rigidly follows the formal chain of command. This network approximates the communication channels you might find in a rigid three-level organization. The wheel relies on a central figure to act as the conduit for all of the group’s communication. It simulates the communication network you would find on a team with a strong leader. The all-channel network permits all group members to actively communicate with each other. The all-channel network is most often characterized in practice by self-managed teams, in which all group members are free to contribute and no one person takes on a leadership role. As Table 11.1 demonstrates, the effectiveness of each network depends on the dependent variable you’re concerned about. For instance, the structure of the wheel facilitates the emergence of a leader, the all-channel network is best if you are concerned with having high member satisfaction, and the chain is best if accuracy is most important. Table 11.1 leads us to the conclusion that no single network will be best for all occasions.

The grapevine grapevine An organization’s informal communication network.

The formal system is not the only communication network in a group or organization. There is also an informal one, called the grapevine.11 Although rumours and gossip transmitted through the grapevine may be informal, it’s still an important source of information for employees and job candidates. Grapevine or word-of-mouth information Chain

Wheel

All channel

Figure 11.2  Three common small-group networks Table 11.1  Small-group networks and effective criteria Networks Criterion

Chain

Wheel

All Channel

Speed

Moderate

Fast

Fast

Accuracy

High

High

Moderate

Emergence of a leader

Moderate

High

None

Member satisfaction

Moderate

Low

High

Modes of communication   305

from peers about a company has important effects on whether job applicants join an organization.12 Rumours emerge as a response to situations that are important to us, when there is ambiguity, and under conditions that arouse anxiety.13 The fact that work situations frequently contain these three elements explains why rumours flourish in organizations. The secrecy and competition that typically prevail – around the appointment of new bosses, the relocation of offices, downsizing decisions or the realignment of work assignments – encourage and sustain rumours on the grapevine. A rumour will persist until either the wants and expectations creating the uncertainty are fulfilled or the anxiety has been reduced. The grapevine is an important part of any group or organization communication network. It gives managers a feel for the morale of their organization, identifies issues employees consider important and helps tap into employee anxieties. The grapevine also serves employees’ needs: small talk creates a sense of closeness and friendship among those who share information, although research suggests it often does so at the expense of those in the ‘out’ group.14 There is also evidence that gossip is driven largely by employee social networks that managers can study to learn more about how positive and negative information is flowing through the organization.15 Thus, while the grapevine may not be sanctioned or controlled by the organ­ ization, it can be understood. Can and should management entirely eliminate rumours? No. Research indicates that even some forms of gossip provide pro-social motivation.16 What management should do, however, is minimize the negative consequences of rumours by limiting their range and impact. The following are a few practical suggestions: 1. Provide information – in the long run, the best defence against rumours is a good offence

(in other words, rumours tend to thrive in the absence of formal communication). 2. Explain actions and decisions that may appear inconsistent, unfair or secretive. 3. Refrain from shooting the messenger – rumours are a natural fact of organizational life, so

respond to them calmly, rationally and respectfully. 4. Maintain open communication channels – constantly encourage employees to come to you

with concerns, suggestions and ideas.17

Modes of communication 5  Contrast oral, written and nonverbal communication.

How do group members transfer meaning among each other? They rely on oral, written and nonverbal communication.

Oral communication The primary means of conveying messages is oral communication. Speeches, formal one-onone and group discussions and the informal rumour mill, or grapevine, are popular forms of oral communication. The advantages of oral communication are speed and feedback. A verbal message can be conveyed and a response received in a minimal amount of time. If the receiver is unsure of the message, rapid feedback allows for early detection by the sender and, hence, allows for early correction. As one professional put it, ‘Face-to-face communication on a consistent basis is still the best way to get information to and from employees.’18 The major disadvantage of oral communication surfaces whenever a message has to be passed through a number of people. The more people a message must pass through,  the greater the potential distortion. Each person interprets the message in their own way. The message’s content, when it reaches its destination, is often very different from that of the original. In an organization, where decisions and other communiqués are verbally passed up and down the authority hierarchy, there are considerable opportunities for messages to become distorted.

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Meetings Meetings can be formal or informal, include two or more people, and take place in almost any venue. Framing even our casual business interactions with others as meetings helps us stay focused on progress. Every meeting is an opportunity to ‘get stuff done’, as Badgeville CEO Kris Duggan said, and to ‘sparkle’. He noted, ‘You may be an expert in your field, but if you don’t communicate well, or if you don’t get people excited, or you’re not passionate or enthusiastic, that’s going to be a hindrance.’19 Good interpersonal communication is important for making meetings effective. Some experts recommend using humour as an ice breaker; public relations firm Peppercomm even offers stand-up comedy workshops to help businesses teach people how to use humour.20

Videoconferencing Videoconferencing permits employees and clients to conduct real-time meetings with people at different locations. Live audio and video images let us see, hear and talk with each other without being physically in the same location. Peter Quirk, a program manager with EMC Corporation, uses videoconferencing to hold monthly meetings of employees at various locations to save travel expenses and time. However, Quirk notes it’s important to stimulate questions and involve all participants in order to avoid having someone who is linked in but disengaged. Sun Microsystem’s Karen Rhode agrees special efforts must be made to engage remote participants, suggesting, ‘You can poll people, people can ask questions, you can do an engaging presentation.’21

Telephone The telephone has been around so long that we can overlook its efficiency as a mode of communication. Telephone communication offers many of the benefits of meetings, and the ringing of the phone can prompt immediate response. Phone calls can be formal meetings or informal chats, either scheduled or spontaneous. Communication by telephone is fast, effective and less ambiguous than email. However, telephone messages can be easily overlooked.

Written communication Written communication includes letters, email, instant messaging, organizational periodicals and any other method that conveys written words or symbols. We will discuss written business communication via letters, PowerPoint, email, instant messaging, text messaging, social media, blogs and others in this section.

Letters With all the technology available, why would anyone write, print and send a letter? Of all the forms of written communication, letter writing is the oldest – and the most enduring. We have scrolls of writing from thousands of years ago, yet we still put ink on paper when we want to create a lasting record. The same cannot be said of electronic writing; sometimes these communications are difficult to find later and documents may not open when computer programs change.

PowerPoint PowerPoint and other slide formats like Prezi can be an excellent mode of communication because slide-generating software combines words with visual elements to engage the reader and help explain complex ideas. PowerPoint is often used in conjunction with oral presentations, but its appeal is so intuitive that it can serve as a primary mode of communication. It is not without its detractors, however, who argue that it is too impersonal, disengaging and frequently misused.

Email The growth of email since its inception nearly 50 years ago has been spectacular, and its use is so pervasive it’s hard to imagine life without it. Recent research found there are more than 3.1 billion active email accounts worldwide, and corporate employees average 105 emails each day.22

Modes of communication   307

28%

39%

19% 14%

Reading and answering email Searching and gathering information Communicating and collaborating internally

Figure 11.3 shows the time managers and professionals spend daily on various tasks. Many managers report that they spend too much time on email. Email messages can be quickly written, edited and stored. They can be distributed to one person or thousands with the same click of a key, though some companies (such as data company Nielson) have banned the ‘reply to all’ feature.23 The cost of sending formal email messages to employees is a fraction of the cost of printing, duplicating and distributing a comparable letter or brochure.24 Email is not without cost, however. Corporations lose billions of euro’s each year from time spent in processing unnecessary email communication. Also, a recent study indicated that people focus longer on tasks and are less stressed when they are cut off from checking email.25

Instant messaging

Role-specific tasks

Figure 11.3  Allocation of time at work for managers and professionals Source: Based on M. Chui et al., ‘The social economy: unlocking value and productivity through social technologies’, McKinsey & Company, July 2012, http://www.mckinsey.com/insights/ high_tech_telecoms_internet/the_social_economy.

Like email, instant messaging (IM) is usually done via computer. It is a synchronous technology, meaning you need to be there to receive the message. In this way, IM operates like a telephone without an answering machine: if you are present when the IM comes in, you can respond in real time to engage in online typed dialogue. If you miss the incoming IM, you may be alerted when you next log on that a person tried to reach you. However, unlike the case with email, you are not then usually expected to reply.

Text messaging Text messaging (TM) is similar to instant messaging in that both are synchronous technologies, but text messaging is usually done via mobile phone and often as a real-time alternative to phone calls. The guidelines for the business use of texting are still evolving.

Social media Nowhere has communication been more transformed than in the rise of social networks like Facebook and LinkedIn, and business is taking advantage of the opportunities these social media present. Many organizations have developed their own in-house social networking applications, known as enterprise social software, and most have their own Facebook page and Twitter feeds.26 Rather than being one huge site, Facebook, with reputedly more than 1.59 billion monthly active users as of 31 December 201527 is composed of separate networks based on schools, companies or regions (according to Facebook approximately 83.6 per cent of the active users are outside the US and Canada)28. Users can send public messages to other users either by posting on their walls or through messages or chats. However, privacy remains a high concern for many Facebook users. Unlike many social media venues, LinkedIn was created as an online business network. User profiles on the site are like virtual CVs. Communication is sometimes limited to endorsements of others’ skills and establishment of business connections, though direct private communication is available and users can form and belong to groups. Twitter is a hybrid social networking service for users to post ‘micro-blog’ entries of 140 characters to their subscribers about any topic, including work. While only 4 per cent of CEOs are on Twitter, some have many followers, such as Richard Branson of Virgin Group, who has 2.5 million. As Harvard professor and former Medtronic CEO Bill George noted, ‘Can you think of a more cost-effective way of getting to your customers and employees?’29 Having many followers can be an advantage to a firm or a manager, and a huge liability when posts (tweets) are badly written or negative. If your job includes using a Twitter account, you probably can’t take the account with you if you leave the company. Editor and video blogger Noah Kravitz tried to take his 17,000 followers with him when he left PhoneDog, a company that offers mobile phone news and reviews, but the firm sued him for taking its customers. Generally, says cyberlaw

308  11 Communication

attorney Eric Menhart, ‘If working for an employer creates value under an employment agreement, that value is effectively owned by the employer.’ Kravitz’s attorney says, ‘No one has actually had a case exactly like this before,’ but there are sure to be others as Twitter’s business usage grows.30

OB IN THE NEWS

How best to protect your employees from internet trolls by Jessica Twentyman When the England Women’s football team crashed out of the World Cup in 2015, a swarm of internet trolls took to Twitter in order to direct abuse at Laura Bassett, the player whose freak own goal put paid to England’s hopes in the tournament. It was the latest in a seemingly endless stream of examples of high-profile people with a social media presence related to their work becoming targets for insults and threats, often from anonymous abusers. In view of such cases, what should employers be doing to help and support individuals deal with trolling? After all, many organizations now expect employees to maintain an active presence on social media as part of their day-to-day work. As a result, there is a clear ‘duty of care’ to be met, says Magnus Boyd, a partner at Schillings, the law firm. ‘An employee being trolled, courtesy of business-related social media activity, is no different from an employee being shouted at by a customer in-store,’ he says. ‘Employers have a duty to protect their staff and, with proper planning, they can be ready for any eventuality, even the scourge of the online troll.’ Those that fail to protect staff run some serious risks, according to Jonny Gifford, research adviser at the Chartered Institute of Personnel and

Development (CIPD): ‘Employers who knowingly put staff in the line of fire of a stressful experience without adequate support may be found to be complicit in discrimination,’ he says. Unfortunately, says Mr Gifford, trolling is an issue that is rarely given much attention by employers, even at organizations with fairly sophisticated approaches to social media. Often, he says, human resources departments are more concerned with monitoring and dealing with employees who step out of line on social media, resulting in damage to the brand’s reputation. Most advisers suggest a two-pronged approach. First, dealing with trolls needs to be part of employees’ basic training on using social media in a professional capacity. For example, showing them how to block unwanted contacts and report trolls. Second, the employer needs a firm plan of response once a report of trolling is received, says Mr Gifford. ‘If online abuse or threats are directed at employees because of their professional activity, it’s important that the employer gives practical support. For example, helping to get abusive comments taken down from the site and, if necessary, reporting threats to the police.’

Source: Adapted from Twentyman, J. (2015) How best to protect your employees from internet trolls, FT.com 14 July. © The Financial Times Limited. All Rights Reserved. Pearson Education Ltd. is responsible for providing this adaptation of the original article.

Blogs A blog (short for web log) is a website about a single person or company. Experts estimate that more than 156 million blogs now exist, many maintained by employees. And, of course, many organizations and organizational leaders have blogs that speak for the organization.

Others Flickr, Pinterest, Google1, YouTube, Wikis, Jive, Socialtext and Social Cast are just a few of the many public and industry-specific social platforms, with new ones launching daily. Some are designed for only one type of posting: YouTube accepts only videos, for instance, and Flickr only videos and images. Other sites have a particular culture, such as Pinterest’s informal posts sharing recipes or decorating tips. There is likely to soon be a social media site tailored to every type of communication.

Modes of communication   309

Communication

FACE THE FACTS

●

A 2015 Chartered Institute of Personnel and Development survey revealed that according to Human Resource professionals, the most important skill to develop during the first year in work was communication. It is also came top of the list as the most challenging skill to develop.

●

A report on employee views of social media at work found pros and cons in almost equal measure. Social media is seen to both help get the right information to the right people (49 per cent of social media users agreeing) and to lead to information overload (48 per cent).

●

Other results from this report include: 50 per cent of employees have access to social media at work; 74 per cent of employees said that their organizations have a social media policy; 29 per cent of employers have disciplined or dismissed an employee for misuse of social media in the last year; and 54 per cent of employers use social media for recruitment

Sources: CIPD, ‘Learning to work’, March 2015; CIPD, ‘Social technology, social business?’, December 2013.

EYE ACCESSING CUES

Visual remembered

Visual construct

Auditory construct

Auditory remembered

Kinesthetic

Auditory digital

Eyes straight ahead: visual

Figure 11.4  Eye accessing cues. One of the more unusual areas of investigation into nonverbal communication is eye accessing cues. A part of neuro-linguistic programming, proponents believe that the direction that a person’s eye flickers may give clues as to how a person is processing or representing a problem to themselves unconsciously. These cues then offer us information about the person. For example, if you are asked ‘What colour is your house?’ the eyes are expected to flicker up and to the left. This is called visually remembered – something you have seen before and remembered. If you are asked, ‘What will you look like in 20 years?’ the eyes are expected to flicker up and to the right. This is called visually constructed – something you have not seen before and therefore need to construct. Although only a very small part of this approach, one application is that it can indicate whether a person is being truthful. If you are asked what you did last weekend, it would be expected that your eyes would flicker towards the ‘remembered’ side and not the ‘constructed’ side (and hence making something up because you don’t want the person to know what you did!). But beware, it is only a broad indication, has its critics, and if you’re left handed, the cues in the image above are reversed.

Nonverbal communication Every time we deliver a verbal message, we also impart a nonverbal message.31 Sometimes the nonverbal component may stand alone. No discussion of communication would thus be complete without consideration of nonverbal communication – which includes body movements, the intonations or emphasis we give to words, facial expressions and the physical distance between the sender and receiver. We could argue that every body movement has meaning, and no movement is accidental (though some are unconscious). We act out our state of being with nonverbal body language. We can smile to project trustworthiness, uncross our arms to appear approachable and stand to signal authority.32 Body language can convey status, level of engagement and emotional state.33

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Table 11.2  Intonations: it’s the way you say it! Change your tone, and you change your meaning: Placement of the emphasis

What it means

Why don’t I take you to dinner tonight?

I was going to take someone else.

Why don’t I take you to dinner tonight?

Instead of the guy you were going with.

Why don’t I take you to dinner tonight?

I’m trying to find a reason why I shouldn’t take you.

Why don’t I take you to dinner tonight?

Do you have a problem with me?

Why don’t I take you to dinner tonight?

Instead of going on your own.

Why don’t I take you to dinner tonight?

Instead of lunch tomorrow.

Why don’t I take you to dinner tonight?

Not tomorrow night.

Source: Based on M. Kiely, ‘When “no” means “yes”’ , Marketing, October 1993, pp. 7–9. Reproduced in A. Huczynski and D. Buchanan, Organizational Behaviour, 4th edn (Essex, UK: Pearson Education, 2001), p. 194.

Body language adds to, and often complicates, verbal communication. A body position or movement can communicate something of the emotion behind a message, but when it is linked with spoken language, it gives fuller meaning to a sender’s message. Studies indicate that people read much more about another’s attitude and emotions from their nonverbal cues than their words. If the nonverbal cues conflict with the speaker’s verbal message, the nonverbal cues are sometimes more likely to be believed by the listener.34 If you read the minutes of a meeting, you wouldn’t grasp the impact of what was said the same way as if you had been there or could see the meeting on video. Why? There is no record of nonverbal communication. The emphasis given to words or phrases is missing. Table 11.2 illustrates how intonations can change the meaning of a message. Facial expressions also convey meaning. Facial expressions, along with intonations, can show happiness, arrogance, aggressiveness, fear, shyness and other characteristics. Physical distance also has meaning. What is considered proper spacing between people largely depends on cultural norms. A businesslike distance in some European countries feels intimate in many parts of North America. If someone stands closer to you than is considered appropriate, it may indicate aggressiveness; if farther away, it may signal disinterest or displeasure with what is being said.

Choice of communication channel 6  Show how channel richness underlies the choice of communication channel.

channel richness The amount of information that can be transmitted during a communication episode.

Why do people choose one channel of communication over another? A model of media richness helps explain channel selection among managers.35

Channel richness Research has found that channels differ in their capacity to convey information. Some are rich in that they have the ability to (1) handle multiple cues simultaneously; (2) facilitate rapid feedback; and (3) be very personal. Others are lean in that they score low on these three factors. As Figure 11.5 illustrates, face-to-face conversation scores highest in terms of channel ­richness because it provides for the maximum amount of information to be transmitted during a communication episode. That is, it offers multiple information cues (words, postures, facial expressions, gestures, intonations), immediate feedback (both verbal and nonverbal) and the personal touch of ‘being there’. Impersonal written media such as formal reports and bulletins rate lowest in richness.

Choosing communication methods The choice of channel depends on whether the message is routine. Routine messages tend to be straightforward and have minimal ambiguity; channels low in richness can carry them

Choice of communication channel   311 Formal reports, bulletins

Prerecorded speeches

Online discussion groups, groupware

Live speeches

Videoconferences

High channel richness

Low channel richness

Memos, letters

Electronic mail

Voice mail

Telephone conversations

Face-to-face conversations

Figure 11.5  Information richness of communication channels Sources: Based on R. H. Lengel and R. L. Daft, ‘The selection of communication media as an executive skill’, Academy of Management Executive, August 1988, pp. 225–32; and R. L. Daft and R. H. Lengel, ‘Organizational information requirements, media richness, and structural design’, Managerial Science, May 1996, pp. 554–72. Reproduced from R. L. Daft and R. A. Noe, Organizational Behaviour (Fort Worth, TX: Harcourt, 2001), p. 311.

efficiently. Non-routine communications are likely to be complicated and have the potential for misunderstanding. Managers can communicate them effectively only by selecting rich channels (see Figure 11.5). Often, a variety of modes of communication work best to convey important ideas. When tough times hit Manpower Business Solutions during the recent economic recession, the company elected to communicate with employees daily in a variety of media to ensure that everyone remained informed.36 Employees were given updates about the company’s plans for dealing with economic problems, including advance warning before layoffs. The company believes its strategy of using rich communication channels for non-routine information has paid off by reducing employee anxiety and increasing engagement with the organization. Channel richness is a helpful framework for choosing your mode of communication. It is not always easy to know when to choose oral rather than written communication, for instance. Experts say oral communication or ‘face time’ with co-workers, clients and upper management is key to success. However, if you seek out the CEO just to say hello, you may be remembered as an annoyance rather than a star, and signing up for every meeting on the calendar to increase your face time is counterproductive to getting the work of the organization done. Your communication choice is worth a moment’s thought: is the message you need to communicate better suited to a discussion, or a diagram? Whenever you need to gauge the receiver’s receptivity, oral communication is usually the better choice. The marketing plan for a new product, for instance, may need to be worked out with clients in person, so you can see their reactions to each idea you are proposing. Also consider the receiver’s preferred mode of communication; some individuals focus on content better over the phone than in meetings. The pace of your work environment matters too. If your manager requests a meeting with you, you may not want to ask for an exchange of emails instead. A fast-paced workplace may thrive on pop-by meetings, while a deadline-heavy team project may progress faster with scheduled Skype videoconferences. Sometimes we cannot choose between a face-to-face meeting and a telephone meeting because of distance. Other times, there is an option. Much of what we communicate face-to-face is in the delivery, so also consider your speaking skills when choosing your communication method. Research indicates that the sound of your voice is twice as important as what you are saying. A good speaking voice – clear, moderated – can be a help to your career, while loud, questioning, irritating, immature, falsetto, breathy or monotone voice tones can hinder you. If your voice is problematic, work teams can help you raise your awareness so you can make changes, or you may benefit from the help of a voice coach.37

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Written communication is generally the most reliable mode for complex and lengthy communications, and it can be the most efficient method for short messages as well, as when a two-sentence text can take the place of a 10-minute phone call. But keep in mind that written communication can be limited in its emotional expression. Choose written communication when you want the information to be tangible and verifiable. Both you and the receiver(s) will have a record of the message. People are usually forced to think more thoroughly about what they want to convey in a written message than in a spoken one, so your written communications can also be well thought out, logical and clear. But be aware that, as with oral communication, your delivery is just as important as the content. Managers report that grammar mistakes and lack of business formality is unprofessional . . . and unacceptable. ‘People get passionate about grammar’, corporate writing instructor and author Jack Appleman noted, and a recent study found that 45 per cent of employers were adding training programmes to teach grammar and communication skills. Other experts argue that the use of social media jargon and abbreviations are good for business. James Grimes, marketing vice president of software firm RescueTime, advocates his employees stay culturally relevant. He says, ‘Those who can be sincere, and still text and Twitter . . . those are the ones who are going to succeed.’ Of course, his advice might be best suited to his c­ omputer-based industry. For your professional success, know your audience when possible and use good grammar. Letters are used in business primarily for networking purposes and when signatures need to be authentic. A handwritten thank-you note is never a wrong choice for an applicant to send after an employment interview, for instance, and handwritten envelopes often are put right on the receiver’s desk unopened by administrative staff. Although electronic written c­ ommunication provides authentication by indicating the sender and date/time sent, a handwritten signature is still preferred and sometimes required for letters and contracts. Here are some issues to consider when choosing email: ●

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●

Risk of misinterpreting the message. One research team found we can accurately decode an email’s intent and tone only 50 per cent of the time, yet most of us vastly overestimate our ability to send and interpret clear messages. If you’re sending an important message, make sure you reread it for clarity first.38 Watch also for tone, even in your subject line. Subject lines should be direct and straightforward. Recent research indicated that short subject lines – fewer than 50 characters – get more clicks.39 Fallout from negative messages. When Radio Shack decided to lay off 400 employees, it drew an avalanche of scorn inside and outside the company by doing it via email. Employees need to be careful when communicating negative messages via email, too. Inappropriate or negative content could jeopardize your current job or eliminate you from consideration for a new position. Time-consuming nature. Sorting and reading emails takes a long time. Writing emails can take even longer, whether you are typing with 10 fingers on a keyboard or two thumbs on a smartphone. Most of us have trouble keeping up with our email, especially as we advance in our careers. Experts suggest the following strategies: • Don’t check email in the morning. • Check email in batches, not throughout the day. • Unsubscribe to the extra clutter of e-newsletters and product endorsements.

●

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Limited expression of emotions. Some researchers say the lack of visual and vocal cues means emotionally positive messages, like those including praise, will be seen as more emotionally neutral than the sender intended.40 Email tends to have a disinhibiting effect on people; without the recipient’s facial expression to temper their emotional expression, senders write things they’d never be comfortable saying in person. When others send flaming messages, remain calm and try not to respond in kind. Try to see the message from the other party’s point of view.41 Privacy concerns. There are many privacy issues with email.42 First, you need to be aware that your emails may be monitored. However, across Europe the legality and procedures

Choice of communication channel   313

for monitoring emails varies between countries and the interpretations can be confusing. For example, the 2006 European Union Data Retention Directive required European companies to keep detailed data about people’s email, telephone and text message use. But in 2014, the Court of Justice of the European Union declared the directive invalid because the blanket retention of data was deemed to violate fundamental rights. Another landmark case in the European Court of Human Rights awarded €3,000 in damages and €6,000 in court costs and expenses to an employee of Carmarthenshire College, based in South Wales after her email, internet and telephone communications were monitored by one of her bosses. Lynette Copland successfully took the UK government to court claiming the practice contravened European human rights laws.43 Also, you can’t always trust that the recipient of your email will keep it confidential. For these reasons, you shouldn’t write anything you wouldn’t want made public. Second, you need to exercise caution in forwarding email from your company’s email account to a personal or ‘public’ email account. These accounts often aren’t as secure as corporate accounts, so when you forward a company email to them, you may be violating your organization’s policy or unintentionally disclosing confidential data. ●

Professionalism. It is important to not let the informality of text messaging spill over into business emails. Many prefer to keep business communication relatively formal. A survey of employers revealed that 58 per cent rate grammar, spelling and punctuation as ‘very important’ in emails. Avoid jargon and slang, use formal titles, use formal email addresses for yourself, and make your message concise and well written. In general, respond to instant messages only when they are professional, and initiate them only when you know they will be welcome. Remember that the information conveyed in an IM is more public than you might want (you can’t be sure who is reading it), and that your conversation will not be stored for later reference.

There are significant gains and challenges from the introduction of text messaging in business settings. Texts are cheap to send and receive, and the willingness to be avail­ able for quick communications from clients and managers is conducive to good business. However, some users – and managers – view text messaging as intrusive and distracting. The rules of business etiquette are not yet established, resulting in offences ranging from texts at unreasonable hours to serial texting in bursts of short messages that keep receivers’ phones buzzing annoyingly. Such a continual presence can also make it hard for employees to concentrate and stay focused. A survey of managers revealed that in 86 per cent of meetings, at least some participants checked their incoming texts, and another survey revealed 20 per cent of managers report having been reprimanded for using wireless devices during meetings. Because instant messages can be intercepted easily, many organizations are concerned about the security of texting. For these reasons, it is best to severely limit personal text messages during office hours and be cautious in using texting for business purposes. You should discuss using texting for business with people before you text them for the first time, set up general availability ground rules, and take your cues about when to text from the other person. The level of informality and abbreviations we use in personal text messages is usually not advisable at work.44 For longer messages, it is better to use email; even though the receiver still might scroll through the message on a smartphone, the option of viewing – and saving – your message on a computer is preferable. On the corporate level, the returns on using social media are mixed. Some of the most spectacular gains are in the sales arena, both business-to-public and business-to-business. For instance, one sales representative for virtual-meetings company PGi landed his fastest sale ever by instantly connecting with a potential client after TweetDeck alerted him that a CEO was tweeting his frustration about web conferencing.45 Companies are also developing their own internal social networking platforms to encourage employees to collaborate and to improve training, reporting a recent 300 per cent annual increase in corporate network activity. However, the return on using social media in human resources is undetermined, especially for recruiting purposes. UPS has been tracking social media ROI, measuring click-through rates on the company website against the €7,000 cost for each Twitter and Facebook career page as

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well as social media personnel labour costs. ‘In social media,’ UPS’s director of talent acquisition Matt Lavery said, ‘the investment is more about the time and effort of your recruiting staff than it is about other dollars.’46 The choice to use a social media outlet for business use remains controversial. As a manager, you should ‘think about business issues first, and then talk about technology second’, advises Oracle director Steve Boese.47 The same is true for employees. Does the social media outlet support the organization’s and your efforts? Collaborative and learning opportunities gained through your participation in corporate social networking can be a big benefit to your career and the organization. For the organization, there are potential gains from encouraging employees to tout company products on their Facebook pages to thousands of friends, but there are liability and compensation issues to consider. Some companies have policies governing the use of social media, but many don’t. It is difficult for management to control the content employees post; even well-intentioned employees post comments that could be construed as harmful to their company’s reputation or that reveal confidential or sensitive information. Software that mines social media sites can check up on a job applicant, and the growing field of digital forensics helps investigate potential problems with current employees, but cybersleuthing can be time-consuming and expensive.48 And acting upon violations of an organization’s social media policy is tricky. Thus, if you want to use social media for business purposes as a manager, make certain you are connected with all levels of management engaged in the effort. And if you would like to mention your business in your personal social media, communicate with your organization about what you would like to do, and what you think the potential return for the company may be. Use discretion about which personal social media platforms are acceptable for business communication. Finally, make sure you know your company’s social media policies about corporate confidentiality and your company’s view on your privacy.49 As an individual, you may choose to post a blog to your own blog page, or you may choose to comment on another person’s blog. Both options are more public than you may think, and your words are easily reachable by your name via search engines like Google. If someone in the company happens to read a critical or negative blog entry or post, there is nothing to keep him or her from sharing that information with others. You could be dismissed as a result. Beware also of posting personal blog entries from work because your internet connections may be monitored. It’s important to be alert to nonverbal aspects of communication and look for nonverbal cues as well as the literal meaning of a sender’s words. You should particularly be aware of contradictions between the messages. Someone who frequently glances at her wristwatch is giving the message that she would prefer to terminate the conversation no matter what she actually says, for instance. We misinform others when we express one message verbally, such as trust, but nonverbally communicate a contradictory message that reads, ‘I don’t have confidence in you.’

Information security Security is a huge concern for nearly all organizations with private or proprietary information about clients, customers and employees. Organizations worry about the security of the electronic information they seek to protect, such as hospital patient data, the physical information they still keep in file cabinets, and the security of the information they entrust their employees with knowing, such as Apple’s need-to-know-only information sharing. The recent adoption of cloud-based electronic data storage has brought a new level of worry; 51 per cent of managers in a recent survey were considering cloud-based human resources software. Fears about cloud computing seem unwarranted, so its business use will likely increase.50 As we’ve discussed, companies may monitor employee internet use and email records, and some even use video surveillance and record phone conversations. As necessary as it may be, such practices can seem invasive to employees. An organization can relieve employee concerns by engaging them in the creation of information-security policies and giving them some control over how their personal information is used.51

Persuasive communication   315

EMPLOYABILITY AND COMMUNICATION The ability to communicate effectively is highly sought after in organizations. However, it is often difficult for a student applying for their first job to be able to demonstrate these skills to a prospective employer. But even for those already in work who can give examples of good interpersonal skills in the workplace, demonstrating examples outside of the organiz­ ation shows a more well-rounded communication ability and a drive to improve. So how can communication skills be developed and demonstrated? Here are just a few suggestions: ●

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Contribute articles or reviews to student or other publications.

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Offer to make publicity materials for a social event.

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Do your own podcasts on a topic of interest.

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Join a debating society.

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Create YouTube presentations.

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Get work experience in a customer service role.

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Volunteer for a charity in a role that has strong communication demands.

Write a regular blog on a subject of interest.

Persuasive communication 7 Differentiate between automatic and controlled processing of persuasive messages.

automatic processing A relatively superficial consideration of evidence and information making use of heuristics.

controlled processing A detailed consideration of evidence and information relying on facts, figures and logic.

We’ve discussed a number of methods for communication up to this point. Now we turn our attention to one of the functions of communication and the features that might make messages more or less persuasive to an audience.

Automatic and controlled processing To understand the process of communication, it is useful to consider two different ways that we process information.52 Think about the last time you bought a can of soda. Did you carefully research brands, or did you reach for the can that had the most appealing advertising images? If we’re honest, we’ll admit glitzy ads and catchy slogans do indeed have an influence on our choices as consumers. We often rely on automatic processing, a relatively superficial consideration of evidence and information making use of heuristics like those we discussed in Chapter 5. Automatic processing takes little time and low effort, so it makes sense to use it for processing persuasive messages related to topics you don’t care much about. The disadvantage is that it lets us be easily fooled by a variety of tricks, like a cute jingle or glamorous photo. Now consider the last time you chose a place to live. You probably did some independent research among experts who know something about the area, gathered information about prices from a variety of sources, and considered the costs and benefits of renting versus buying. Here, you’re relying on more effortful controlled processing, a detailed consideration of evidence and information relying on facts, figures and logic. Controlled processing requires effort and energy, but it’s harder to fool someone who has taken the time and effort to engage in it. So what makes someone engage in either shallow or deep processing? There are a few rules of thumb for determining what types of processing an audience will use.

Interest level One of the best predictors of whether people will use an automatic or controlled process for reacting to a persuasive message is their level of interest in it.53 Interest levels reflect the impact a decision is going to have on your life. When people are very interested in the outcome of a decision, they’re more likely to process information carefully. That’s probably why people look for so much more information when deciding about something important (like where to live) than something relatively unimportant (like which soda to drink).

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Prior knowledge People who are very well informed about a subject area are more likely to use controlled processing strategies. They have already thought through various arguments for or against a specific course of action, and therefore they won’t readily change their position unless very good, thoughtful reasons are provided. On the other hand, people who are poorly informed about a topic can change their minds more readily, even in the face of fairly superficial arguments presented without a great deal of evidence. In other words, a better-informed audience is likely to be much harder to persuade.

Personality Do you always read at least five reviews of a movie before deciding whether to see it? Perhaps you even research recent films by the same stars and director. If so, you are probably high in need for cognition, a personality trait of individuals who are most likely to be persuaded by evidence and facts.54 Those who are lower in need for cognition are more likely to use automatic processing strategies, relying on intuition and emotion to guide their evaluation of ­persuasive messages.

Message characteristics Another factor that influences whether people use an automatic or controlled processing strategy is the characteristics of the message itself. Messages provided through relatively lean communication channels, with little opportunity for users to interact with the content of the message, encourage automatic processing. Conversely, messages provided through richer communication channels tend to encourage more deliberative processing. The most important implication is to match your persuasive message to the type of processing your audience is likely to use. When the audience is not interested in a persuasive message topic, when they are poorly informed, when they are low in need for cognition, and when information is transmitted through relatively lean channels, they’ll be more likely to use automatic processing. In these cases, use messages that are more emotionally laden and associate positive images with your preferred outcome. On the other hand, when the audience is interested in a topic, when they are high in need for cognition, or when the information is transmitted through rich channels, then it is a better idea to focus on rational arguments and evidence to make your case.

Barriers to effective communication 8  Identify common barriers to effective communication.

A number of barriers can slow or distort effective communication. In this section, we highlight the most important.

Filtering filtering A sender’s manipulation of information so that it will be seen more favourably by the receiver.

Filtering refers to a sender’s purposely manipulating information so it will be seen more favour-

ably by the receiver. For example, when a manager tells his boss what he feels his boss wants to hear, he is filtering information. The major determinant of filtering is the number of levels in an organization’s structure. The more vertical levels in the organization’s hierarchy, the more opportunities there are for filtering. But you can expect some filtering to occur wherever there are status differences. Factors such as fear of conveying bad news and the desire to please one’s boss often lead employees to tell their superiors what they think those superiors want to hear, thus distorting upward communications.

Barriers to effective communication   317

Selective perception We have mentioned selective perception before in this book. It appears again here because the receivers in the communication process selectively see and hear based on their needs, motivations, experience, background and other personal characteristics. Receivers also project their interests and expectations into communications as they decode them. An employment interviewer who expects a female job applicant to put her family ahead of her career is likely to see that in female applicants, regardless of whether the applicants actually feel that way. We don’t see reality; we interpret what we see and call it reality (as we said in Chapter 5). information overload A condition in which information inflow exceeds an individual’s processing capacity.

Information overload Individuals have a finite capacity for processing data. When the information we have to work with exceeds our processing capacity, the result is information overload. We’ve seen that dealing with it has become a huge challenge for individuals and for organizations. It’s a challenge you can manage – to some degree – by following the steps outlined earlier in this chapter. What happens when individuals have more information than they can sort and use? They tend to select, ignore, pass over or forget. Or they may put off further processing until the overload situation ends. In any case, lost information and less effective communication results, making it all the more important to deal well with overload. We have already reviewed some ways of reducing the time sunk into emails. More generally, as an Intel study shows, it may make sense to connect to technology less frequently, to, in the words of one article, ‘avoid letting the drumbeat of digital missives constantly shake up and reorder to-do lists’. Lynaia Lutes, an account supervisor for a small company, was able to think much more strategically by taking a break from digital information each day. In the past, she said, ‘I basically completed an assignment’ but didn’t approach it strategically. By creating such breaks for yourself, you may be better able to prioritize, think about the big picture, and thereby be more effective.55 As information technology and immediate communication have become a more prevalent component of modern organizational life, more employees find they are never able to get offline. Some business travellers were disappointed when airlines began offering wireless ­internet connections in flight because they could no longer use their travel time as a rare opportunity to relax without a constant barrage of organizational communications. The negative impacts of these communication devices can spill over into employees’ personal lives as well. Both workers and their spouses reported the use of electronic communication technologies outside work to higher levels of work–life conflict.56 Employees must balance the need for constant communication with their own personal need for breaks from work, or they risk burnout from being on call 24 hours a day.

Emotions You may interpret the same message differently when you’re angry or distraught than when you’re happy. For example, individuals in positive moods are more confident about their opinions after reading a persuasive message, so well-designed arguments have stronger impacts on their opinions.57 People in negative moods are more likely to scrutinize messages in greater detail, whereas those in positive moods tend to accept communications at face value.58 Extreme emotions such as jubilation or depression are most likely to hinder effective communication. In such instances, we are most prone to disregard our rational and objective thinking processes and substitute emotional judgements.

Language In the current global marketplace, language has been identified as a key enabler of effective business functioning and success. Consequently, language skills are highly sought after. For example, languages such as Mandarin and Spanish help access developing markets and are particularly prized by business. Of all the European countries, language skills have been

Hongqi Zhang/Alamy Stock Photo

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particularly lamented in the UK. A recent survey by the Confederation of British Industry reported the highest degree of employer’s dissatisfaction with graduate skills was foreign languages.59 However, Britain is not alone. Language is also an issue across Europe, particularly due to the increase of language barriers because of migration from East and Central Europe after EU enlargement. Even when we’re communicating in the same language, words mean different things to different people. Age and context are two of the biggest factors that influence the language a person uses and the definitions he or she gives to words. Most of us will be aware of the influence of age on the meanings of words when talking to those of a generation In a globalized world, even very small companies can, and older than ourselves or to teenagers whose slang we may find do, compete around the world and experience language mystifying. Rick Woodward, former learning and developissues. For large companies, this challenge can be immense. ment director for toiletries maker Kimberly-Clark, provides Employing tens or even hundreds of thousands of people in many locations means significant language barriers that must an example of the importance of context. Woodward, a native of England, began work in the US, where he soon be overcome both within the firm and when dealing with outside stakeholders. found subtle language differences created communication problems at work. For example, ‘fortnight’ is not used and ‘let’s table it’ means ‘put to one side’, instead of ‘talk about it’, he says. And when people discuss ‘seniority’, it refers to length of service, rather than position in the company.60 The point is that even when people speak a common language, the use of that language is far from uniform. If we knew how each of us modified the language, communication difficulties would be minimized. The problem is that members in an organization usually don’t know how those with whom they interact have modified the language. Senders tend to assume that the words and terms they use mean the same to the receiver as they do to them. This assumption is often incorrect.

Silence It’s easy to ignore silence or lack of communication because it is defined by the absence of information. However, research suggests using silence and withholding communication are common and problematic.61 One survey found that more than 85 per cent of managers reported remaining silent about at least one issue of significant concern.62 Employee silence means managers lack information about ongoing operational problems. And silence regarding discrimination, harassment, corruption and misconduct means top management cannot take action to eliminate this behaviour. Finally, employees who are silent about important issues may also experience psychological stress. Silence is less likely where minority opinions are treated with respect, workgroup identification is high and high procedural justice prevails.63 Practically, this means managers must make sure they behave in a supportive manner when employees voice divergent opinions or concerns, and they must take these under advisement. One act of ignoring or belittling an employee for expressing concerns may well lead the employee to withhold important future communication.

Communication apprehension communication apprehension Undue tension and anxiety about oral communication, written communication, or both.

An estimated 5 to 20 per cent of the population suffers debilitating communication apprehension, or social anxiety.64 These people experience undue tension and anxiety in oral communication, written communication, or both.65 They may find it extremely difficult to talk with others face-to-face or may become extremely anxious when they have to use the phone, relying on memos or emails when a phone call would be faster and more appropriate. Oral-communication apprehensives avoid situations, such as teaching, for which oral communication is a dominant requirement.66 But almost all jobs require some oral communication. Of greater concern is evidence that high oral-communication apprehensives distort the

Cross-cultural communication   319

communication demands of their jobs in order to minimize the need for communication. Be aware that some people severely limit their oral communication and rationalize their actions by telling themselves communicating isn’t necessary for them to do their job effectively.

Lying The final barrier to effective communication is outright misrepresentation of information, or lying. People differ in their definition of a lie. For example, is deliberately withholding information about a mistake a lie, or do you have to actively deny your role in the mistake to pass the threshold? While the definition of a lie befuddles ethicists and social scientists, there is no denying the prevalence of lying. In one US diary study, the average person reported telling one to two lies per day, with some individuals telling considerably more.67 Compounded across a large organization, this is an enormous amount of deception happening every single day. Evidence shows that people are more comfortable lying over the phone than face-to-face and more comfortable lying in emails than when they have to write with pen and paper.68 Can you detect liars? The literature suggests most people are not very good at detecting deception in others.69 The problem is there are no nonverbal or verbal cues unique to lying – averting your gaze, pausing and shifting your posture can also be signals of nervousness, shyness or doubt. Most people who lie take steps to guard against being detected, so they might look a person in the eye when lying because they know that direct eye contact is (incorrectly) assumed to be a sign of truthfulness. Finally, many lies are embedded in truths; liars usually give a somewhat true account with just enough details changed to avoid detection. In sum, the frequency of lying and the difficulty in detecting liars makes this an especially strong barrier to effective communication.

‘People are good at catching liars at work’ This statement is essentially false. The core purpose of communication in the workplace may be to convey ­business-related information. However, in the workplace, we also communicate in order to manage impressions others form of us. Some of this impression management is unintentional and harmless (for example, complimenting your boss on his clothing). However, sometimes people manage impressions through outright lies, such as making up an excuse for missing work or failing to make a deadline. One of the reasons people lie – in the workplace and elsewhere – is that it works. Although most of us think we’re good at detecting a lie, research shows that most people perform no better than chance at detecting whether someone is lying or telling the truth. A recent review of 108 studies revealed that people detect lies at a rate, on average, only 4.2 per cent better than chance.

MYTH OR SCIENCE?

This study also found that people’s confidence in their judgements of whether someone was lying bore almost no relationship to their actual accuracy; we think we’re a lot better at catching people lying than we really are. What’s even more discouraging is that so-called experts – police officers, parole officers, detectives, judges and psychologists – perform no better than other people. As the authors of this review conclude, ‘People are not good detectors of deception regardless of their age, sex, confidence and experience.’ The point? Don’t believe everything you hear and don’t place too much weight on your ability to catch a liar based just on your intuition. When someone makes a claim that it’s reasonable to doubt, ask them to back it up with evidence. Source: M. G. Aamodt and H. Custer, ‘Who can best catch a liar? A meta-analysis of individual differences in detecting deception’, Forensic Examiner, Spring 2006, pp. 6–11.

Cross-cultural communication Effective communication is difficult under the best of conditions. Cross-cultural factors clearly create the potential for increased communication problems. A gesture that is well understood and acceptable in one culture can be meaningless or lewd in another.

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9  Show how to overcome the potential problems in cross-cultural communication.

Unfortunately, as business has become more global, companies’ communication approaches have not kept pace. Only 18 per cent of companies have documented strategies for communicating with employees across cultures, and only 31 per cent of companies require that corporate messages be customized for consumption in other cultures. Procter & Gamble seems to be an exception; more than half the company’s employees don’t speak English as their first language, so the company focuses on simple messages to make sure everyone knows what’s important.70

Cultural barriers Researchers have identified a number of problems related to language difficulties in cross-­ cultural communications.71 First, there are barriers caused by semantics. As we’ve noted previously, words mean different things to different people. This is particularly true for people from different national cultures. Some words, for instance, don’t translate between cultures. Understanding the word sisu will help you in communicating with people from Finland, but this word is untranslatable into English. It means something akin to ‘guts’ or ‘dogged persistence’. Similarly, the new capitalists in Russia may have difficulty communicating with their British counterparts because English terms such as efficiency, free market and regulation are not directly translatable into Russian. Second, there are barriers caused by word connotations. Words imply different things in different languages. Negotiations between Americans and Japanese executives, for instance, can be difficult because the Japanese word hai translates as ‘yes’, but its connotation is ‘yes, I’m listening’ rather than ‘yes, I agree’. Third are barriers caused by tone differences. In some cultures, language is formal, and in others, it’s informal. In some cultures, the tone changes, depending on the context: people speak differently at home, in social situations and at work. Using a personal, informal style in a situation in which a more formal style is expected can be inappropriate. Fourth are differences in tolerance for conflict and methods for resolving conflicts. Individuals from individualist cultures tend to be more comfortable with direct conflicts and will make the source of their disagreements overt. Collectivists are more likely to acknowledge conflict only implicitly and avoid emotionally charged disputes. They may attribute conflicts to the situation more than to the individuals and therefore may not require explicit apologies to repair relationships, whereas individualists prefer explicit statements accepting responsibility for conflicts and public apologies to restore relationships.

Cultural context high-context cultures Cultures that rely heavily on nonverbal and subtle situational cues in communication. low-context cultures Cultures that rely heavily on words to convey meaning in communication.

Cultures tend to differ in the degree to which context influences the meaning individuals take from communication.72 Countries such as China, Korea, Japan and Vietnam are high-­context cultures. They rely heavily on nonverbal and subtle situational cues in communicating with others. What is not said may be more significant than what is said. A person’s official status, place in society and reputation carry considerable weight in communications. In contrast, people from Europe and North America reflect their low-context cultures. They rely essentially on words to convey meaning. Body language and formal titles are secondary to spoken and written words (see Figure 11.6). What do these contextual differences mean in terms of communication? Actually, quite a lot. Communication in high-context cultures implies considerably more trust by both parties. What may appear, to an outsider, as casual and insignificant conversation is important because it reflects the desire to build a relationship and create trust. Oral agreements imply strong commitments in high-context cultures. And who you are – your age, seniority, rank in the ­organization – is highly valued and heavily influences your credibility. But in low-context cultures, enforceable contracts tend to be in writing, precisely worded and highly legalistic. Similarly, low-context cultures value directness. Managers are expected to be explicit and

Cross-cultural communication   321 High context

Chinese Korean Japanese Vietnamese Arab Greek Spanish Italian English North American Scandinavian Swiss German

precise in conveying intended meaning. It’s quite different in high-context cultures, in which managers tend to ‘make suggestions’ rather than give orders.

A cultural guide

There is much to be gained from business intercultural communications. It is safe to assume every single one of us has a different viewpoint that is culturally shaped. Because we do have differences, we have an opportunity to reach the most creative solutions possible with the help of others if we communicate effectively. According to Fred Casmir, a leading expert in intercultural communication research, we often do not communicate well with people outside of our culture because Low we tend to generalize from only knowing their cultural origin. This can be insensitive context and potentially disastrous, especially when we make assumptions based on observFigure 11.6  High- versus low- able characteristics. Many of us have a richly varied ethnic background and would context cultures be offended if someone addressed us according to what culture our physical features might favour, for instance. Also, attempts to be culturally sensitive to another person are often based on stereotypes propagated by media. These stereotypes usually do not have a correct or current relevance. Casmir noted that because there are far too many cultures for anyone to understand completely, and individuals interpret their own cultures differently, intercultural communication should be based on sensitivity and pursuit of common goals. He found the ideal condition is an ad hoc ‘third culture’ a group can form when they seek to incorporate aspects of each member’s cultural communication preferences. The norms this subculture establishes through appreciating individual differences create a common ground for effective communication. Intercultural groups that communicate effectively can be highly productive and innovative. When communicating with people from a different culture, what can you do to reduce misinterpretations? Casmir and other experts offer the following suggestions: 1. Know yourself. Recognizing your own cultural identity and biases is critical to then under-

standing the unique viewpoint of other people. 2. Foster a climate of mutual respect, fairness and democracy. Clearly establish an environ-

ment of equality and mutual concern. This will be your ‘third culture’ context for effective intercultural communication that transcends each person’s cultural norms. 3. Learn the cultural context of each person. You may find more similarities or differences to

your own frame of reference than you might expect. Be careful not to categorize them by culture of origin, however. 4. When in doubt, listen. If you speak your opinions too early, you may be more likely to

offend the other person. You will also want to listen first to better understand the other person’s intercultural language fluency and familiarity with your culture. 5. State facts, not your interpretation. Interpreting or evaluating what someone has said or

done draws more on your own culture and background than on the observed situation. If you state only facts, you will have the opportunity to benefit from the other person’s interpretation. Delay judgement until you’ve had sufficient time to observe and interpret the situation from the differing perspectives of all concerned. 6. Consider the other person’s viewpoint. Before sending a message, put yourself in the recip-

ient’s shoes. What are his or her values, experiences and frames of reference? What do you know about his or her education, upbringing and background that can give you added insight? Try to see the people in the group as they really are first, and take a collaborative problem solving approach whenever potential conflicts arise. 7. Proactively maintain the identity of the group. Like any culture, the establishment of a

common-ground ‘third culture’ for effective intercultural communication takes time and nurturing. Remind members of the group of your common goals, mutual respect and need to adapt to individual communication preferences.73

322  11 Communication

Summary You’ve probably discovered the link between communication and employee satisfaction in this chapter: the less uncertainty, the greater the satisfaction. Distortions, ambiguities and incongruities between verbal and nonverbal messages all increase uncertainty and reduce satisfaction.

IMPLICATIONS FOR MANAGERS ●

●

●

●

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Remember that your communication mode will partly determine your communication effectiveness. Obtain feedback from your employees to make certain your messages – however they are communicated – are understood. Remember that written communication creates more misunderstandings than oral communication; communicate with employees through in-person meetings when possible. Make sure you use communication strategies appropriate to your audience and the type of message you’re sending. Keep in mind communication barriers such as language and culture.

Social media presence

POINT/COUNTERPOINT

POINT Lots of people use social media: a recent Pew Research Study found that the highest percentage of adults who use social networking sites in Europe was 43 per cent in Russia and Britain with Spain close behind at 42 per cent. Business is social, and using employees’ social contacts to increase business has always been a facet of marketing. Organizations that don’t follow their employees’ social media presence are missing an opportunity to expand their business and strengthen their workforce. Employees are key representatives of their companies to the outside world. With social media, the potential scope of that influence is hugely increased, and the company can monitor and identify employees with the best endorsement potential. The Honda employee who once told 30 friends that Honda is best can now tell 300 Facebook friends and 500 Twitter followers about the latest model. Employees savvy about social media can have a substantial positive effect on the bottom line. Monitoring employees’ social media presence can also strengthen the workforce by identifying the best talent. Managers can look for potential online celebrities – frequent bloggers and Twitter users with many followers – to approach for co-branding partnerships. Scrutiny can also help employers spot problems. For example, consider the employee who is

fired one day and turns violent. A manager who had been monitoring the employee’s social media posts may have been able to detect warning signs. A human resources department monitoring employees’ social media activity may be able to identify a substance abuse problem and provide help for the employee through the company’s intervention policies. A job candidate’s social media presence provides one more input to hiring and retention decisions that many companies already take advantage of. In reality, there is no difference between the employee and the person – they are one and the same, on or off working hours. Employers that monitor social media can also identify employees who use their platforms to send out bad press or who leak proprietary information. For this reason, managers may someday be required to monitor employees’ social media postings and to act upon infringements of company policies. Many do so already. Managers should therefore develop enforceable social media policies and create a corporate infrastructure to regularly research and monitor social media activity. The potential increase in business and limit on liability is ample return for dedicating staff and work hours to building a successful monitoring programme.

EXPERIENTIAL EXERCISE   323

COUNTERPOINT There is little to be gained and much to be lost when organ­ izations follow candidates’ and employees’ presence on social media. Managers may be able to learn more about individuals through their online activity, and organizations may be able to catch some good press from employee postings, but the risk of liability for this intrusion on privacy is inescapable. Managers are ill-equipped to monitor, interpret and act upon employees’ social media postings, and few have any experience with relating the medium to business use. Managers may also easily misinterpret information they find. Few companies have training programmes for the proper use of social media; and many don’t have social media policies of any kind. Those that do are skating on thin ice because monitoring policies can conflict with privacy regulations. An employee’s online image doesn’t reveal much that is relevant to the job, certainly not enough to warrant the time and money a business would spend on monitoring. Most users view social media as a private, recreational venue, and their membership on Facebook and other sites should be regarded with the same respect as would membership in a club. In this light, monitoring employees’ social media accounts is an unethical violation of their right to privacy. Equal Employment Opportunity laws require companies to hire without respect to race, age, religion, national

origin or disability. But managers who check into candidates’ social media postings often find out more than the candidate wanted to share, and then there is no way to keep that information from affecting the hiring decision. Searching through social media can, therefore, expose a company to a costly discrimination claim. Using employees’ personal social media presence as a marketing tool through company-supportive postings is unethical from many standpoints. First, it is unethical to expect employees to expand the company’s client base through their personal contacts. Second, it is unreasonable to expect them to endorse the company after working hours. And the practice of asking employees for their social media passwords is an obvious intrusion into their personal lives. In sum, people have a right to a professional and a private image. Unless the employee is offering to ‘friend’ the company in a social media partnership, there is no question that employers should stay out of their personal business. Sources: S. F. Gale, ‘Policies must score a mutual like’, Workforce Management, August 2012; R. Huggins and S. Ward, ‘Countries with the highest percentage of adults who use social networking sites’, USA Today, 8 February 2012, p. 1A; A. L. Kavanaugh et al., ‘Social media use by government: from the routine to the critical’, Government Information Quarterly, October 2012, pp. 480–91; and S. Johnson, ‘Those Facebook posts could cost you a job’, San Jose Mercury News, 16 January 2012, www.mercurynews.com/business/ci_19754451.

QUESTIONS FOR REVIEW 1. What are the primary functions of the communication

process in organizations? 2. What are the key parts of the communication process,

and how do you distinguish formal and informal communication? 3. What are the differences among downward, upward

and lateral communication? 4. What are the differences between formal small group

6. How does channel richness underlie the choice of

communication channel? 7. What is the difference between automatic and

controlled processing of persuasive messages? 8. What are some common barriers to effective

­communication? 9. What

unique problems ­communication?

underlie

cross-cultural

networks and the grapevine? 5. What are the methods of oral communication, written

communication and nonverbal communication?

EXPERIENTIAL EXERCISE AN ABSENCE OF NONVERBAL COMMUNICATION This exercise will help you to see the value of nonverbal communication to interpersonal relations.

b. Employee turnover in an organization can be func-

1. The class is to split up into pairs (Party A and Party B).

c. Some conflict in an organization is good.

2. Party A is to select a topic from the following list:

d. Whistle-blowers do more harm than good for an

a. Managing in the Middle East is significantly

different from managing in Europe.

tional.

organization.

324  11 Communication

e. An employer has a responsibility to provide every

employee with an interesting and challenging job. f. Everyone should register to vote. g. Organizations should require all employees to

undergo regular drug tests. h. Individuals who have majored in business or

economics make better employees than those who have majored in history or English. i. The place where you get your university degree is

more important in determining your career success than what you learn while you’re there. j. It’s unethical for a manager to purposely distort

communications to get a favourable outcome. 3. Party B is to choose a position on this topic (for

example, arguing against the view that ‘some conflict in an organization is good’). Party A now must automatically take the opposite position.

4. The two parties have 10 minutes in which to debate

their topic. The catch is that the individuals can only communicate verbally. They may not use gestures, facial movements, body movements or any other nonverbal communication. It may help for each party to sit on their hands to remind them of their restrictions and to maintain an expressionless look. 5. After the debate is over, form groups of six to eight and

spend 15 minutes discussing the following: a. How effective was communication during these

debates? b. What barriers to communication existed? c. What purposes does nonverbal communication serve? d. Relate the lessons learned in this exercise to problems that might occur when communicating on the telephone or through email.

ETHICAL DILEMMA DEFINING THE BOUNDARIES OF TECHNOLOGY You work for a company that has no specific policies regarding non-work-related uses of computers and the internet. It also has no electronic monitoring devices to determine what employees are doing on their computers. Are any of the following actions unethical? Explain your position on each. a. Using the company’s email system for personal

reasons during the workday. b. Playing computer games during the workday. c. Using your office computer for personal use (e.g. to shop online) during the workday.

Communicating at Go Fly The history of the Go Fly airline (or simply Go) is hardly extensive. Formed by British Airways to compete in the low cost airline market for an investment of about €40 million, the airline flew for the first time in 1998. Four years later, Go had gone, having been bought by easyJet for close to €500 million. Although brief, the company’s success and experiences provide lessons in organizational communication. When the firm was the subject of a management buyout shortly before its sale, 19 directors and senior managers kept all 750 staff informed by ringing each employee personally. And, according to Dominic Paul, director of people development, that was the culmination of the organization’s ongoing

d. Looking for a mate on an internet dating service website during the workday. e. Visiting ‘adult’ websites on your office computer during the workday. f. Using your employer’s portable communication device for personal use. g. Conducting any of the above activities at work but before or after normal work hours. h. For telecommuters working from home, using a computer and internet access line paid for by your employer to visit online shopping or dating-service sites during normal working hours.

CASE INCIDENT 1 approach to employee communications. He explains, ‘The idea is to make sure that everyone feels involved. It’s a bit like when there’s a delay on an aircraft, as long as the pilot advises you why there is a delay and how long you’re likely to wait, you feel informed. That’s how it works with Go employees, they know what’s going on because we keep them informed.’ One of the biggest communications challenges at Go was the fact that many of its staff, such as the ground and aircraft crews, work unsociable hours. The company used a number of ways to keep these staff in the loop. There were regular forums where general management decisions were explained, an overview was given of the state of the business

CASE INCIDENT 2   325

and participants were given the opportunity to ask questions. When employees walked into reception, they had the opportunity to post questions on a whiteboard and receive an answer within the week. Go also used the latest technology to keep staff up to date with company news. ‘Go TV’ was broadcast every day on television monitors and was used to supply all sorts of useful information, from the latest share results to more lighthearted news. The company intranet allowed managers to easily post the latest sales figures, the situation regarding the management buyout and general staff gossip, including employees’ birthdays. A day away from the workplace is another less formal way of communicating company values. One of which culminated in the directors taking 670 staff out to dinner. Paul said, ‘We do like to do things informally. It fits into the style of what we do. We have a relaxed approach, and this comes through in the state of mind of our staff, whether young or more mature.’ The then chief executive of Go, Barbara Cassani, also made great efforts to keep in touch with Go employees by recording a weekly message to staff every Friday. This could be accessed via an internal number for office-based staff, with a special external number for crew. And, said Paul, ‘She’s very direct and honest with staff on what’s been happening.’

Using social media to your advantage As you know, social media have transformed the way we interact. The transparent, rapid-fire communication they make possible means people can spread information about companies more rapidly than ever. Do organizations understand yet how to use social media effectively? Perhaps not. Recent findings indicated that only three out of ten CEOs in the Fortune 500 have any presence on national social media sites. Many executives are wary of these new technologies because they cannot always control the outcomes of their communications. However, whether they are directly involved with social media or not, companies should recognize that these messages are out there, so it’s wise for them to make their voices heard. Some experts say social media tools improve productivity because they keep employees connected to their companies during non-office hours. And social media can be an important way to learn about emerging trends. André Schneider, chief operating officer of the World Economic Forum, uses feedback from LinkedIn discussion groups and Facebook friends to discover emerging trends and issues worldwide. Padmasree Warrior, chief technology officer of Cisco, has used social media to refine her presentations before a ‘test’ audience.

Paul believes that one of the greatest benefits of the company’s proactive communications strategy was in recruitment and retention. The results of a yearly survey of employees showed that 93 per cent understood what Go was trying to achieve, 81 per cent thought Go was a great place to work, and significantly, 83 per cent feel they could contribute to the company’s development. Paul claimed, ‘We are a “people business” and our employees are mainly on the front line of that, so it’s important we reflect that in how we deal internally. It really is a simple model. We care about our customers and in order to provide a good service we make sure we’ve got a happy and well-motivated workforce. It’s clear where the company is going and everyone will pull together. There is a real energy in the business.’

Questions 1. Which elements of the communication strategy at Go Fly made it successful?

2. How do these link with the topics that have been covered in this chapter?

3. Are there any improvements that you can recommend? 4. Do you think these communication practices would be useful in others firms? Why or why not? Source: Adapted from ‘Go gets to grips with communications’, Personnel Today, 1 September 2001.

CASE INCIDENT 2 The first step in developing a social media strategy is establishing a brand for your communications – define what you want your social media presence to express. Experts recommend that companies begin their social media strategy by leveraging their internal corporate networks to test their strategy in a medium that’s easier to control. Most companies already have the technology to use social media through their corporate websites. Begin by using these platforms for communicating with employees and facilitating social networks for general information sharing. As social networking expert Soumitra Dutta from Insead notes, ‘My advice is to build your audience slowly and be selective about your contacts.’ Despite the potential advantages, companies also need to be aware of significant drawbacks to social media. First, it’s very difficult to control social media communications. Microsoft found this out when the professional blogger it hired spent more time promoting himself than getting positive information out about the company. Second, important intellectual capital might leak out. Companies need to establish very clear policies and procedures to ensure that sensitive information about ongoing corporate strategies is

326  11 Communication

not disseminated via social media. Finally, managers should maintain motivation and interest beyond their initial forays into social media. A site that’s rarely updated can send a very negative message about the organization’s level of engagement with the world.

2. What features would you look for in a social media outlet?

Questions:

Sources: B. Acohido, ‘Social-media tools boost productivity’, USA Today, 13 August 2012, p. 1B; S. Dutta, ‘What’s your personal social media strategy’, Harvard Business Review, November 2010, pp. 127–30; and G. Connors, ‘10 social media commandments for employers’, Workforce Management Online, February 2010, www.workforce.com; and L. Kwoh and M. Korn, ‘140 characters of risk: CEOs on Twitter’, Wall Street Journal, 26 September 2012, pp. B1, B8.

1. Do you think organizations need to have a social media presence today? Are the drawbacks sufficient to make you think it’s better for them to avoid certain media?

What types of information would you avoid making part of your social media strategy?

3. What do you think is the future direction of social media? How might emerging technologies change them?

ENDNOTES  1 W. G. Scott and T. R. Mitchell, Organization Theory: A Structural and Behavioral Analysis (Homewood, IL: Irwin, 1976).   2 D. K. Berlo, The Process of Communication (New York: Holt, Rinehart & Winston, 1960), pp. 30–2.   3 J. Langan-Fox, ‘Communication in organizations: speed, diversity, networks, and influence on organizational effectiveness, human health, and relationships’, in N. Anderson, D. S. Ones, H. K. Sinangil and C. Viswesvaran (eds), Handbook of Industrial, Work and Organizational Psychology, vol. 2 (Thousand Oaks, CA: Sage, 2001), p. 190.   4 R. L. Simpson, ‘Vertical and horizontal communication in formal organizations’, Administrative Science Quarterly, September 1959, pp. 188–96; B. Harriman, ‘Up and down the communications ladder’, Harvard Business Review, September–October 1974, pp. 143–51; A. G. Walker and J. W. Smither, ‘A five-year study of upward feedback: what managers do with their results matter’, Personnel Psychology, Summer 1999, pp. 393–424; and J. W. Smither and A. G. Walker, ‘Are the characteristics of narrative comments related to improvement in multirater feedback ratings over time?’, Journal of Applied Psychology, 89, 3 (June 2004), pp. 575–81.   5 P. Dvorak, ‘How understanding the “why” of decisions matters’, Wall Street Journal, 19 March 2007, p. B3.   6 T. Neeley and P. Leonardi, ‘Effective managers say the same thing twice (or more)’, Harvard Business Review, May 2011, pp. 38–9.   7 H. A. Richardson and S. G. Taylor, ‘Understanding input events: a model of employees’ responses to requests for their input’, Academy of Management Review, 37 (2012), pp. 471–91.   8 J. Ewing, ‘Nokia: bring on the employee rants’, BusinessWeek, 22 June 2009, p. 50.  9 D. Tourish (2005) ‘Critical upward communication: ten commandments for improving strategy and decision making’, Long Range Planning, 38, pp. 485–503; D. Tourish and P. Robson, ‘Critical upward feedback in organizations: processes, problems and implications for communications management’, Journal of Communication Management, 8, 2 (2003). 10 E. Nichols, ‘Hyper-speed managers’, HR Magazine, April 2007, pp. 107–10. 11 See, for example, N. B. Kurland and L. H. Pelled, ‘Passing the word: toward a model of gossip and power in the workplace’, Academy of Management Review, April 2000, pp. 428–38; and G. Michelson, A. van Iterson and K. Waddington, ‘Gossip in organizations: contexts, consequences, and controversies’, Group and Organization Management, 35, 4 (2010), pp. 371–90.

12 G. Van Hoye and F. Lievens, ‘Tapping the grapevine: a closer look at word-of-mouth as a recruitment source’, Journal of Applied Psychology, 94, 2 (2009), pp. 341–52. 13 R. L. Rosnow and G. A. Fine, Rumor and Gossip: The Social Psychology of Hearsay (New York: Elsevier, 1976). 14 J. K. Bosson, A. B. Johnson, K. Niederhoffer and W. B. Swann Jr, ‘Interpersonal chemistry through negativity: bonding by sharing negative attitudes about others’, Personal Relationships, 13 (2006), pp. 135–50. 15 T. J. Grosser, V. Lopez-Kidwell and G. Labianca, ‘A social network analysis of positive and negative gossip in organizational life’, Group and Organization Management, 35, no. 2 (2010), pp. 177–212. 16 M. Feinberg, R. Willer, J. Stellar and D. Keltner, ‘The virtues of gossip: reputational information sharing as prosocial behavior’, Journal of Personality and Social Psychology, 102 (2012), pp. 1015–30. 17 Based on L. Hirschhorn, ‘Managing rumors’, in L. Hirschhorn (ed.), Cutting Back (San Francisco, CA: Jossey-Bass, 1983), pp. 54–6. 18 L. Dulye, ‘Get out of your office’, HR Magazine, July 2006, pp. 99–101. 19 A. Bryant, ‘Getting stuff done: it’s a goal, and a rating system’, New York Times, 9 March 2013, www.nytimes.com/2013/03/10/ business/kris-duggan-of-badgevilleon-the-getting-stuff-doneindex.html?pagewanted=all&_r=0. 20 M. Mihelich, ‘Bit by bit: stand-up comedy as a team-building exercise’, Workforce Management, February 2013, p. 16. 21 E. Agnvall, ‘Meetings go virtual’, HR Magazine, January 2009, pp. 74–7. 22 N. Bilton, ‘Disruptions: life’s too short for so much e-mail’, New York Times, 8 July 2012, http://bits.blogs.nytimes. com/2012/07/08/life%E2%80%99s-too-short-forso-much-email/. 23 R. E. Silverman, ‘How to be a better boss in 2013’, Wall Street Journal, 2 January 2013, pp. B1, B4. 24 B. Gates, ‘How I work’, Fortune, 17 April 2006, money.cnn.com. 25 G. J. Mark, S. Voida and A. V. Cardello, ‘“A pace not dictated by electrons”: an empirical study of work without email’, Proceedings of the SIGCHI Conference on Human Factors in Computing Systems (2012), pp. 555–64. 26 B. Roberts, ‘Social media gets strategic’, HR Magazine, October 2012, pp. 30–8.

ENDNOTES   327 27 http://newsroom.fb.com/company-info  28 Ibid. 29 L. Kwoh and M. Korn, ‘140 characters of risk: CEOs on Twitter’, Wall Street Journal, 26 September 2012, pp. B1, B8. 30 R. Barnett, ‘Ex-employee is sued over keeping work Twitter account’, USA Today, 24 February 2012, p. 4A. 31 L. S. Rashotte, ‘What does that smile mean? The meaning of nonverbal behaviors in social interaction’, Social Psychology Quarterly, March 2002, pp. 92–102. 32 C. K. Goman, ‘5 body language tips to increase your curb appeal’, Forbes, 4 March 2013, www.forbes.com/sites/carolkinseygoman/2013/03/14/5-body-language-tips-toincrease-your-curb-appeal/. 33 A. Metallinou, A. Katsamanis and S. Narayanan, ‘Tracking continuous emotional trends of participants during affective dyadic interactions using body language and speech information’, Image and Vision Computing, February 2013, pp. 137–52. 34 J. Smith, ‘10 nonverbal cues that convey confidence at work’, Forbes, 11 March 2013, www.forbes.com/sites/jacquelynsmith/ 2013/03/11/10-nonverbal-cues-that-conveyconfidence-at-work/. 35 See R. L. Daft and R. H. Lengel, ‘Information richness: a new approach to managerial behavior and organization design’, in B. M. Staw and L. L. Cummings (eds), Research in Organizational Behavior, vol. 6 (Greenwich, CT: JAI Press, 1984), pp. 191–233; R. L. Daft and R. H. Lengel, ‘Organizational information requirements, media richness, and structural design’, Managerial Science, May 1986, pp. 554–72; R. E. Rice, ‘Task analyzability, use of new media, and effectiveness’, Organization Science, November 1992, pp. 475–500; S. G. Straus and J. E. McGrath, ‘Does the medium matter? The interaction of task type and technology on group performance and member reaction’, Journal of Applied Psychology, February 1994, pp. 87–97; L. K. Trevino, J. Webster and E. W. Stein, ‘Making connections: complementary influences on communication media choices, attitudes, and use’, Organization Science, March–April 2000, pp. 163–82; and N. Kock, ‘The psychobiological model: towards a new theory of computer-mediated communication based on Darwinian evolution’, Organization Science, 15, 3 (May–June 2004), pp. 327–48. 36 E. Frauenheim, ‘Communicating for engagement during tough times’, Workforce Manageent Online, April 2010, www. workforce.com. 37 S. Shellenbarger, ‘Is this how you really talk?’ Wall Street Journal, 24 April 2013, pp. D1, D3. 38 D. Brady, ‘*!#?@ the e-mail. Can we talk?’, BusinessWeek, 4 December 2006, p. 109. 39 J. Sancton, ‘Re: Fwd: URGENT!’, Bloomberg Businessweek, 2–8 July 2012, p. 69. 40 C. Byron, ‘Carrying too heavy a load? The communication and miscommunication of emotion by email’, Academy of Management Review, 33, 2 (2008), pp. 309–27. 41 D. Goleman, ‘Flame first, think later: new clues to e-mail misbehavior’, New York Times, 20 February 2007, p. D5; and E. Krell, ‘The unintended word’, HR Magazine, August 2006, pp. 50–4. 42 J. E. Hall, M. T. Kobata and M. Denis, ‘Employees and e-mail privacy rights’, Workforce Management, June 2010, p. 10. 43 T. Espiner, ‘Email monitoring may contravene European laws’, ZDNet.co.uk. Available at http://news.zdnet.co.uk/itmanagement/0,1000000308,39286674,00.htm. Accessed 2 January 2009. 44 E. Bernstein, ‘The miscommunicators’, Wall Street Journal, 3 July 2012, pp. D1, D3. 45 B. Giamanco and K. Gregoire, ‘Tweet me, friend me, make me buy’, Harvard Business Review, July–August 2012, pp. 88–93.

46 D. Zielinski, ‘Find social media’s value’, HR Magazine, August 2012, pp. 53–5. 47 B. Roberts, ‘Social media gets strategic’, HR Magazine, October 2012, pp. 30–8. 48 T. Lytle, ‘Cybersleuthing’, HR Magazine, January 2012, pp. 55–57. 49 J. Segal, ‘Widening web of social media’, HR Magazine, June 2012, pp. 117–18. 50 M. V. Rafter, ‘Falling from a cloud’, Workforce Management, February 2013, pp. 22–3. 51 ‘At many companies, hunt for leakers expands arsenal of monitoring tactics’, Wall Street Journal, 11 September 2006, pp. B1, B3; and B. J. Alge, G. A. Ballinger, S. Tangirala and J. L. Oakley, ‘Information privacy in organizations: empowering creative and extrarole performance’, Journal of Applied Psychology, 91, 1 (2006), pp. 221–32. 52 R. E. Petty and P. Briñol, ‘Persuasion: from single to multiple to metacognitive processes’, Perspectives on Psychological Science, 3, 2 (2008), pp. 137–47; F. A. White, M. A. Charles and J. K. Nelson, ‘The role of persuasive arguments in changing affirmative action attitudes and expressed behavior in higher education’, Journal of Applied Psychology, 93, 6 (2008), pp. 1271–86. 53 B. T. Johnson and A. H. Eagly, ‘Effects of involvement on persuasion: a meta-analysis’, Psychological Bulletin, 106, 2 (1989), pp. 290–314; and K. L. Blankenship and D. T. Wegener, ‘Opening the mind to close it: considering a message in light of important values increases message processing and later resistance to change’, Journal of Personality and Social Psychology, 94, 2 (2008), pp. 196–213. 54 See, for example, Y. H. M. See, R. E. Petty and L. R. Fabrigar, ‘Affective and cognitive meta-bases of attitudes: unique effects of information interest and persuasion’, Journal of Personality and Social Psychology, 94, 6 (2008), pp. 938–55; M. S. Key, J. E. Edlund, B. J. Sagarin and G. Y. Bizer, ‘Individual differences in susceptibility to mindlessness’, Personality and Individual Differences, 46, 3 (2009), pp. 261–64 and M. Reinhard and M. Messner, ‘The effects of source likeability and need for cognition on advertising effectiveness under explicit persuasion’, Journal of Consumer Behavior, 8, 4 (2009), pp. 179–91. 55 M. Richtel, ‘Lost in e-mail, tech firms face self-made beast’, New York Times, 14 June 2008, pp. A1, A14; and M. Johnson, ‘Quelling distraction’, HR Magazine, August 2008, pp. 43–6. 56 W. R. Boswell and J. B. Olson-Buchanan, ‘The use of communication technologies after hours: the role of work–attitudes and work–life conflict’, Journal of Management, 33, 4 (2007), pp. 592–610. 57 P. Briñol, R. E. Petty and J. Barden, ‘Happiness versus sadness as a determinant of thought confidence in persuasion: a self-validation analysis’, Journal of Personality and Social Psychology, 93, 5 (2007), pp. 711–27. 58 R. C. Sinclair, S. E. Moore, M. M. Mark, A. S. Soldat and C. A. Lavis, ‘Incidental moods, source likeability, and persuasion: liking motivates message elaboration in happy people’, Cognition and Emotion, 24, 6 (2010), pp. 940–61; and V. Griskevicius, M. N. Shiota and S. L. Neufeld, ‘Influence of different positive emotions on persuasion processing: a functional evolutionary approach’, Emotion, 10, 2 (2010), pp. 190–206. 59 ‘Fit for business: employment trends survey 2007’, CBI available at cbi.org.uk. 60 ‘Spotlight on . . . working in the US’, Personnel Today, 4 July 2006. 61 E. W. Morrison and F. J. Milliken, ‘Organizational silence: a barrier to change and development in a pluralistic world’, Academy of Management Review, 25, 4 (2000), pp. 706–25; and

328  11 Communication B. E. Ashforth and V. Anand, ‘The normalization of corruption in organizations’, Research in Organizational Behavior, 25 (2003), pp. 1–52. 62 F. J. Milliken, E. W. Morrison and P. F. Hewlin, ‘An exploratory study of employee silence: issues that employees don’t communicate upward and why’, Journal of Management Studies, 40, 6 (2003), pp. 1453–76. 63 S. Tangirala and R. Ramunujam, ‘Employee silence on critical work issues: the cross-level effects of procedural justice climate’, Personnel Psychology, 61, 1 (2008), pp. 37–68; and F. Bowen and K. Blackmon, ‘Spirals of silence: the dynamic effects of diversity on organizational voice’, Journal of Management Studies, 40, 6 (2003), pp. 1393–1417. 64 B. R. Schlenker and M. R. Leary, ‘Social anxiety and self-presentation: a conceptualization and model’, Psychological Bulletin, 92 (1982), pp. 641–69; and L. A. Withers and L. L. Vernon, ‘To err is human: embarrassment, attachment, and communication apprehension’, Personality and Individual Differences, 40, 1 (2006), pp. 99–110. 65 See, for instance, S. K. Opt and D. A. Loffredo, ‘Rethinking communication apprehension: a Myers-Briggs perspective’, Journal of Psychology, September 2000, pp. 556–70; and B. D. Blume, G. F. Dreher and T. T. Baldwin, ‘Examining the effects of communication apprehension within assessment centres’, Journal of Occupational and Organizational Psychology, 83, 3 (2010), pp. 663–71.

three studies of self-reported lies’, Human Communication Research, 36, 1 (2010), pp. 2–25. 68 DePaulo, Kashy, Kirkendol, Wyer and Epstein, ‘Lying in everyday life’; and C. E. Naguin, T. R. Kurtzberg and L. Y. Belkin, ‘The finer points of lying online: e-mail versus pen and paper’, Journal of Applied Psychology, 95, 2 (2010), pp. 387–94. 69 A. Vrij, P. A. Granhag and S. Porter, ‘Pitfalls and opportunities in nonverbal and verbal lie detection’, Psychological Science in the Public Interest, 11, 3 (2010), pp. 89–121. 70 R. E. Axtell, Gestures: The Do’s and Taboos of Body Language Around the World (New York: Wiley, 1991); Watson Wyatt Worldwide, ‘Effective communication: a leading indicator of financial performance – 2005/2006 communication ROI study’, www.watsonwyatt.com/research/resrender.asp?id=w-868; and A. Markels, ‘Turning the tide at P&G’, U.S. News & World Report, 30 October 2006, p. 69. 71 See M. Munter, ‘Cross-cultural communication for managers’, Business Horizons, May–June 1993, pp. 75–6; and H. Ren and B. Gray, ‘Repairing relationship conflict: how violation types and culture influence the effectiveness of restoration rituals’, Academy of Management Review, 34, 1 (2009), pp. 105–26.

66 See, for example, J. A. Daly and J. C. McCroskey, ‘Occupational desirability and choice as a function of communication apprehension’, Journal of Counseling Psychology, 22, 4 (1975), pp. 309–13; and T. L. Rodebaugh, ‘I might look OK, but I’m still doubtful, anxious, and avoidant: the mixed effects of enhanced video feedback on social anxiety symptoms’, Behaviour Research & Therapy, 42, 12, December 2004, pp. 1435–51.

72 See E. T. Hall, Beyond Culture (Garden City, NY: Anchor Press/ Doubleday, 1976); W. L. Adair, ‘Integrative sequences and negotiation outcome in same- and mixed-culture negotiations’, International Journal of Conflict Management, 14, 3–4 (2003), pp. 1359–92; W. L. Adair and J. M. Brett, ‘The negotiation dance: time, culture, and behavioral sequences in negotiation’, Organization Science, 16, 1 (2005), pp. 33–51; E. Giebels and P. J. Taylor, ‘Interaction patterns in crisis negotiations: persuasive arguments and cultural differences’, Journal of Applied Psychology, 94, 1 (2009), pp. 5–19; and M. G. Kittler, D. Rygl and A. Mackinnon, ‘Beyond culture or beyond control? Reviewing the use of Hall’s high-/low-context concept’, International Journal of Cross-Cultural Management, 11, 1 (2011), pp. 63–82.

67 B. M. Depaulo, D. A. Kashy, S. E. Kirkendol, M. M. Wyer and J. A. Epstein, ‘Lying in everyday life’, Journal of Personality and Social Psychology, 70, 5 (1996), pp. 979–95; and K. B. Serota, T. R. Levine and F. J. Boster, ‘The prevalence of lying in America:

73 M. C. Hopson, T. Hart and G. C. Bell, ‘Meeting in the middle: Fred L. Casmir’s contributions to the field of intercultural communication’, International Journal of Intercultural Relations, November 2012, pp. 789–97.

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CHAPTER 12 Leadership Learning objectives After studying this chapter, you should be able to: 1 Contrast leadership and management. 2 Summarize the conclusions of trait theories of leadership. 3 Identify the central tenets and main limitations of behavioural theories. 4 Assess contingency theories of leadership by their level of support. 5 Contrast charismatic and transformational leadership. 6 Define authentic leadership. 7 Demonstrate the role mentoring plays in our understanding of leadership. 8 Address challenges to the effectiveness of leadership. 9 Discuss how organizations can find or create effective leaders.

I am more afraid of an army of 100 sheep led by a lion than an army of 100 lions led by a sheep. Talleyrand

CHRISTINE LAGARDE’S ADVICE? GRIT YOUR TEETH AND SMILE

Stefan Rousseau – WPA Pool/Getty Images

‘Every day, you have to prove yourself and convince – move forward and challenge yourself. And doubt all the time,’ says Christine Lagarde, named by Forbes as the 6th Most Powerful Woman in The World in 2015. Appointed Managing Director of the International Monetary Fund (IMF) in 2011, the Frenchborn Lagarde is not just one of the world’s most influential leaders, but she’s also an extraordinary role model for both established and ascending leaders alike. Lagarde’s career has successfully spanned both the private and public sectors, where she’s continually embraced high-pressure jobs and broken gender barriers within the traditionally male-dominated worlds of law, politics and finance. Her current post is no exception. The first woman to take the reigns of this 188-country financial organization, Lagarde joined the IMF in the wake of the global economic crisis and under a cloud of controversy surrounding her predecessor, Dominique Strauss-Kahn. Amidst formidable obstacles, Lagarde is, in effect, part banker, part physician – diagnosing and monitoring the financial health and stability of troubled nations around the world with the mission of getting them back on their financial feet. Some people talk about Lagarde with admiration that borders on hero worship. She ‘radiates charm’, she ‘oozes

respect’; she’s described variously as intelligent, beautiful, upstanding and elegant. In short, they usually conclude, elle a de la classe. In her campaign to get her IMF job, Lagarde had to convince China that she was worth voting for. The emerging market economies had spent weeks complaining about the European stranglehold on the job, but Lagarde won round Beijing in an afternoon. Lunch with the central bank governor and a meeting with the deputy prime minister was enough to clinch it. Colleagues at the IMF say Lagarde has delivered a change of tone; whereas Strauss-Kahn used to issue orders and rely on a narrow coterie of advisers, Lagarde takes pains to consult a wide group of people. ‘My management style is more inclusive. Perhaps you can say that is because I am a woman – I do think that women tend to be more inclusive. I am very decisive when it comes to organizing the team, but I do consult widely and hear many ideas before rushing in,’ she explains. Dominique Moisi, a founder of the French Institute for International Relations and an acquaintance says, ‘If I were to use two words to describe her they would be independence and self-control.’ Grit your teeth and smile.

Sources: Gillian Tett, ‘Power and grace’, Financial Times, 9 December 2011; Molly Guinness, ‘Is this the world’s sexiest women (and most powerful)?’ Guardian, 17 July 2011; Moira Forbes, ‘Christine Lagarde’s advice to women: grit your teeth and smile,’ Forbes, 26 July 2013; ‘The world’s 100 most powerful women’, Forbes www.forbes.com. Accessed 9 August 2015.

332  12 Leadership

In this chapter we begin by defining leadership and then discuss what makes an effective leader exceptional.

REFLECTION Think about a time when you led a group. Was it successful? Why or why not?

What is leadership? 1  Contrast leadership and management. leadership The ability to influence a group towards the achievement of a vision or set of goals.

We define leadership as the ability to influence a group towards the achievement of a vision or set of goals. The source of this influence may be formal, such as that provided by managerial rank in an organization. But not all leaders are managers, nor are all managers leaders. Just because an organization provides its managers with certain formal rights is no assurance they will lead effectively. Non-sanctioned leadership – the ability to influence that arises outside the formal structure of the organization – is often as important or more important than formal influence. Leaders can emerge from within a group as well as by formal appointment. Organizations need strong leadership and strong management for optimal effectiveness. We need leaders to challenge the status quo, create visions of the future and inspire organizational members to achieve the visions. We also need managers to formulate detailed plans, create efficient organizational structures and oversee day-to-day operations.

Trait theories 2  Summarize the conclusions of trait theories of leadership. trait theories of leadership Theories that consider personal qualities and characteristics that differentiate leaders from nonleaders.

Throughout history, strong leaders – Buddha, Napoleon, Mao, Lorenzo de’ Medici, de Gaulle, Churchill, Roosevelt – have all been described in terms of their traits. Trait theories of leadership differentiate leaders from nonleaders by focusing on personal qualities and characteristics. Individuals such as Maurice Lévy, CEO of Publicis, Virgin Group CEO Richard Branson and Fiat Chrysler CEO Sergio Marchionne are recognized as business leaders and often described in terms such as charismatic, enthusiastic and courageous. The search for personality, social, physical or intellectual attributes that would describe leaders and differentiate them from nonleaders goes back to the earliest stages of leadership research. Early efforts to isolate leadership traits resulted in a number of dead ends. For instance, a review in the late 1960s of 20 different studies identified nearly 80 leadership traits, but only five of these traits were common to four or more of the investigations.1 By the 1990s, after numerous studies and analyses, about the best thing that could be said was that most ‘leaders are not like other people’, but the particular traits that were isolated varied a great deal from review to review.2 It was a pretty confusing state of affairs. A breakthrough, of sorts, came when researchers began organizing traits around the Big Five personality framework (see Chapter 4).3 It became clear that most of the dozens of traits emerging in various leadership reviews could be subsumed under one of the Big Five and that this approach resulted in consistent and strong support for traits as predictors of leadership. For instance, ambition and energy – two common traits of leaders – are part of extroversion. Rather than focus on these two specific traits, it is better to think of them in terms of the more general trait of extroversion. A comprehensive review of the leadership literature, when organized around the Big Five, has found that extroversion to be the most predictive trait of effective leadership.4 But results show that extroversion is more strongly related to leader emergence than to leader ­effectiveness.

Scott Eells/Bloomberg via Getty Images

Trait theories   333

The founder of the Virgin Group which comprises of more than 400 companies, Sir Richard Branson, has built one of the most recognized brands in the world. A good deal of his success has been attributed to his leadership abilities that have been recognized by his peers. A poll of UK business chiefs voted Branson Britain’s most admired business leader over the past 50 years.5 When asked what makes Branson such a successful and respected leader, it is his traits that are often cited such as being fun loving, sensitive to the needs of others, hard working, innovative, charismatic, energetic and risk-taking.

This is not totally surprising since sociable and dominant people are more likely to assert themselves in group situations. While the assertive nature of extroverts is a positive, leaders need to make sure they’re not too assertive – one study found that leaders who scored very high on assertiveness were less effective than those who were moderately high.6 Conscientiousness and openness to experience also showed strong and consistent relationships to leadership, though not quite as strong as extroversion. The traits of agreeableness and emotional stability weren’t as strongly correlated with leadership. Overall, it does appear that the trait approach does have something to offer. Leaders who are extroverted (individuals who like being around people and are able to assert themselves), conscientious (individuals who are disciplined and keep commitments they make), and open (individuals who are creative and flexible) do seem to have an advantage when it comes to leadership, suggesting that good leaders do have key traits in common. Recent studies are indicating that another trait that may indicate effective leadership is emotional intelligence (EI) (which we discussed in Chapter 8). Advocates of EI argue that without it, a person can have outstanding training, a highly analytical mind, a compelling vision and an endless supply of terrific ideas but still not make a great leader. This may be especially true as individuals move up in an organization.7 But why is EI so critical to effective leadership? A core component of EI is empathy. Empathetic leaders can sense others’ needs, listen to what followers say (and don’t say) and read the reactions of others. A leader who effectively displays and manages emotions will find it easier to influence the feelings of followers by expressing genuine enthusiasm for good performance and by showing irritation when employees fail to perform.8 The link between EI and leadership effectiveness may be worth investigating in greater detail.9 Recent research has demonstrated that people high in EI are more likely to emerge as leaders, even after taking cognitive ability and personality into account.10 Based on the latest findings, we offer two conclusions. First, contrary to what we believed 20 years ago and thanks to the Big Five, we can say that traits can predict leadership. Second, traits do a better job predicting the emergence of leaders and the appearance of leadership than distinguishing between effective and ineffective leaders.11 The fact that an individual exhibits the right traits and that others consider him or her a leader does not necessarily mean the leader is successful at getting the group to achieve its goals.

334  12 Leadership

‘You need to be popular to be an effective leader’ This statement is false. It’s not surprising we tend to couple popularity with leadership effectiveness, since most of us tend to attribute various positive qualities to those we like. However, while there may be a link between popularity and leadership, it’s not necessarily between effectiveness and the degree to which a leader is liked. For example, a political figure running in an election who is well liked is more likely to become the country’s leader, but that has nothing to do with whether the elected official will be worth anything as a leader. If you consider for a moment, it is often the case that effective leaders need to make decisions that anger people, and that those decisions may be needed by an organization. These

MYTH OR SCIENCE?

‘hard decisions’ can result in a leader being unpopular on a personal level, but effective in terms of the organization. As a leader, it is unwise to strive to be ‘popular’, particularly if in doing so, the leader sacrifices important values, principles and beliefs, and avoids making unpopular decisions when they are necessary. That isn’t to say that leaders should go too far in the opposite direction, and act in obnoxious, offensive or egocentric ways that might, as a by-product, make them unpopular. Source: ‘You need to be popular, or well-liked to be an effective leader’, Leadership Resource Center. Available at: http://www.work911.com/leadership-­ development/faq/mythpopular.htm. Accessed 20 January 2009.

Behavioural theories 3  Identify the central tenets and main limitations of behavioural theories. behavioural theories of leadership Theories proposing that specific behaviours differentiate leaders from nonleaders. initiating structure The extent to which a leader is likely to define and structure his or her role and those of subordinates in the search for goal attainment. consideration The extent to which a leader is likely to have job relationships characterized by mutual trust, respect for subordinates’ ideas and regard for their feelings. employee-oriented leader A leader who emphasizes interpersonal relations, takes a personal interest in the needs of employees, and accepts individual differences among members.

The failures of early trait studies led researchers in the late 1940s through the 1960s to wonder whether there was something unique in the way effective leaders behave. Trait research provides a basis for selecting the right people for leadership. In contrast, behavioural theories of leadership implied we could train people to be leaders. The most comprehensive theories resulted from the Ohio State Studies in the late 1940s,12 which sought to identify independent dimensions of leader behaviour. Beginning with more than a thousand dimensions, the studies narrowed the list to two that substantially accounted for most of the leadership behaviour described by employees: initiating structure and consideration. Initiating structure is the extent to which a leader is likely to define and structure his or her role and those of employees in the search for goal attainment. It includes behaviour that attempts to organize work, work relationships and goals. A  leader high in initiating structure is someone who ‘assigns group members to particular tasks’, ‘expects workers to maintain definite standards of performance’ and ‘emphasizes the meeting of deadlines’, Consideration is the extent to which a person’s job relationships are characterized by mutual trust, respect for employees’ ideas and regard for their feelings. A leader high in consideration helps employees with personal problems, is friendly and approachable, treats all employees as equals and expresses appreciation and support. In one survey, when asked to indicate what most motivated them at work, 66 per cent of employees mentioned appreciation.13 Leadership studies at the University of Michigan’s Survey Research Centre had similar objectives to the Ohio State Studies: to locate behavioural characteristics of leaders that appeared related to performance effectiveness. The Michigan group also identified two behavioural types: the employee-oriented leader emphasized interpersonal relationships by taking a personal interest in employees’ needs and accepting individual differences among them, and the production-oriented leader emphasized technical or task aspects of jobs, focusing on accomplishing the group’s tasks. These dimensions are closely related to the Ohio State dimensions. Employee-oriented leadership is similar to consideration, and production-oriented leadership is similar to initiating structure. In fact, most researchers use the terms synonymously.14 At one time, the results of behavioural theories tests were thought to be disappointing. However, a review of 160 studies found the followers of leaders high in consideration were more satisfied with their jobs, were more motivated and had more respect for their leaders. Initiating structure was more strongly related to higher levels of group and organization productivity and more positive performance evaluations.

Behavioural theories   335 production-oriented leader A leader who emphasizes technical or task aspects of the job.

Research from the GLOBE study suggests there are international differences in the preference for initiating structure and consideration.15 Based on the values of Brazilian employees, for instance, a manager leading a team in Brazil would need to be team-­ oriented, participative and humane. Leaders high in consideration would succeed best in this culture. As one Brazilian manager said in the study, ‘We do not prefer leaders who take self-governing decisions and act alone without engaging the group. That’s part of who we are.’ The same research indicated that the French have a more bureaucratic view of leaders and are less likely to expect them to be participative. A leader high in initiating structure (relatively task-oriented) will do best and can make decisions in a relatively autocratic manner. A manager who scores high on consideration (people-oriented) may find that style backfires in France. Chinese culture emphasizes being polite, considerate and unselfish, but it has a high performance orientation. Thus, consideration and initiating structure may both be important.

Summary of trait theories and behavioural theories Leaders who have certain traits and who display consideration and structuring behaviours do appear to be more effective. Perhaps you’re wondering whether conscientious leaders (trait) are more likely to be structuring (behaviour) and extroverted leaders (trait) to be considerate (behaviour). Unfortunately, we are not sure there is a connection. Future research is needed to integrate these approaches. Some leaders may have the right traits or display the right behaviours and still fail. As important as traits and behaviours are in identifying effective or ineffective leaders, they do not guarantee success. For example, Sir Fred Goodwin, a Scottish banker, expanded the Royal Bank of Scotland (RBS) from its Edinburgh base by acquisitions to become a major international bank. However, when the global banking crisis hit, RBS nearly collapsed and Goodwin stood down as CEO soon after. Context matters too, which has given rise to the contingency theories we discuss next.

Leadership in small and medium enterprises

OB IN THE NEWS

Marcus Beale, a partner in the CFO practice at OdgersBerndtson, the executive search firm, gives his opinions:

As a business grows, does it need to change leadership?

Is leadership different in a small business?

As businesses evolve, they require different management teams and leadership capabilities. Entrepreneurial individuals who start companies have unique skills and traits that often do not make them good leaders of larger organisations. One of the secrets to Sir Richard Branson’s success is that having started a business, he has always known when to bring in a professional management team to run it.

Strong leadership is critical to the success of any business but its form depends on a business’s stage of growth. In a start-up what is required is hands-on, sleeves-rolled-up management, while large companies have managers who are less involved in the day-to-day managing. Their position is much more of a leadership role, establishing goals and determining strategy. SMEs occupy a middle position, where leaders need to manage actively and set directions.

Source: Marcus Beale, ‘Recruiting leaders for SMEs is complex task, Financial Times, 26 July 2012.

336  12 Leadership

Contingency theories

Henrik Kettunen / Alamy Stock Photo

Some tough-minded leaders seem to gain a lot of admirers when they take over struggling companies and lead them out of the doldrums. However, predicting leadership success is more complex than isolating a few traits or behaviours. What works in very bad times and in very good times doesn’t seem to translate into long-term success. When researchers looked at situational influences, it appeared that under condition a, leadership style x would be appropriate, whereas style y was more suitable for condition b, and style z for condition c. But what were conditions a, b and c? We next consider four approaches to isolating situational variables:

Rovio Entertainment, a Finnish games and entertainment company, was most noted for the development of the wildly successful Angry Birds game that has been downloaded more than 1 billion times. Co-founder and CEO Mikael Hed (above) stepped down from the top job five years after being appointed after presiding over a drop in profits of more than 50 per cent in a year. Early on in Hed’s reign the firm performed well, but later found it difficult to followup the success of Angry Birds with another profitable venture. Hed is an example of how leadership success can be influenced by the situation.

● 

the Fiedler model

● 

situational theory

● 

path–goal theory

● 

the leader-participation model.

Fiedler model The first comprehensive contingency model for leadership was developed by Fred Fiedler.16 The Fiedler contingency model proposes that effective group performance depends on the proper match between the leader’s style and the degree to which the situation gives control to the leader.

Identifying leadership style

Fiedler believes a key factor in leadership success is the individual’s basic leadership style. So he begins by trying to find out what that basic style is. Fiedler created the least preferred co-worker (LPC) questionnaire for this purpose; it purports to measure whether a person is taskor relationship-oriented. The LPC questionnaire contains sets of 16 contrasting adjectives (such as pleasant–unpleasant, efficient–inefficient, open–guarded, supportive–hostile). It asks respondents to think of all the co-workers they have ever had and to describe the one person they least enjoyed working with by rating that person on a scale of 1 to 8 for each of the 16 sets of contrasting adjectives. Fiedler believes that based on the respondents’ answers to this LPC questionnaire, he can determine their basic leadership style. If the least preferred co-worker is described in relatively positive terms (a high LPC score), then the respondent is primarily interested in good personal relations with this co-worker. That is, if you essentially describe the person you are least able to work with in favourable terms, Fiedler would label you relationship-oriented. In contrast, if the least preferred co-worker is seen in relatively unfavourable terms (a low LPC score), the respondent is primarily interested in productivity and thus would be labelled task oriented. About 16 per cent of respondents score in the middle range.17 Such individuals cannot be classified as either relationship-oriented or task-oriented and thus fall outside the theory’s predictions. The rest of our discussion, therefore, relates to the 84 per cent who score in either the high or low range of the LPC questionnaire. Fiedler assumes that an individual’s leadership style is fixed. As we’ll show, this is important because it means that if a situation requires a task-oriented leader and the person in that leadership position is relationship-oriented, either the situation has to be modified or the leader has to be replaced in order to achieve optimal effectiveness.

Source: http://www.businessinsider.com/rovio-new-ceo-pekka-rantala-­ succeeds-mikael-hed-2014–8U36T

4  Assess contingency theories of leadership by their level of support. Fiedler contingency model The theory that effective groups depend on a proper match between a leader’s style of interacting with subordinates and the degree to which the situation gives control and influence to the leader. least preferred co-worker (LPC) questionnaire An instrument that purports to measure whether a person is task- or relationshiporiented.

Defining the situation After assessing an individual’s basic leadership style through the LPC questionnaire, we match the leader with the situation. Fiedler identified three contingency or situational dimensions:

Contingency theories   337

1. Leader–member relations is the degree of confidence, trust and respect members have in

leader–member relations The degree of confidence, trust and respect subordinates have in their leader.

their leader. 2. Task structure is the degree to which the job assignments are procedurized (that is, structured

or unstructured). 3. Position power is the degree of influence a leader has over power variables such as hiring,

firing, discipline, promotions and salary increases.

task structure The degree to which job assignments are procedurized. position power Influence derived from one’s formal structural position in the organization; includes power to hire, fire, discipline, promote and give salary increases.

We evaluate the situation in terms of these three variables. Fiedler states that the better the leader–member relations, the more highly structured the job, and the stronger the position power, the more control the leader has. A very favourable situation (in which the leader has a great deal of control) might include a payroll manager who is well respected and whose employees have confidence in him (good leader–member relations), activities that are clear and specific – such as wage computation, cheque writing and report filing (high task structure), and provision of considerable freedom to reward and punish employees (strong position power). An unfavourable situation might be that of the disliked chairperson of a volunteer charity fundraising team. In this job, the leader has very little control.

Matching leaders and situations Combining the three contingency dimensions yields eight possible situations in which leaders can find themselves (Figure 12.1). The Fiedler model proposes matching an individual’s LPC score and these eight situations to achieve maximum leadership effectiveness.18 Fiedler concluded that task-oriented leaders perform better in situations very favourable to them and very unfavourable. So, when faced with a category I, II, III, VII or VIII situation, task-oriented leaders perform better. Relationship-oriented leaders, however, perform better in moderately favourable situations – categories IV, V and VI. Fiedler later condensed these eight situations down to three.19 Task-oriented leaders perform best in situations of high and low control, while relationship-oriented leaders perform best in moderate control situations. How would you apply Fiedler’s findings? You would match leaders – in terms of their LPC scores – with the type of situation – in terms of leader–member relationships, task structure

Task-oriented Relationship-oriented

Performance

Good

Poor Favourable Category

Moderate

Unfavourable

I

II

III

IV

V

VI

VII

VIII

Leader–member relations

Good

Good

Good

Good

Poor

Poor

Poor

Poor

Task structure

High

High

Low

Low

High

High

Low

Low

Weak

Strong

Weak

Strong

Weak

Strong

Weak

Position power Strong

Figure 12.1  Findings from the Fiedler model

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and position power – for which they were best suited. But remember that Fiedler views an individual’s leadership style as fixed. Therefore, there are only two ways to improve leader effectiveness. First, you can change the leader to fit the situation. If a group situation rates highly un­­ favourable but is currently led by a relationship-oriented manager, for example, the group’s performance could be improved under a manager who is task-oriented. The second alternative is to change the situation to fit the leader by restructuring tasks or increasing or decreasing the leader’s power to control factors such as salary increases, promotions and disciplinary actions.

Evaluation As a whole, reviews of the major studies that have tested the overall validity of the Fiedler model lead to a generally positive conclusion. That is, there is considerable evidence to support at least substantial parts of the model.20 If predictions from the model use only three categories rather than the original eight, there is ample evidence to support Fiedler’s conclusions.21 But there are problems with the LPC questionnaire and the practical use of the model that need to be addressed. For instance, the logic underlying the LPC questionnaire is not well understood, and studies have shown that respondents’ LPC scores are not stable.22 Also, the contingency variables are complex and difficult for practitioners to assess. It’s often difficult in practice to determine how good the leader–member relations are, how structured the task is, and how much position power the leader has.23

Other contingency theories Although LPC theory is the most researched contingency theory, three others deserve mention.

Situational leadership theory situational leadership theory (SLT) A contingency theory that focuses on followers’ readiness.

Situational leadership theory (SLT) focuses on the followers. It says successful leadership depends

on selecting the right leadership style contingent on the followers’ readiness, the extent to which they are willing and able to accomplish a specific task. A leader should choose one of four behaviours depending on follower readiness. If followers are unable and unwilling to do a task, the leader needs to give clear and specific directions; if they are unable and willing, the leader needs to display high task orientation to compensate for followers’ lack of ability, and high relationship orientation to get them to ‘buy into’ the leader’s desires. If followers are able and unwilling, the leader needs to use a supportive and participative style; if they are both able and willing, the leader doesn’t need to do much. SLT has intuitive appeal. It acknowledges the importance of followers and builds on the logic that leaders can compensate for their limited ability and motivation. Yet research efforts to test and support the theory have generally been disappointing.24 Why? Possible explanations include internal ambiguities and inconsistencies in the model itself as well as problems with research methodology in tests. So, despite its intuitive appeal and wide popularity, any endorsement must be cautious for now.

Path–goal theory path–goal theory A theory which states that it is the leader’s job to assist followers in attaining their goals and to provide the necessary direction and/or support to ensure that their goals are compatible with the overall objectives of the group or organization.

Developed by Robert House, path–goal theory extracts elements from the Ohio State leadership research on initiating structure and consideration and the expectancy theory of motivation.25 The theory suggests it’s the leader’s job to provide followers with information, support or other resources necessary to achieve goals. (The term path–goal implies effective leaders clarify followers’ paths to their work goals and make the journey easier by reducing roadblocks.) According to path–goal theory, whether a leader should be directive or supportive, or should demonstrate some other behaviour, depends on complex analysis of the situation. The theory predicts: ●

Directive leadership yields greater satisfaction when tasks are ambiguous or stressful than when they are highly structured and well laid out.

Leader–member exchange (LMX) theory   339 ●

●

Supportive leadership results in high performance and satisfaction when employees are performing structured tasks. Directive leadership is likely to be perceived as redundant among employees with high ability or considerable experience.

In a study of 162 workers in a document-processing organization, researchers found workers’ conscientiousness was related to higher levels of performance only when supervisors set goals and defined roles, responsibilities and priorities.26 Other research has found that goal-focused leadership can lead to higher levels of emotional exhaustion for subordinates who are low in conscientiousness and emotional stability.27 These studies demonstrate that leaders who set goals enable conscientious followers to achieve higher performance but may cause stress for workers who are low in conscientiousness.

Leader-participation model leader-participation model A leadership theory that provides a set of rules to determine the form and amount of participative decision making in different situations.

The final contingency theory we cover argues that the way the leader makes decisions is as important as what she or he decides. Victor Vroom and Phillip Yetton’s leader-­participation model relates leadership behaviour and participation in decision making.28 Like path– goal theory, it says leader behaviour must adjust to reflect the task structure. The model is normative – it provides a decision tree of seven contingencies and five leadership styles for ­determining the form and amount of participation in decision making. As one leadership scholar noted, ‘Leaders do not exist in a vacuum’; leadership is a symbiotic relationship between leaders and followers.29 But the theories we’ve covered to this point assume leaders use a fairly homogeneous style with everyone in their work unit. Think about your experiences in groups. Did leaders often act very differently towards different people? Our next theory considers differences in the relationships leaders form with different followers.

Leader–member exchange (LMX) theory leader–member exchange (LMX) theory A theory that supports leaders’ creation of ingroups and out-groups; subordinates with ingroup status will have higher performance ratings, less turnover, and greater job satisfaction.

Think of a leader you know. Did this leader tend to have favourites who made up his or her ‘in-group’? If you answered ‘yes’, you’re acknowledging the foundation of leader–member exchange theory.30 The leader–member exchange (LMX) theory argues that because of time pressures, leaders establish a special relationship with a small group of their followers. These individuals make up the in-group – they are trusted, get a disproportionate amount of the leader’s attention and are more likely to receive special privileges. Other followers fall into the out-group. They get less of the leader’s time, get fewer of the preferred rewards that the leader controls, and have leader–follower relations based on formal authority interactions. The theory proposes that early in the history of the interaction between a leader and a given follower, the leader implicitly categorizes the follower as an ‘in’ or an ‘out’, and that relationship is relatively stable over time. Leaders induce LMX by rewarding those employees with whom they want a closer linkage and punishing those with whom they do not.31 But for the LMX relationship to remain intact, the leader and the follower must invest in the relationship. Just precisely how the leader chooses who falls into each category is unclear, but there is evidence that leaders tend to choose in-group members because they have demographic, attitude and personality characteristics that are similar to the leader’s or a higher level of competence than out-group members32 (see Figure 12.2). For example, leaders of the same gender tend to have closer (higher LMX) relationships than when leaders and followers are of different genders.33 The key point to note here is that even though it is the leader who is doing the choosing, it is the follower’s characteristics that are driving the leader’s categorizing decision. Research to test LMX theory has been generally supportive. More specifically, the theory and research surrounding it provide substantive evidence that leaders do differentiate among followers; that these disparities are far from random; and that followers with in-group status will have higher performance ratings, engage in more helping or ‘citizenship’ behaviours at

340  12 Leadership Personal compatibility, subordinate competence and/or extroverted personality

Trust

Subordinate A

Subordinate B

Leader Formal relations

High interactions Subordinate C

In-group

Subordinate D

Subordinate E

Subordinate F

Out-group

Figure 12.2  Leader–member exchange theory

work and report greater satisfaction with their superior.34 These positive findings for in-group members shouldn’t be totally surprising, given our knowledge of self-fulfilling prophecy (see Chapter 5). Leaders invest their resources with those they expect to perform best. And ‘knowing’ that in-group members are the most competent, leaders treat them as such and unwittingly fulfil their prophecy.35 Leader–follower relationships may be stronger when followers have a more active role in shaping their own job performance. A study in Turkey demonstrated that when leaders differentiated strongly among their followers in terms of their relationships (some followers had very positive leader–member exchange, others very poor), employees responded with more negative work attitudes and higher levels of withdrawal behaviour.36 Research on 287 software developers and 164 supervisors showed leader–member relationships have a stronger impact on employee performance and attitudes when employees have higher levels of autonomy and a more internal locus of control.37

Charismatic leadership and transformational leadership 5 Contrast charismatic In this section, we present two contemporary leadership theories – charismatic leadership and and transformational transformational leadership – with a common theme: they view leaders as individuals who leadership. inspire followers through words, ideas and behaviours.

Charismatic leadership Mahatma Gandhi, Martin Luther King Jr, Mustafa Kemal Atatürk and in the business world Sir John Harvey-Jones, Carlos Ghosn, Paul Polman and Steve Jobs are individuals who have been frequently cited as being charismatic leaders. So what do they have in common?

What is charismatic leadership?

charismatic leadership theory A leadership theory that states that followers make attributions of heroic or extraordinary leadership abilities when they observe certain behaviours.

Sociologist Max Weber defined charisma (from the Greek for ‘gift’) more than a century ago as ‘a certain quality of an individual personality, by virtue of which he or she is set apart from ordinary people and treated as endowed with supernatural, superhuman, or at least specifically exceptional powers or qualities. These are not accessible to the ordinary person and are regarded as of divine origin or as exemplary, and on the basis of them the individual concerned is treated as a leader.’38 Weber argued that charismatic leadership was one of several ideal types of authority. The first researcher to consider charismatic leadership in terms of OB was Robert House. According to House’s charismatic leadership theory, followers attribute heroic or extraordinary leadership abilities when they observe certain behaviours, and tend to give these leaders power.39 A number of studies have attempted to identify the characteristics of charismatic

Mel Langsdon/Reuters

Douglas C. Pizac/AP/Press Association Images

Charismatic leadership and transformational leadership   341

The Skype company co-founders, Swede Niklas Zennström and Dane Janus Friis, demonstrate visionary characteristics. ‘We are launching Skype as the telecoms company of the future’, announced Zennström at the Skype launch. And Friis added, ‘We hope that one day, instead of saying ‘I’ll call you’, people will say ‘I’ll Skype you’’. With around 700 million users, that’s exactly what people are saying. Source: A. Thomann, ‘Skype – A Baltic success story’, Crédit Suisse Magazine, 6 September 2006.

leaders: they have a vision, are willing to take personal risks to achieve that vision, are sensitive to follower needs and exhibit extraordinary behaviours:40 1. Vision and articulation. Has a vision – expressed as an idealized goal – that proposes a

future better than the status quo and is able to clarify the importance of the vision in terms that are understandable to others. 2. Personal risk. Willing to take on high personal risk, incur high costs and engage in self-

sacrifice to achieve the vision. 3. Sensitivity to follower needs. Perceptive of others’ abilities and responsive to their needs

and feelings. 4. Unconventional behaviour. Engages in behaviours that are perceived as novel and counter

to norms.41

Are charismatic leaders born or made? Are charismatic leaders born with their qualities? Or can people actually learn to be charismatic leaders? Yes, and yes. Individuals are born with traits that make them charismatic. In fact, studies of identical twins have found they score similarly on charismatic leadership measures, even if they were raised in different households and never met. Personality is also related to charismatic leadership; charismatic leaders are likely to be extroverted, self-confident and achievement-­ oriented.42 To develop an aura of charisma by maintaining an optimistic view, use passion as a catalyst for generating enthusiasm and communicate with the whole body, not just with words. Use an animated voice, reinforce your message with eye contact and enthusiastic expressions and use gestures for emphasis. Draw others in by creating a bond that inspires them to follow. Bring out the potential in followers by tapping into their emotions. Recent research indicates that your presence matters as well in creating a charismatic impression. If you stay active and central in your leadership roles, you will naturally communicate your vision for achieving goals to your followers, which increases the likelihood that you will be seen as charismatic.43

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How charismatic leaders influence followers vision A long-term strategy for attaining a goal or goals. Vision statement A formal articulation of an organization’s vision or mission.

How do charismatic leaders actually influence followers? By articulating an appealing vision – a long-term strategy for attaining a goal by linking the present with a better future for the organization. Desirable visions fit the times and circumstances and reflect the uniqueness of the organization. A vision needs an accompanying vision statement, a formal articulation of an organiz-­ ation’s vision or mission. Charismatic leaders may use vision statements to imprint on followers an overarching goal and purpose. They build followers’ self-esteem and confidence with high performance expectations and the belief that followers can attain them. Next, through words and actions the leader conveys a new set of values and sets an example for followers to imitate. Charismatic leaders also set a tone of cooperation and mutual support. A study of 115 government employees found they had a stronger sense of personal belonging at work when they had charismatic leaders, increasing their willingness to engage in helping and compliance-oriented behaviour.44 Finally, the charismatic leader engages in emotion-inducing and often unconventional behaviour to demonstrate courage and conviction about the vision. Followers ‘catch’ the emotions their leader is conveying.45

Does effective charismatic leadership depend on the situation? People working for charismatic leaders are motivated to exert extra effort and, because they like and respect their leaders, express greater satisfaction. Organizations with charismatic CEOs are more profitable, and charismatic college professors enjoy higher course evaluations.46 Even in laboratory studies, when people are psychologically aroused, they are more likely to respond to charismatic leaders.47 This may explain why, when charismatic leaders surface, it’s likely to be in politics or religion, or during wartime, or when a business is in its infancy or facing a life-threatening crisis. In 1997, when Apple Computer was floundering and lacking direction, the board persuaded charismatic co-founder Steve Jobs to return as interim CEO and restore the company to its innovative roots and Carlos Ghosn won widespread acclaim in the late 1990s for rescuing Nissan from near bankruptcy. Another situational factor limiting charisma is the level in the organization. Top executives create vision; it’s more difficult to utilize a person’s charismatic leadership qualities in lower-level management jobs or to align his or her vision with the larger goals of the organization. Finally, people are especially receptive to charismatic leadership when they sense a crisis, when they are under stress, or when they fear for their lives. Charismatic leaders are able to reduce stress for their employees, perhaps because they help make work seem more meaningful and interesting.48 Some peoples’ personalities are especially susceptible to charismatic leadership.49 Consider self-esteem. An individual who lacks self-esteem and questions his or her selfworth is more likely to absorb a leader’s direction rather than establish his or her own way of leading or thinking.

The dark side of charismatic leadership Unfortunately, charismatic leaders who are larger than life don’t necessarily act in the best interests of their organizations.50 Many have allowed their personal goals to override the goals of the organization. The results at companies such as Enron, WorldCom and Parmalat were leaders who recklessly used organizational resources for their personal benefit and executives who violated laws and ethical boundaries to inflate stock prices and allow leaders to cash in millions of euros in stock options. Research has shown that individuals who are narcissistic are also higher in some behaviours associated with charismatic leadership.51 It’s not that charismatic leadership isn’t effective; overall, it is. But a charismatic leader isn’t always the answer. Success depends, to some extent, on the situation and on the leader’s vision. Some charismatic leaders are all too successful at convincing their followers to pursue a vision that can be disastrous.

Charismatic leadership and transformational leadership   343

EMPLOYABILITY AND LEADERSHIP The world renowned leadership expert, Daniel Goleman, explains why social intelligence is the must-have leadership skill: Why does social intelligence emerge as the make-or-break leadership skill set? For one, leadership is the art of accomplishing goals through other people. Technical skills and self-mastery alone allow you to be an outstanding individual contributor. But to lead, you need an additional interpersonal skill set: you’ve got to listen, communicate, persuade, collaborate. You can be the most brilliant innovator, problem-solver or strategic thinker, but if you can’t inspire and motivate, build relationships or communicate powerfully, those talents will get you nowhere. Social intelligence is the secret sauce in top-­ performing leadership. Lacking social intelligence, no other combination of competences is likely to get much ­traction.

So how do you spot this skill set? An executive with a long track record of satisfactory hires told me how his organization assessed social intelligence in a prospect during the round of interviews, group sessions, meals and parties that candidates there routinely went through. ‘We’d watch carefully to see if she talks to everyone at the party or a dinner, not just the people who might be helpful to her,’ he said. One of the social intelligence indicators: during a getting-to-know you conversation, does the candidate ask about the other person or engage in a self-centered monologue? At the same time, does she talk about herself in a natural way? At the end of the conversation, you should feel you know the person, not just the social self she tries to project. Source: Adapted from Must-Have Leadership Skill, HBR Blog, 14/10/2011 (Goleman, D.), https://hbr.org/2011/10/the-must-have-leadership-skill.

Transformational leadership transactional leaders Leaders who guide or motivate their followers in the direction of established goals by clarifying role and task requirements. transformational leaders Leaders who inspire followers to transcend their own self-interests and who are capable of having a profound and extraordinary effect on followers.

A stream of research has focused on differentiating transformational from transactional leaders.52 The Ohio State studies, Fiedler’s model, and path–goal theory describe transactional leaders, who guide their followers towards established goals by clarifying role and task requirements. Transformational leaders inspire followers to transcend their self-interests for the good of the organization. Transformational leaders can have an extraordinary effect on their followers. Richard Branson of the Virgin Group is a good example of a transformational leader. He pays attention to the concerns and needs of individual followers, changes followers’ awareness of issues by helping them look at old problems in new ways, and excites and inspires followers to put forth extra effort to achieve group goals. Recent research suggests that transformational leaders are most effective when their followers are able to see the positive impact of their work through direct interaction with customers or other beneficiaries.53 Table 12.1 briefly identifies and defines characteristics that differentiate these two types of leaders. Table 12.1  Characteristics of transactional and transformational leaders Transactional leader

Transformational leader

Contingent reward: Contracts exchange of rewards for effort, promises rewards for good performance, recognizes accomplishments.

Idealized influence: Provides vision and sense of mission, instils pride, gains respect and trust.

Management by exception (active): Watches and searches for deviations from rules and standards, takes correct action.

Inspirational motivation: Communicates high expectations, uses symbols to focus efforts, ­expresses important purposes in simple ways.

Management by exception (passive): Intervenes Intellectual stimulation: Promotes intelligence, only if standards are not met. rationality and careful problem solving. Laissez-faire: Abdicates responsibilities, avoids making decisions.

Individualized consideration: Gives personal attention, treats each employee individually, coaches, advises.

Sources: Based on A. H. Eagly, M. C. Johannesen-Schmidt and M. L. Van Engen, ‘Transformational, transactional, and laissezfaire leadership styles: a meta-analysis comparing women and men’, Psychological Bulletin, 129, 4 (2003), pp. 569–91; T. A. Judge and J. E. Bono, ‘Five factor model of personality and transformational leadership’, Journal of Applied Psychology, 85, 5 (2000), pp. 751–65; and B. M. Bass, ‘From transactional to transformational leadership: learning to share the vision’, Dynamics, 18, 3, Winter 1990, p. 22. Copyright 1990, with permission from Elsevier.

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Transactional and transformational leadership complement each other; they aren’t opposing approaches to getting things done.54 Transformational leadership builds on transactional leadership and produces levels of follower effort and performance beyond what transactional leadership alone can do. But the reverse isn’t true. So if you are a good transactional leader but do not have transformational qualities, you’ll likely only be a mediocre leader. The best leaders are transactional and transformational.

Full range of leadership model Figure 12.3 shows the full range of leadership model. Laissez-faire is the most passive and therefore least effective of leader behaviours.55 Management by exception – active or passive – is slightly better, but it’s still considered ineffective. Management-by-exception leaders tend to be available only when there is a problem, which is often too late. Contingent reward leadership can be an effective style of leadership but will not get employees to go above and beyond the call of duty. Only with the four remaining styles – all aspects of transformational leadership – are leaders able to motivate followers to perform above expectations and transcend their selfinterest for the sake of the organization. Individualized consideration, intellectual stimulation, inspirational motivation and idealized influence (known as the ‘four I’s’) all result in extra effort from workers, higher productivity, higher morale and satisfaction, higher organizational effectiveness, lower turnover, lower absenteeism and greater organizational adaptability. Based on this model, leaders are generally most effective when they regularly use the four I’s.

How transformational leadership works Transformational leaders are more effective because they are creative, but also because they encourage those who follow them to be creative, too.56 Companies with transformational leaders have greater decentralization of responsibility, managers have more propensity to take Effective Idealized influence

Individualized consideration Contingent reward

Passive

on sa cti Tr an

Laissez-faire

at rm sfo

Active

al

Management by exception

Tr an

Intellectual stimulation

io

na

l

Inspirational motivation

Ineffective

Figure 12.3  Full range of leadership model

Charismatic leadership and transformational leadership   345

risks, and compensation plans are geared towards long-term results – all of which facilitate corporate entrepreneurship.57 One study of information technology workers in China found empowering leadership behaviour led to feelings of positive personal control among workers, which increased their creativity at work.58 Another recent study indicated that abusive supervisors negatively affect creativity, not for just their direct reports but for whole teams.59 Companies with transformational leaders show greater agreement among top managers about the organization’s goals, which yields superior organizational performance.60 Transformational leaders are able to increase follower self-efficacy, giving the group a ‘can do’ spirit.61 Followers are more likely to pursue ambitious goals, agree on the strategic goals of the organization, and believe the goals they are pursuing are personally important.62 Just as vision helps explain how charismatic leadership works, it also explains part of the effect of transformational leadership. One study found vision was even more important than a charismatic (effusive, dynamic, lively) communication style in explaining the success of entrepreneurial firms.63

Evaluation of transformational leadership Transformational leadership has been supported at diverse job levels and occupations (school principals, teachers, marine commanders, ministers, presidents of MBA associations, military cadets, union shop stewards, sales reps). One study of R&D firms found teams whose project leaders scored high on transformational leadership produced better-quality products as judged one year later and higher profits five years later.64 Another study looking at employee creativity and transformational leadership found employees with transformational leaders had more confidence in their ability to be creative at work and higher levels of creative performance.65 A review of 117 studies testing transformational leadership found it was related to higher levels of individual follower performance, team performance and organizational performance.66 Transformational leadership isn’t equally effective in all situations. It has a greater impact on the bottom line in smaller, privately held firms than in more complex organizations.67 Transformational leadership may be more effective when leaders can directly interact with the workforce to make decisions than when they report to an external board of directors or deal with a complex bureaucratic structure. One study showed transformational leaders were more effective in improving group potency in teams higher in power distance and collectivism.68 Other research using a sample of employees both in China and the United States found that transformational leadership had a more positive relationship with perceived procedural justice among individuals who were lower in power-distance orientation, which in turn related to a stronger transformational leadership-citizenship behaviour relationship among those higher in power distance.69 Transformational leaders also obtain higher levels of trust, which reduces stress for followers.70 In short, transformational leadership works through a number of different processes. One study examined how different types of transformational leadership can be effective depending on whether work is evaluated at the team or the individual level.71 Individual-­ focused transformational leadership is behaviour that empowers individual followers to develop, enhance their abilities and increase self-efficacy. Team-focused transformational leadership emphasizes group goals, shared values and beliefs, and unified efforts. Evidence from a sample of 203 team members and 60 leaders in a business unit found individual transformational leadership associated with higher individual-level performance, whereas team-focused transformational leadership drew higher group-level performance. Transformational leadership theory is not perfect. Contingent reward leadership may not characterize transactional leaders only. And contrary to the full range of leadership model, the four I’s of transformational leadership are not always superior in effectiveness to ­transactional leadership; contingent reward leadership sometimes works as well as transformational ­leadership. In summary, transformational leadership is more strongly correlated than transactional leadership with lower turnover rates, higher productivity, lower employee stress and burnout,

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and higher employee satisfaction.72 Like charisma, it can be learned. One study of Canadian bank managers found branches managed by those who underwent transformational leadership training performed significantly better than branches whose managers did not receive training. The GLOBE study – of 18,000 leaders from 825 organizations in 62 countries – links a number of elements of transformational leadership with effective leadership, regardless of country.73 This conclusion is very important because it disputes the contingency view that leadership style needs to adapt to cultural differences. What elements of transformational leadership appear universal? Vision, foresight, providing encouragement, trustworthiness, dynamism, positiveness and proactiveness top the list. The GLOBE team concluded that ‘effective business leaders in any country are expected by their subordinates to provide a powerful and proactive vision to guide the company into the future, strong motivational skills to stimulate all employees to fulfil the vision, and excellent planning skills to assist in implementing the vision.’74 A vision is important in any culture, but the way it is formed and communicated may need to be adapted.

Authentic leadership: ethics and trust 6 Define authentic leadership.

Although theories have increased our understanding of effective leadership, they do not explicitly deal with the role of ethics and trust, which some argue is essential to complete the picture. Here, we consider these two concepts under the rubric of authentic leadership.75

What is authentic leadership?

authentic leaders Leaders who know who they are, know what they believe in and value, and act on those values and beliefs openly and candidly. Their followers would consider them to be ethical people.

SAP’s CEO Bill McDermott’s motto is ‘Stay Hungry, Stay Humble’, and he appears to practise what he preaches. Campbell Soup’s CEO Denise Morrison decided to lower sodium in the company’s soup products simply because it was the right thing to do. McDermott and Morrison appear to be good exemplars of authentic leadership.76 Authentic leaders know who they are, know what they believe in and value, and act on those values and beliefs openly and candidly. Their followers consider them ethical people. The primary quality produced by authentic leadership is trust. Authentic leaders share information, encourage open communication and stick to their ideals. The result: people come to have faith in them. There has been limited research on authentic leadership to date. However, recent research indicates that authentic leadership, especially when shared among top management team members, created a positive energizing effect that heightened firm performance.77 Authentic leadership is a promising way to think about ethics and trust in leadership because it focuses on the moral aspects of being a leader. Transformational or charismatic leaders can have a vision and communicate it persuasively, but sometimes the vision is wrong, or the leader is more concerned with his or her own needs or pleasures, as were Dennis Kozlowski (ex-CEO of Tyco), Jeff Skilling (ex-CEO of Enron) and Raj Rajaratnam (founder of the Galleon Group).78

Ethical leadership Researchers have begun to study the ethical implications in leadership.79 Why now? One reason may be the growing interest in ethics throughout the field of management. Another may be the discovery that many past leaders suffered ethical shortcomings. Also, there is a growing realization that although every member of an organization is responsible for ethical behaviour, many initiatives aimed at increasing organizational ethical behaviour are focused on the leaders. The role of the leader in creating the ethical expectations for all members is crucial.80 Ethics and leadership intersect at a number of junctures. Transformational leadership has ethical implications since these leaders change the way followers think. Charisma, too, has an ethical component. Unethical leaders use their charisma to enhance power over followers, directed towards self-serving ends.

Authentic leadership: ethics and trust   347

socialized charismatic leadership A leadership concept that states that leaders convey values that are other-centred versus self-centred and who role-model ethical conduct. servant leadership A leadership style marked by going beyond the leader’s own self-interest and instead focusing on opportunities to help followers grow and develop.

Leaders who treat their followers with fairness, especially by providing honest, frequent and accurate information, are seen as more effective.81 Related to this is the concept of humbleness, another characteristic ethical leaders often exhibit as part of being authentic. Research indicates that leaders who model humility help followers to understand the growth process for their own development.82 Leaders rated as highly ethical tend to have followers who engage in more organizational citizenship behaviours and who are more willing to bring problems to the leaders’ attention.83 Recent research also found that ethical leadership reduced interpersonal conflicts.84 Because top executives set the moral tone for an organization, they need to set high ethical standards, demonstrate them through their own behaviour, and encourage and reward integrity in others while avoiding abuses of power such as giving themselves large pay rises and bonuses while laying off employees. A recent research review found that role modelling by top leaders positively influenced managers throughout their organizations to behave ethically and fostered a climate that reinforced group-level ethical conduct. The findings suggest that organiz­ ations should invest in ethical leadership training programmes, especially in industries with few ethical regulations. The researchers furthermore advised that ethical leadership training programmes to teach cultural values should be mandated for leaders who take foreign assignments or manage multicultural work teams.85 For ethical leadership to be effective, it is not enough for the leader to simply possess high moral character. After all, there is no universal standard for ethical behaviour, and ethical norms vary by culture, by industry and even sometimes within an organization. Leaders must be willing to express their ethical beliefs and persuade others to follow their standards. Followers must believe in both the leader and the overlying principles, even if they don’t personally agree with every minor stance. To convey their beliefs, leaders should learn to express their moral convictions in statements that reflect values shared with their organization’s members. Leaders can build on this foundation of trust to show their character, enhance a sense of unity and create buy-in from followers. The leader’s message should announce high goals and confidence that they can be reached. Leadership is not value-free. In assessing its effectiveness, we need to address the means a leader uses to achieve goals as well as the content of those goals. Scholars have tried to integrate ethical and charismatic leadership by advancing the idea of socialized charismatic leadership – leadership that conveys other-centred (not self-centred) values by leaders who model ethical conduct.86 Socialized charismatic leaders are able to bring employee values in line with their own values through their words and actions.87

Servant leadership Scholars have recently considered ethical leadership from a new angle by examining servant leadership.88 Servant leaders go beyond their self-interest and focus on opportunities to help followers grow and develop. They don’t use power to achieve ends; they emphasize persuasion. Characteristic behaviours include listening, empathizing, persuading, accepting stewardship and actively developing followers’ potential. A recent study of 126 CEOs found that servant leadership is negatively correlated with the trait of narcissism.89 Because servant leadership focuses on serving the needs of others, research has focused on its outcomes for the well-being of followers. What are the effects of servant leadership? One study of 123 supervisors found it resulted in higher levels of commitment to the supervisor, self-efficacy and perceptions of justice, which all were related to organizational citizenship behaviour.90 This relationship between servant leadership and follower OCB appears to be stronger when followers are focused on being dutiful and responsible.91 Second, servant leadership increases team potency (a belief that one’s team has above-average skills and abilities), which in turn leads to higher levels of group performance.92 Third, a study with a nationally representative sample found higher levels of citizenship associated with a focus on growth and advancement, which in turn was associated with higher levels of creative performance.93 Servant leadership may be more prevalent and more effective in certain cultures.94 When asked to draw images of leaders, for example, US subjects tend to draw them in front of the

348  12 Leadership

group, giving orders to followers. Singaporeans tend to draw leaders at the back of the group, acting more to gather a group’s opinions together and then unify them from the rear. This suggests the East Asian prototype is more like a servant leader, which might mean servant leadership is more effective in these cultures.

Trust and leadership trust A positive expectation that another will not act opportunistically.

Trust is a psychological state that exists when you agree to make yourself vulnerable to another because you have positive expectations about how things are going to turn out.95 Although you aren’t completely in control of the situation, you are willing to take a chance that the other person will come through for you. Trust is a primary attribute associated with leadership; breaking it can have serious adverse effects on a group’s performance.96 Followers who trust a leader are confident their rights and interests will not be abused.97 Transformational leaders create support for their ideas in part by arguing that their direction will be in everyone’s best interests. People are unlikely to look up to or follow someone they perceive as dishonest or likely to take advantage of them. Thus, as you might expect, transformational leaders do generate higher levels of trust from their followers, which in turn is related to higher levels of team confidence and, ultimately, higher levels of team performance.98 In a simple contractual exchange of goods and services, your employer is legally bound to pay you for fulfilling your job description. But today’s rapid reorganizations, diffusion of responsibility and collaborative team-based work style mean employment relationships are not stable long-term contracts with explicit terms. Rather, they are more fundamentally based on trusting relationships than ever before. You have to trust that if you show your supervisor a creative project you’ve been working on, he or she won’t steal the credit behind your back. You have to trust that the extra work you’ve been doing will be recognized in your performance appraisal. In contemporary organizations, where work is less closely documented and specified, voluntary employee contribution based on trust is absolutely necessary. Only a trusted leader will be able to encourage employees to reach beyond themselves to a ­transformational goal.

Photographic Services, Shell International Limited

How is trust developed?

Organizational relationships with Ceri Powell, Shell’s Executive Vice President Upstream International Exploration, are founded on trust. Having spent almost her entire career with Shell, her colleagues know her well. Powell is one of the most senior women in the energy industry and has featured on Fortune Magazine’s Most Powerful Women List.

Trust isn’t just about the leader; the characteristics of followers also influence its development. What key characteristics lead us to believe a leader is trustworthy? Evidence has identified three: integrity, benevolence and ability (see Figure 12.4).99 Integrity refers to honesty and truthfulness. When 570 white-collar employees were given a list of 28 attributes related to leadership, they rated honesty the most important by far.100 Integrity also means having consistency between what you do and say. Benevolence means the trusted person has your interests at heart, even if yours aren’t necessarily in line with theirs. Caring and supportive behaviour is part of the emotional bond between leaders and followers. Ability encompasses an individual’s technical and interpersonal knowledge and skills. Even a highly principled person with the best intentions in the world won’t be trusted to accomplish a positive outcome for you if you don’t have faith in his or her ability to get the job done. Does the person know what he or she is talking about? You’re unlikely to listen to or depend on someone whose abilities you don’t believe in.

Authentic leadership: ethics and trust   349 Leader trustworthiness Integrity Benevolence

Risk taking Trust

Ability

Information sharing Group effectiveness Productivity

Propensity to trust

Figure 12.4  The nature of trust

Trust as a process Trust propensity refers to how likely a particular employee is to trust a leader. Some people are simply more likely to believe others can be trusted.101 Those who carefully document every promise or conversation with their supervisors aren’t very high in trust propensity, and they probably aren’t going to take a leader’s word for anything. Those who think most people are basically honest and forthright will be much more likely to seek out evidence that their leaders have behaved in a trustworthy manner. Trust propensity is closely linked to the personality trait of agreeableness, and people with lower self-esteem are less likely to trust others.102 Time is the final component for building trust. We come to trust people based on observing their behaviour over a period of time.103 Leaders need to demonstrate they have integrity, benevolence and ability in situations where trust is important – say, where they could behave opportunistically or let employees down. Trust can be won in the ability domain by demonstrating competence. Recent research with 100 companies around the world suggests that leaders can build trust by shifting their communication style from top-down commands to ongoing organizational dialogue. When leaders regularly create interpersonal conversations with their employees that are intimate, interactive and inclusive and that intentionally follow an agenda, followers demonstrate trust with high levels of engagement.104 Leaders who break the psychological contract with workers, demonstrating they aren’t trustworthy, will find employees are less satisfied and less committed, have a higher intent towards turnover, engage in less citizenship behaviour and have lower levels of task performance.105 Leaders who betray trust are especially likely to be evaluated negatively by followers if there is already a low level of leader–member exchange.106 Once it is violated, trust can be regained, but only in certain situations and depending on the type of violation.107 If the cause is lack of ability, it’s usually best to apologize and recognize you should have done better. When lack of integrity is the problem, apologies don’t do much good. Regardless of the violation, saying nothing or refusing to confirm or deny guilt is never an effective strategy for regaining trust. Trust can be restored when we observe a consistent pattern of trustworthy behaviour by the transgressor. However, if the transgressor used deception, trust never fully returns, not even after apologies, promises or a consistent pattern of trustworthy actions.108

What are the consequences of trust? Trust between supervisors and employees has a number of advantages. Here are just a few that research has shown: ●

●

Trust encourages taking risks. Whenever employees decide to deviate from the usual way of doing things, or to take their supervisors’ word on a new direction, they are taking a risk. In both cases, a trusting relationship can facilitate that leap. Trust facilitates information sharing. One big reason employees fail to express concerns at work is that they don’t feel psychologically safe revealing their views. When managers

350  12 Leadership

demonstrate they will give employees’ ideas a fair hearing and actively make changes, employees are more willing to speak out.109 ●

●

Trusting groups are more effective. When a leader sets a trusting tone in a group, members are more willing to help each other and exert extra effort, which increases trust. Members of mistrusting groups tend to be suspicious of each other, constantly guard against exploitation, and restrict communication with others in the group. These actions tend to undermine and eventually destroy the group. Trust enhances productivity. The bottom-line interest of companies appear to be positively influenced by trust. Employees who trust their supervisors tend to receive higher performance ratings.110 People respond to mistrust by concealing information and secretly pursuing their own interests.

Leaders broaden their span of control in multinational organizations In the past 20 years, senior corporate leaders have increased their average number of direct reports from 5 to 10 as their organizations have spread into new multinational territories. You may think this is yet another example of organization bloat. In reality, it has more to do with the desire of today’s CEOs to directly engage with all areas of their business interests, bringing in representatives from new overseas ventures and even eliminating a significant middle layer of hierarchy (the role of the deputy, or COO, is on the decline among Fortune 500 companies). In fact, 80 per cent of the new managers reporting to CEOs are functional leaders, who have been increasingly taking on general manager roles. While the jump from 5 to 10 may not seem big in terms of headcount, the fact that these new direct reports represent diverse corporate interests poses a challenge for leadership. Research suggests the number of direct reports should be fewer than five if significant cross-organizational collaboration is needed, as in most multinational organizations. Experts also advise limiting the CEO’s span of control when organizations are in transition, as globally expanding businesses are by definition. The type of leadership the organization’s particular CEO embodies should also suggest the optimal span of control, as should the national cultures of top overseas managers. A study

glOBal

from 23 countries showed that, in agreement with leader– member exchange (LMX) theory discussed in this chapter, individuals whose leaders treat them as favourites trust their leaders more in individualistic than in collectivistic cultures. This suggests that a CEO may be effective with a higher number of direct reports when they are from the organiz­ ation’s Asian business interests, for example, because the collectivist culture’s respect for authority does not depend on personalized LMX attention. A CEO managing Western culture direct reports might be better advised to keep the number to five or fewer in order to leverage the positive outcomes of high LMX. Leadership issues are always at the forefront as companies expand. Companies have stretched and flattened their organizational structures to meet their global aspirations, but few leaders have directly addressed the high need for mental proximity – the ability to connect closely with their key employees, who are, after all, influential leaders themselves. Sources: B. Groysberg and M. Slind, ‘Leadership is a conversation’, Harvard Business Review, June 2012, pp. 76–84; G. L. Neilson and J. Wulf, ‘How many direct reports?’ Harvard Business Review , April 2012, pp. 112–19; and T. Rockstuhl, J. H. Dulebohn, S. Ang and L. M. Shore, ‘Leader-member exchange (LMX) and culture: a meta-analysis of correlates of LMX across 23 countries’, Journal of Applied Psychology, 97 (2012), pp. 1097–130.

Leading for the future: mentoring 7  Demonstrate the role mentoring plays in our understanding of leadership.

Leaders often take responsibility for developing future leaders. Let’s consider what makes mentoring valuable as well as its potential pitfalls.

Mentoring A mentor is a senior employee who sponsors and supports a less-experienced employee, a protégé. Successful mentors are good teachers. They present ideas clearly, listen well and empathize with protégés’ problems. Mentoring relationships serve career functions and ­ psychosocial functions (see Table 12.2).111

Challenges to the leadership construct   351 mentor A senior employee who sponsors and supports a less-experienced employee, called a protégé.

Table 12.2  Career and psychological functions of the mentoring relationship Career functions

Psychosocial functions

Lobbying to get the protégé challenging and visible assignments

Counselling the protégé about anxieties and uncertainty to help bolster their self-­ confidence

Coaching the protégé to help develop their skills and achieve work objectives

Sharing personal experiences with the protégé

Assisting the protégé by providing exposure to influential individuals within the organization

Providing friendship and acceptance

Protecting the protégé from possible risks to their reputation

Acting as a role model

Sponsoring the protégé by nominating them for potential advances or promotions Acting as a sounding board for ideas that the protégé might be hesitant to share with their direct supervisor

Traditional informal mentoring relationships develop when leaders identify a less experienced, lower-level employee who appears to have potential for future development.112 The protégé is often tested with a particularly challenging assignment. If he or she performs acceptably, the mentor will develop the relationship, informally showing the protégé how the organization really works outside its formal structures and procedures. Why would a leader want to be a mentor?113 Many feel they have something to share with the younger generation and want to provide a legacy. Mentoring provides unfiltered access to the attitudes of employees, and protégés can be an excellent source of early warning signals that identify potential organizational problems. Are all employees in an organization likely to participate in a mentoring relationship? Unfortunately, no.114 However, research continues to indicate that employers should establish mentoring programmes because they benefit both mentors and protégés. A recent study in Korea found that mentors achieved higher levels of transformational leadership abilities as a result of the process, while organizational commitment and well-being increased for both mentors and protégés.115 Although begun with the best intentions, these formal relationships are not as effective as informal ones.116 Poor planning and design may often be the reason. Mentor commitment is critical to programme effectiveness; mentors must see the relationship as beneficial to themselves and the protégé. The protégé must feel he or she has input into the relationship; someone who feels it’s foisted on him or her will just go through the motions.117 Formal mentoring programmes are also most likely to succeed if they appropriately match the work style, needs and skills of protégé and mentor.118 You might assume mentoring is valuable for objective outcomes like compensation and job performance, but research suggests the gains are primarily psychological. Research indicates that while mentoring can have an impact on career success, it is not as much of a contributing factor as ability and personality. It may feel nice to have a mentor, but it doesn’t appear that having a good mentor, or any mentor, is critical to your career. Mentors may be effective not because of the functions they provide, but because of the resources they can obtain; a mentor connected to a powerful network can build relationships that will help the protégé advance. Network ties, whether built through a mentor or not, are a significant predictor of career success.119 If a mentor is not well connected or not a very strong performer, the best mentoring advice in the world will not be very beneficial.

Challenges to the leadership construct 8 Address challenges to the effectiveness of leadership.

In this section, we present two perspectives and one technological change that challenge accepted beliefs about the value of leadership.

352  12 Leadership

Leadership as an attribution attribution theory of leadership A leadership theory that says that leadership is merely an attribution that people make about other individuals.

Attribution theory examines how people try to make sense of cause-and-effect relationships (see Chapter 5). The attribution theory of leadership says leadership is merely an attribution people make about other individuals.120 We attribute to leaders intelligence, outgoing personality, strong verbal skills, aggressiveness, understanding and industriousness.121 At the organizational level, we tend, rightly or wrongly, to see leaders as responsible for both extremely negative and extremely positive performance.122 One study of 128 major US corporations found that whereas perceptions of CEO charisma did not lead to objectively better company performance, company performance did lead to perceptions of charisma.123 Employee perceptions of leaders’ behaviours are significant predictors of whether they blame the leader for failure, regardless of how the leader assesses him- or herself.124 A study of more than 3,000 employees from western Europe, the United States and the Middle East found people who tended to ‘romanticize’ leadership in general were more likely to believe their own leaders were transformational.125 When Merrill Lynch began to lose billions in 2008 as a result of its investments in mortgage securities, it wasn’t long before CEO Stan O’Neal lost his job. O’Neal appeared before the House Oversight and Government Reform Committee of the US Congress for what one committee member termed ‘a public flogging’. Some called him a ‘criminal’ and others suggested Merrill’s losses during his tenure represented ‘attempted destruction’.126 Whether O’Neal was responsible for the losses at Merrill or deserved his nine-figure severance package is difficult to answer. However, we can argue that he probably changed very little between 2004 when Fortune described him as a ‘turnaround genius’ and 2009 when he was fired. What changed was the performance of the organization he led. It’s not necessarily wrong to terminate a CEO for flagging financial performance. However, O’Neal’s story illustrates the power of the attribution approach to leadership: hero and genius when things are going well, villain when they aren’t. We make demographic assumptions about leaders. Respondents in a study assumed a leader described with no identifying racial information was white at a rate beyond the base rate of white employees in a company. In scenarios where identical leadership situations are described but the leaders’ race is manipulated, white leaders are rated as more effective than leaders of other racial groups.127 One large-scale summary study (a meta-analysis) found that many individuals hold stereo­ types of men as having more leader characteristics than women, although as you might expect, this tendency to equate leadership with masculinity has decreased over time.128 Other data suggest women’s perceived success as transformational leaders may be based on demographic characteristics. Teams prefer male leaders when aggressively competing against other teams, but they prefer female leaders when the competition is within teams and calls for improving positive relationships within the group.129 Attribution theory suggests what’s important is projecting the appearance of being a leader rather than focusing on actual accomplishments. Leader-wannabes who can shape the perception that they’re smart, personable, verbally adept, aggressive, hardworking and consistent in their style can increase the probability their bosses, colleagues and employees will view them as effective leaders.

Substitutes for and neutralizers of leadership substitutes Attributes, such as experience and training, that can replace the need for a leader’s support or ability to create structure. neutralizers Attributes that make it impossible for leader behaviour to make any difference to follower outcomes.

One theory of leadership suggests that in many situations leaders’ actions are irrelevant.130 Experience and training are among the substitutes that can replace the need for a leader’s support or ability to create structure. Recently, companies such as videogame producer Valve Corporation, Gore-Tex maker W. L. Gore, and collaboration-software firm GitHub have experimented with eliminating leaders and management. Governance in the ‘bossless’ work environment is achieved through accountability to co-workers, who determine team composition and even sometimes pay.131 Organizational characteristics such as explicit formalized goals, rigid rules and procedures, and cohesive work groups can replace formal leadership, while indifference to organizational rewards can neutralize its effects. Neutralizers make it impossible for leader behaviour to make any difference to follower outcomes (see Table 12.3). It’s simplistic to think employees are guided to goal accomplishments solely by the actions of their leaders. We’ve introduced a number of variables – such as attitudes, personality, ability

Finding and creating effective leaders   353

Table 12.3  Substitutes for and neutralizers of leadership Defining characteristic

Relationship-oriented leadership

Task-oriented leadership

Experience/training

No effect on

Substitutes for

Professionalism

Substitutes for

Substitutes for

Indifference to rewards

Neutralizes

Neutralizes

Highly structured task

No effect on

Substitutes for

Provides its own feedback

No effect on

Substitutes for

Intrinsically satisfying

Substitutes for

No effect on

Explicit formalized goals

No effect on

Substitutes for

Rigid rules and procedures

No effect on

Substitutes for

Cohesive work groups

Substitutes for

Substitutes for

Individual

Job

Organization

Source: Based on S. Kerr and J. M. Jermier, ‘Substitutes for leadership: their meaning and measurement’, Organizational Behavior and Human Performance, December 1978, p. 378.

and group norms – that affect employee performance and satisfaction. Leadership is simply another independent variable in our overall OB model. Sometimes the difference between substitutes and neutralizers is fuzzy. If I’m working on a task that’s intrinsically enjoyable, theory predicts leadership will be less important because the task provides motivation. But does that mean intrinsically enjoyable tasks neutralize leadership effects, or substitute for them, or both? Another problem is that while substitutes for leadership (such as employee characteristics, the nature of the task, etc.) matter to performance, that does not necessarily mean leadership doesn’t.132

Online leadership

identification-based trust Trust based on a mutual understanding of each other’s intentions and appreciation of each other’s wants and desires.

How do you lead people who are physically separated from you and with whom you communicate electronically? This question needs attention from OB researchers.133 Today’s managers and employees are increasingly linked by networks rather than geographic proximity. We propose that online leaders have to think carefully about what actions they want their digital messages to initiate. They confront unique challenges, the greatest of which appears to be developing and maintaining trust. Identification-based trust, based on a mutual understanding of each other’s intentions and appreciation of the other’s wants and desires, is particularly difficult to achieve without face-to-face interaction.134 Online negotiations can also be hindered because parties express lower levels of trust.135 We believe good leadership skills will soon include the ability to communicate support, trust and inspiration through electronic communication and to accurately read emotions in others’ messages. In electronic communication, writing skills are likely to become an extension of interpersonal skills.

Finding and creating effective leaders 9  Discuss how organizations can find or create effective leaders.

How can organizations find or create effective leaders? Let’s try to answer that question.

Selecting leaders The process organizations go through to fill management positions is an exercise in the identification of effective leaders. You might begin by reviewing the knowledge, skills and abilities needed to do the job effectively. Personality tests can identify traits associated with

354  12 Leadership

l­eadership – extroversion, conscientiousness and openness to experience. High self-­monitors are better at reading situations and adjusting their behaviour accordingly. Candidates with high emotional intelligence should have an advantage, especially in situations requiring transformational leadership.136 Experience is a poor predictor of leader effectiveness, but ­situation-specific experience is relevant. Because nothing lasts forever, the most important event an organization needs to plan for is a change in leadership. JCPenney recently hired a CEO with no department store experience who promptly changed its overall strategy, a manoeuvre so disastrous that Penney’s stock fell 69 per cent in the roughly one year he lasted (at which time Penney rehired the old CEO it had forced out). Organizations seem to spend no time on leadership succession and are surprised when their picks turn out poorly.

Training leaders Organizations spend billions of euros on leadership training and development.137 These take many forms, including executive leadership programmes offered by universities such as Harvard, Erasmus, Hull or INSEAD to sailing experiences offered by the Outward Bound programme. Business schools are placing renewed emphasis on leadership development. Some companies also place a lot of emphasis on leadership development. Goldman Sachs is well known for developing leaders; at one point, BusinessWeek called it the ‘Leadership Factory’.138 How can managers get the most from their leadership-training budgets? First, leadership training is likely to be more successful with high self-monitors. Such individuals have the flexibility to change their behaviour. Second, organizations can teach implementation skills. Third, we can teach skills such as trust building and mentoring. Leaders can be taught situational-analysis skills. They can learn how to evaluate situations, modify them to better fit their style and assess which leader behaviours might be most effective in given situations. BHP Billiton, Nokia and Adobe have hired coaches to help top executives one on one to improve their interpersonal skills and act less autocratically.139 Fourth, behavioural training through modelling exercises can increase an individual’s ability to exhibit charismatic leadership qualities. Recent research also indicates that leaders should engage in regularly reviewing their leadership after key organizational events as part of their development. These after-event reviews are especially effective for leaders who are high in conscientiousness and openness to experience, and who are emotionally stable (low in neuroticism).140 Finally, leaders can be trained in transformational leadership skills that have bottom-line results.

Leadership A cross-cultural study on leadership behaviours identified four clusters of countries with similar cultural profiles: Latin (Italy, France, Spain), Germanic (Germany and the Netherlands), Anglo (United Kingdom and the United States) and Nordic (Denmark, Norway and Sweden). A selection of results are presented below: ●

In all clusters inspiring followers was rated the most important behaviour to overall leadership effectiveness.

●

77 per cent of Nordic respondents indicated delegating behaviour was important for leadership effectiveness,

FACE THE FACTS compared with 50 per cent in the Germanic cluster and less than 50 per cent in the Anglo culture. ●

Team-building behaviours were valued by 68 per cent, 57 per cent and 56 per cent of Anglo, Latin and Germanic respondents, respectively. But was less important to Nordic respondents (less than 50 per cent).

Source: ‘Different cultures, similar perceptions: stereotyping of western European business leaders’, Catalyst and IMD (Switzerland) 2006, www.catalyst.org.

POINT/COUNTERPOINT   355

Summary Leadership plays a central part in understanding group behaviour because it’s the leader who usually directs us towards our goals. Knowing what makes a good leader should thus be valuable in improving group performance. The early search for a set of universal leadership traits failed. However, recent efforts using the Big Five personality framework show strong and consistent relationships between leadership and extroversion, conscientiousness and openness to experience. The behavioural approach’s major contribution was narrowing leadership into task-­ oriented (initiating structure) and people-oriented (consideration) styles. By considering the situation in which the leader operates, contingency theories promised to improve on the behavioural approach, but only LPC theory has fared well in leadership research. Research on charismatic, transformational and authentic leadership have made major contributions to our understanding of leadership effectiveness. However, the accepted beliefs about the value of leadership have been challenged.

IMPLICATIONS FOR MANAGERS ●

● ●

●

●

For management positions, hire candidates who exhibit transformational leadership qualities and who have demonstrated vision and charisma. Tests and interviews can help you identify people with leadership qualities. Hire candidates whom you believe are ethical and trustworthy for management roles and train current managers in your organization’s ethical standards in order to increase leadership effectiveness. Seek to develop trusting relationships with followers because, as organizations have become less stable and predictable, strong bonds of trust are replacing bureaucratic rules in defining expectations and relationships. Consider investing in leadership training such as formal courses, workshops, rotating job responsibilities, coaching and mentoring.

Leaders are born, not made

POINT/COUNTERPOINT

POINT That leaders are born, not made, isn’t a new idea. The ­nineteenth-century historian Thomas Carlyle wrote, ‘History is nothing but the biography of a few great men.’ Although today we should modify this to include women, his point still rings true: great leaders are what make teams, companies and even countries great. Can anyone disagree with the political gifts of people like Nelson Mandela and Franklin Roosevelt? Or that Napoleon and Alexander the Great were brilliant and courageous military leaders? Or that Indra Nooyi (PepsiCo), Sergio Marchionne (Fiat Chrysler) and Rupert Murdoch (News Corp) are gifted business leaders? As one reviewer of the literature put it, ‘Leaders are not like other people.’ These leaders are great leaders because they have the right stuff – stuff the rest of us don’t have, or have in lesser quantities. If you’re not yet convinced, there is new evidence to support this position. A recent study of several hundred identical twins

separated at birth found an amazing correlation in their ascendance into leadership roles. These twins were raised in totally different environments – some rich, some poor, some by educated parents, others by relatively uneducated parents, some in cities, others in small towns. But the researchers found that despite their different environments, each pair of twins had striking similarities in terms of whether they became leaders. Other research has found that shared environment – being raised in the same household, for example – has very little influence on leadership emergence. Despite what we might like to believe, the evidence is clear: a substantial part of leadership is a product of our genes. If we have the right stuff, we’re destined to be effective leaders. If we have the wrong stuff, we’re unlikely to excel in that role. Leadership cannot be for everyone, and we make a mistake in thinking that everyone is equally capable of being a good leader.141

356  12 Leadership

COUNTERPOINT Of course, personal qualities and characteristics matter to leadership, as they do to most other behaviours. But the real key is what you do with what you have. First, if great leadership were merely the possession of a few key traits – say intelligence and personality – we could simply give people a test and select the most intelligence, extroverted and conscientious people to be leaders. But that would be a disaster. It helps to have these traits, but leadership is much too complex to be reduced to a simple formula of traits. As smart as Richard Branson is, there are smarter and more extroverted people out there – thousands of them. That isn’t the essence of what makes him, or political or military leaders, great. It is a combination of factors – upbringing, early business experiences, learning from failure and driving ambition. Second, great leaders tell us that the key to their leadership success is not the characteristics they had at birth but what they learned along the way. Take Warren Buffett who is admired not only for his investing prowess but also as a leader and boss. Being a great leader, according to Buffett, is a matter of acquiring the right

habits. ‘The chains of habit are too light to be noticed until they are too heavy to be broken,’ he says. Buffett argues that characteristics or habits such as intelligence, trustworthiness and integrity are the most important to leadership – and at least the latter two can be developed. He says, ‘You need integrity, intelligence and energy to succeed. Integrity is totally a matter of choice – and it is habit-forming.’ Finally, this focus on ‘great men and great women’ is not very productive. Even if it were true that great leaders were born, it’s a very impractical approach to leadership. People need to believe in something, and one of those things is that they can improve themselves. If we walked around thinking we were just some accumulation of genetic markers and our entire life was just a vessel to play out gene expression, who would want to live that way? People have a choice to think positively (we can become good leaders) or negatively (leaders are predetermined), and it’s better to be positive. Source: M. Pandya, ‘Warren Buffett on investing and leadership: “I’m wired for this game” ’, Wharton Leadership Digest, 3, 7 (April 1999), http://leadership. wharton. upenn.edu/digest/04–99.shtml.

QUESTIONS FOR REVIEW 1. Are leadership and management different from one

another? If so, how? 2. What is the difference between trait and behavioural

theories? Are the theories valid? 3. What are the main limitations of behavioural theories

of leadership? 4. What is Fiedler’s contingency model? Has it been

supported in research?

5. How do charismatic and transformational leadership

compare and contrast? Are they valid? 6. What is authentic leadership? Why do ethics and trust

matter to leadership? 7. How is mentoring valuable to leadership? What are the

keys to effective mentoring? 8. How can organizations select and develop effective

leaders?

EXPERIENTIAL EXERCISE WHAT IS A LEADER? 1. Working on your own, write down 12 adjectives that

describe an effective business leader. 2. Break into groups of four or five people each. Appoint

a note-taker and spokesperson. Compare your lists, making a new list of adjectives common across two or more persons’ list. (Count synonyms – decisive and forceful, for example – as the same.)

3. Each spokesperson should present the group’s list to

the class. 4. Across the lists, are there many similarities? What does

this tell you about the nature of leadership?

ETHICAL DILEMMA REWARDS FOR FAILURE? Royal Bank of Scotland (RBS) recorded the biggest loss in British corporate history in 2008. The bank had made huge acquisitions at inflated prices, with

a depleted capital base and poor risk control. Shareholders saw their holdings almost wiped out. RBS survives owing to a government rescue costing some

case incident 1  357

€25 billion. The UK taxpayer now holds a stake of about 70 per cent. Yet RBS still paid annual bonuses to thousands of City staff. The payments ran into hundreds of millions of euros. Lord Mandelson, then Business Secretary, understandably declared: ‘They have got to consider how it looks and how it seems when those mistakes and losses have been made.’ It looks like a reward for grievous failure; and the appearance does not deceive. The real economy suffered from a crisis born in the financial sector. Demand and investment collapsed; household incomes were squeezed. The human costs were hardship, unemployment and eviction. This is not an isolated example and is not solely the province of the banking industry. Across Europe, political leaders expressed alarm at the soaring pay and bonuses of executives, often in the face of poor performance. Christine Lagarde (French Finance Minister at the time) branded pay for leaders of poorly performing companies ‘perfectly scandalous’ and warned of legislation if companies don’t set executive pay to reflect performance.

The right stuff: Jeff Bezos of Amazon For Amazon founder and CEO Jeff Bezos, the sky’s the limit – literally. Bezos’ private space firm Blue Origin recently burst into space – 45,000 feet above Texas at 1.2 Mach speed – when its unmanned rocket made a break for the stratosphere . . . and exploded into flames. If Bezos was discouraged about the expensive loss, he recovered quickly. In a blog post typical of the leadership approach that makes him Forbes’ number one CEO in America, he wrote: ‘Not the outcome any of us wanted, but we’re signed up for this to be hard, and the Blue Origin team is doing an outstanding job. We’re already working on our next development vehicle.’ Onward and upward seems to be Bezos’ credo. Amazon’s stock has recently rocketed up almost 400 per cent in five years, and his €50 billion personal net worth has made him one of the richest men in the world. Like Blue Origin’s flight path, the dot.com crash-and-burn era threatened the transformation of Amazon from online bookseller to retailing giant. While Amazon’s financial performance flatlined from mid-2003 to 2007, Bezos stayed true to his mission of service. He let customers dictate the specifications for Amazon products, sold them access to Amazon’s own software architecture, and launched Amazon Web Services to offer businesses cloud-based computer services. Investors noticed, and Amazon took off. A visionary leader, Bezos philosophically takes the long view on all his projects. ‘We are willing to be misunderstood for long periods of time,’ he says. Bezos’ unwavering dedication to driving the business by what the customer wants is legendary. It starts with the empty chair he pulls up to the conference table during meetings for ‘the most important person in the room’ – the customer. Employees and managers abide by his ‘culture of

Former Dutch Finance Minister Wouter Bos proposed a 30 per cent ‘fat cat’ tax increase on big bonuses and severance packages. Perhaps business leaders should follow the example of Willie Walsh, CEO at British Airways, who passed up a 2 million euro bonus due him for meeting an earnings target. Walsh was paying penance for the botched opening of the big new BA Terminal 5 at London Heathrow.

Questions 1. If you were an employee of the RBS, would you accept a

bonus? 2. Does the fact that Willie Walsh turned down his bonus

make him a better leader? 3. How ethical do you believe business leaders are? 4. Is it impossible for leaders to be both ethical and

successful? Sources: Based on ‘Reward for failure: RBS’s bonuses demonstrate that pay and performance must be better aligned’, The Times, 6 February 2009, p. 2; J. Stinson, ‘As CEO pay in Europe rises, so does talk of curbing it’, USA Today, 30 June 2008.

CASE INCIDENT 1 metrics’ that tracks company performance against 500 goals to provide data-driven customer service. Bezos requires managers to attend yearly call-centre training to better understand the company’s 164 million customers, which he also attends. And he reads his customer emails. ‘We’re not satisfied until [customer satisfaction] is 100 per cent,’ he says. As the leader of 56,000 employees, Bezos focuses on hiring good people. ‘I’d rather interview 50 people and not hire anyone than hire the wrong person,’ he says. He empowers employees to solve the challenges customers face, which resulted in the worldwide success of the Kindle e-reader, for instance. Bezos respects the metrics employees present, saying, ‘The great thing about fact-based decisions is that they overrule the hierarchy. The most junior person in the company can win an argument with the most senior person with regard to a fact-based decision. For intuitive decisions .  .  . you have to rely on experienced executives who’ve honed their instincts.’ And he works alongside his employees, earning a modest salary of €90,000 while hoping for that big stock payoff (a strategy that has paid off), practising frugality, constantly critiquing, being self-reliant and laughing a lot. He expects of others what he expects of himself. In these ways, Bezos may be the ultimate servant leader. As we discussed in this chapter, servant leaders look beyond their own self-interests. They have ethical standards they impose on themselves as well as others, and they are not narcissistic: they feel rewarded by creating benefit, not just by receiving personal rewards. Research suggests that company founders are often servant leaders, and that CEO servant leadership predicts corporate financial performance.

358  12 Leadership

Generally, exceptional leaders manage to be exceptional at one role – a visionary like Chipotle CEO Steve Ells, or a servant leader like Japan Airlines CEO Haruka Nishimatsu, for instance. Jeff Bezos appears to have mastered both. Sources: G. Anders, ‘Jeff Bezos gets it’, Forbes, 23 April 2012, pp. 76–86; J. Greathouse, ‘5 time-tested success tips from Amazon founder Jeff Bezos’, Forbes, 30 April 2013, www.forbes.com/sites/johngreathouse/2013/04/30/5-time-tested-success-tipsfrom-amazon-founder-jeff-bezos/2/; C. O’Connor, ‘Jeff Bezos’ spacecraft blows up in secret test flight; locals describe “Challenger-like” explosion’, Forbes, 2 September 2011, www.forbes.com/sites/clareoconnor/2011/09/02/jeff-bezos-spacecraft-blows-up-insecret-test-flight-locals-describe-challenger-like-explosion/2/; and S. J. Peterson, B. M. Galvin and D. Lane, ‘CEO servant leadership: exploring executive characteristics and firm performance’, Personnel Psychology, 65 (2012), pp. 565–96.

Questions 1. Based on the article, describe the traits and behaviours of Bezos.

2. It is claimed Bezos may be the ‘ultimate servant leader’. Does your description agree with this?

3. What other leadership theories might fit Bezos? 4. Bezos founded Amazon in 1994 and has led it ever since. In 2013 he bought the Washington Post newspaper. Evaluate whether Bezos’s past success at Amazon will help in leading this venture.

Who makes the best leaders: Europeans or North Americans? A debate at Ashridge business school looked at what makes for successful leadership in European companies and organizations – particularly in comparison to their North ­ American counterparts, from which so many of today’s leadership models have emerged. Here are a selection of responses:

Kai Peters, Chief Executive, Ashridge European leaders tend to be consultative, patient – working with the organization rather than telling it what to do – and very aware of the environment in which they work. There’s a breadth of need to understand, and successful European leaders have a solid grasp of culture in the broader sense – including history and politics – and a good ability to empathize with the audience they are working with. You have to have something of the chameleon about you. The North American leader is driven by the homogeneity of the market.

Erik Swartz, Managing Director, Stockholm Centre for Management Development Why focus on commonalities? It goes with the whole idea of the EU. We have an area in Europe that we are trying to organize into some federal system. Compared with federalism in the US, they have 50 states and a lot of forces that make it easy to act together in unity. In Europe, we have to establish that way of thinking.

Atle Jordahl, Director of International Relations, Norwegian School of Economics and Business Even if it can be difficult to find a common denominator for European leadership, I think that we have one important thing in common. That is the concern for the US management style. I am particularly thinking of the ‘one strong man’ approach to leadership that is coming out of US government, companies and business schools; the lack of respect for context that many US companies and leaders communicate to others.

CASE INCIDENT 2

In Europe, we are used to living with multiple realities due to our long history with conflicts over territories, religions, ethnicity and ideologies; and the one-dimensional approach to life and business with a strong focus on profit. As central and eastern European countries move into the market economy, they have to ‘choose’ between a US or a western European leadership approach.

George Binney, co-author, Living Leadership – A Practical Guide for Ordinary Heroes European leaders don’t ‘put it up on the wall’. They don’t immediately say: ‘These are the values, this is who we are.’ It’s a more understated, modest way of leading, and there’s clearly something very important about a sense of history. The Americans can talk confidently about charismatic leadership in a way that Europeans can’t because of that history. So much of what we hear on business and organizations comes out of US business schools. Where’s the European voice here? Even though there has been a shift to the ‘quiet hero’, the focus is still on individuals who ‘do’ to organizations.

Rick Woodward, European Learning and ­Development Director, Kimberly-Clark Europe Kimberly-Clark has recently conducted a major survey of all its senior leaders across the world, and found no statistically significant differences between European and North American responses. This year, we launched six global ­ ­leadership qualities: visionary, building talent, decisiveness, collaboration, inspirational and innovative. We’ve assessed the top 90 leaders across the globe against these qualities and designed personal action plans. Whereas the US has a one-size-fits-all approach, Europe is very much about diversity and difference. US leadership likes simple, big ideas and they tend to skate over details, whereas in Europe, we tend to think the devil’s in the detail.

endnotes  359

And the whole approach to decision making in the US is very much ‘tell and sell’, whereas in Europe it is ‘argue and agree’ – although in the case of the English it’s more like ‘debate and hesitate’.

2. On which points do the above contributors agree and

Questions

4. What challenges does this present for leadership develop-

disagree about the differences between European and US leaders?

3. Would a successful European leader be successful in the US? Why or why not?

1. Do you think there is a common approach to leadership that would be effective across Europe? Explain.

ment in global organizations? Source: ‘Who makes the best leaders?’, Personnel Today, 1 June 2005.

ENDNOTES   1 J. G. Geier, ‘A trait approach to the study of leadership in small groups’, Journal of Communication, December 1967, pp. 316–23.   2 S. A. Kirkpatrick and E. A. Locke, ‘Leadership: do traits matter?’, Academy of Management Executive, May 1991, pp. 48–60; and S. J. Zaccaro, R. J. Foti and D. A. Kenny, ‘Self-monitoring and trait-based variance in leadership: an investigation of leader flexibility across multiple group situations’, Journal of Applied Psychology, April 1991, pp. 308–15.  3 ‘Sky News Richard Branson tops “most admired” boss poll’, 21 September 2014, http://news.sky.com/story/1339457/richardbranson-tops-most-admired-boss-poll. Accessed 16/4/2015.   4 See T. A. Judge, J. E. Bono, R. Ilies and M. Werner, ‘Personality and leadership: a review’, paper presented at the 15th Annual Conference of the Society for Industrial and Organizational Psychology, New Orleans, 2000; and T. A. Judge, J. E. Bono, R. Ilies and M. W. Gerhardt, ‘Personality and leadership: a qualitative and quantitative review’, Journal of Applied Psychology, August 2002, pp. 765–80.   5 Judge, Bono, Ilies and Gerhardt, ‘Personality and leadership’.   6 D. R. Ames and F. J. Flynn, ‘What breaks a leader: the curvilinear relation between assertiveness and leadership’, Journal of Personality and Social Psychology, 92, 2 (2007), pp. 307–24.

11 N. Ensari, R. E. Riggio, J. Christian and G. Carslaw, ‘Who emerges as a leader? Meta-analyses of individual differences as predictors of leadership emergence’, Personality and Individual Differences, September 2011, pp. 532–36. 12 R. M. Stogdill and A. E. Coons (eds), Leader Behavior: Its Description and Measurement, Research Monograph no. 88 (Columbus: Ohio State University, Bureau of Business Research, 1951). This research is updated in C. A. Schriesheim, C. C. Cogliser and L. L. Neider, ‘Is it “trustworthy”? A multiple-levels-of-analysis reexamination of an Ohio state leadership study, with implications for future research’, Leadership Quarterly, Summer 1995, pp. 111–45; and T. A. Judge, R. F. Piccolo and R. Ilies, ‘The forgotten ones? The validity of consideration and initiating structure in leadership research’, Journal of Applied Psychology, February 2004, pp. 36–51. 13 D. Akst, ‘The rewards of recognizing a job well done’, Wall Street Journal, 31 January 2007, p. D9. 14 Judge, Piccolo and Ilies, ‘The Forgotten Ones?’ 15 M. Javidan, P. W. Dorfman, M. S. de Luque and R. J. House, ‘In the eye of the beholder: cross-cultural lessons in leadership from Project GLOBE’, Academy of Management Perspectives, February 2006, pp. 67–90.

  7 This section is based on J. M. George, ‘Emotions and leadership: the role of emotional intelligence’, Human Relations, August 2000, pp. 1027–55; C.-S. Wong and K. S. Law, ‘The effects of leader and follower emotional intelligence on performance and attitude: an exploratory study’, Leadership Quarterly, June 2002, pp. 243–74; and J. Antonakis, N. M. Ashkanasy and M. T. Dasborough, ‘Does leadership need emotional intelligence?’, Leadership Quarterly, 20 (2009), pp. 247–61.

16 F. E. Fiedler, A Theory of Leadership Effectiveness (New York: McGraw-Hill, 1967).

  8 R. H. Humphrey, J. M. Pollack and T. H. Hawver, ‘Leading with emotional labor’, Journal of Managerial Psychology, 23 (2008), pp. 151–68; J. Antonakis, ‘Why “emotional intelligence” does not predict leadership effectiveness: a comment on Prati, Douglas, Ferris, Ammeter, and Buckley (2003)’, International Journal of Organizational Analysis, 11 (2003), pp. 355–61; see also M. Zeidner, G. Matthews and R. D. Roberts, ‘Emotional intelligence in the workplace: a critical review’, Applied Psychology: An International Review, 53 (2004), pp. 371–99.

19 Cited in R. J. House and R. N. Aditya, ‘The social scientific study of leadership’, Journal of Management, 23, 3 (1997), p. 422.

  9 F. Walter, M. S. Cole and R. H. Humphrey, ‘Emotional intelligence: sine qua non of leadership or folderol?’, Academy of Management Perspectives, February 2011, pp. 45–59. 10 S. Côté, P. N. Lopez, P. Salovey and C. T. H. Miners, ‘Emotional intelligence and leadership emergence in small groups’, Leadership Quarterly, 21 (2010), pp. 496–508.

17 S. Shiflett, ‘Is there a problem with the LPC score in leader match?’, Personnel Psychology, Winter 1981, pp. 765–9. 18 F. E. Fiedler, M. M. Chemers and L. Mahar, Improving Leadership Effectiveness: The Leader Match Concept (New York: Wiley, 1977).

20 L. H. Peters, D. D. Hartke and J. T. Pohlmann, ‘Fiedler’s contingency theory of leadership: an application of the meta-analysis procedures of Schmidt and Hunter’, Psychological Bulletin, March 1985, pp. 274–85; C. A. Schriesheim, B. J. Tepper and L. A. Tetrault, ‘Least preferred coworker score, situational control, and leadership effectiveness: a meta-analysis of contingency model performance predictions’, Journal of Applied Psychology, August 1994, pp. 561–73; and R. Ayman, M. M. Chemers and F. Fiedler, ‘The contingency model of leadership effectiveness: its levels of analysis’, Leadership Quarterly, Summer 1995, pp. 147–67. 21 House and Aditya, ‘The social scientific study of leadership’, p. 422.

360  12 Leadership 22 See, for instance, R. W. Rice, ‘Psychometric properties of the esteem for the least preferred coworker (LPC) scale’, Academy of Management Review, January 1978, pp. 106–18; C. A. Schriesheim, B. D. Bannister and W. H. Money, ‘Psychometric properties of the LPC scale: an extension of Rice’s review’, Academy of Management Review, April 1979, pp. 287–90; and J. K. Kennedy, J. M. Houston, M. A. Korgaard and D. D. Gallo, ‘Construct space of the least preferred coworker (LPC) scale’, Educational & Psychological Measurement, Autumn 1987, pp. 807–14. 23 See E. H. Schein, Organizational Psychology, 3rd edn (Upper Saddle River, NJ: Prentice-Hall, 1980), pp. 116–17; and B. Kabanoff, ‘A critique of leader match and its implications for leadership research’, Personnel Psychology, Winter 1981, pp. 749–64. 24 See, for instance, ibid., pp. 67–84; C. L. Graeff, ‘Evolution of situational leadership theory: a critical review’, Leadership Quarterly, 8, 2 (1997), pp. 153–70; and R. P. Vecchio and K. J. Boatwright, ‘Preferences for idealized styles of supervision’, Leadership Quarterly, August 2002, pp. 327–42. 25 R. J. House, ‘A path–goal theory of leader effectiveness’, Administrative Science Quarterly, September 1971, pp. 321–38; R. J. House and T. R. Mitchell, ‘Path–goal theory of leadership’, Journal of Contemporary Business, Autumn 1974, pp. 81–97; and R. J. House, ‘Path–goal theory of leadership: lessons, legacy, and a reformulated theory’, Leadership Quarterly, Autumn 1996, pp. 323–52. 26 A. E. Colbert and L. A. Witt, ‘The role of goal-focused leadership in enabling the expression of conscientiousness’, Journal of Applied Psychology, 94, 3 (2009), pp. 790–6. 27 S. J. Perry, L. A. Witt, L. M. Penney and L. Atwater, ‘The downside of goal-focused leadership: the role of personality in subordinate exhaustion’, Journal of Applied Psychology, 95, 6 (2010), pp. 1145–53. 28 See V. H. Vroom and P. W. Yetton, Leadership and DecisionMaking (Pittsburgh: University of Pittsburgh Press, 1973); and V. H. Vroom and A. G. Jago, ‘The role of the situation in leadership’, American Psychologist, January 2007, pp. 17–24. 29 W. Bennis, ‘The challenges of leadership in the modern world’, American Psychologist, January 2007, pp. 2–5. 30 X. Zhou and C. A. Schriesheim, ‘Supervisor–subordinate convergence in descriptions of leader–member exchange (LMX) quality: review and testable propositions’, Leadership Quarterly, 20, 6 (2009), pp. 920–32; G. B. Graen and M. Uhl-Bien, ‘Relationship-based approach to leadership: development of leader– member exchange (LMX) theory of leadership over 25 years: applying a multi-domain perspective’, Leadership Quarterly, Summer 1995, pp. 219–47; R. C. Liden, R. T. Sparrowe and S. J. Wayne, ‘Leader–member exchange theory: the past and potential for the future’, in G. R. Ferris (ed.), Research in Personnel and Human Resource Management, vol. 15 (Greenwich, CT: JAI Press, 1997), pp. 47–119; and C. A. Schriesheim, S. L. Castro, X. Zhou and F. J. Yammarino, ‘The folly of theorizing ‘A’ but testing ‘B’: a selective level-of-analysis review of the field and a detailed leader–member exchange illustration’, Leadership Quarterly, Winter 2001, pp. 515–51. 31 B. Erdogan and T. N. Bauer, ‘Differentiated leader–member exchanges: the buffering role of justice climate’, Journal of Applied Psychology, 95, 6 (2010), pp. 1104–20; R. C. Liden, S. J. Wayne and D. Stilwell, ‘A longitudinal study of the early development of leader–member exchanges’, Journal of Applied Psychology, August 1993, pp. 662–74; S. J. Wayne, L. M. Shore, W. H. Bommer and L. E. Tetrick, ‘The role of fair treatment and

rewards in perceptions of organizational support and leader– member exchange’, Journal of Applied Psychology, 87, 3 (June 2002), pp. 590–8; and S. S. Masterson, K. Lewis and B. M. Goldman, ‘Integrating justice and social exchange: the differing effects of fair procedures and treatment on work relationships’, Academy of Management Journal, 43, 4 (August 2000), pp. 738–48. 32 D. Duchon, S. G. Green and T. D. Taber, ‘Vertical dyad linkage: a longitudinal assessment of antecedents, measures, and consequences’, Journal of Applied Psychology, February 1986, pp. 56–60; Liden, Wayne and Stilwell, ‘A longitudinal study on the early development of leader–member exchanges’; and M. Uhl-Bien, ‘Relationship development as a key ingredient for leadership development’, in S. E. Murphy and R. E. Riggio (eds), Future of Leadership Development (Mahwah, NJ: Lawrence Erlbaum, 2003), pp. 129–47. 33 R. Vecchio and D. M. Brazil, ‘Leadership and sex-similarity: a comparison in a military setting’, Personnel Psychology, 60 (2007), pp. 303–35. 34 See, for instance, C. R. Gerstner and D. V. Day, ‘Meta-analytic review of leader–member exchange theory: correlates and construct issues’, Journal of Applied Psychology, December 1997, pp. 827–44; R. Ilies, J. D. Nahrgang and F. P. Morgeson, ‘Leader–member exchange and citizenship behaviors: a meta-analysis’, Journal of Applied Psychology, 92, 1 (2007), pp. 269–77; Z. Chen, W. Lam and J. A. Zhong, ‘Leader–member exchange and member performance: a new look at individual-level negative feedback-seeking behavior and team-level empowerment culture’, Journal of Applied Psychology, 92, 1 (2007), pp. 202–12. 35 D. Eden, ‘Leadership and expectations: pygmalion effects and other self-fulfilling prophecies in organizations’, Leadership Quarterly, Winter 1992, pp. 278–9. 36 B. Erdogan and T. N. Bauer, ‘Differentiated leader–member exchanges: the buffering role of justice climate’, Journal of Applied Psychology, 95, 6 (2010), pp. 1104–20. 37 M. Ozer, ‘Personal and task-related moderators of leader– member exchange among software developers’, Journal of Applied Psychology, 93, 5 (2008), pp. 1174–82. 38 M. Weber, The Theory of Social and Economic Organization, A. M. Henderson and T. Parsons (trans.), (New York: The Free Press, 1947). 39 J. A. Conger and R. N. Kanungo, ‘Behavioral dimensions of charismatic leadership’, in J. A. Conger, R. N. Kanungo and Associates (eds), Charismatic Leadership (San Francisco: Jossey-Bass, 1988), p. 79; and A.-K. Samnani and P. Singh, ‘When leaders victimize: the role of charismatic leaders in facilitating group pressures’, Leadership Quarterly, pp. 189–202. 40 J. A. Conger and R. N. Kanungo, Charismatic Leadership in Organizations (Thousand Oaks, CA: Sage, 1998); and R. Awamleh and W. L. Gardner, ‘Perceptions of leader charisma and effectiveness: the effects of vision content, delivery, and organizational performance’, Leadership Quarterly (Fall 1999), pp. 345–73. 41 Based on J. A. Conger and R. N. Kanungo, Charismatic Leadership in Organizations (Thousand Oaks, CA: Sage, 1998), p. 94. 42 R. J. House and J. M. Howell, ‘Personality and charismatic leadership’, Leadership Quarterly, 3 (1992), pp. 81–108; D. N. Den Hartog and P. L. Koopman, ‘Leadership in organizations’, in N. Anderson and D. S. Ones (eds), Handbook of Industrial, Work and Organizational Psychology, vol. 2 (Thousand Oaks, CA: Sage, 2002), pp. 166–87.

endnotes  361 43 P. Balkundi, M. Kilduff and D. A. Harrison, ‘Centrality and charisma: comparing how leader networks and attributions affect team performance’, Journal of Applied Psychology, 96 (2012), pp. 1209–22.

54 B. M. Bass, ‘Leadership: good, better, best’, Organizational Dynamics, Winter 1985), pp. 26–40; and J. Seltzer and B. M. Bass, ‘Transformational leadership: beyond initiation and consideration’, Journal of Management, December 1990, pp. 693–703.

44 D. N. Den Hartog, A. H. B. De Hoogh and A. E. Keegan, ‘The interactive effects of belongingness and charisma on helping and compliance’, Journal of Applied Psychology, 92, 4 (2007), pp. 1131–39.

55 T. R. Hinkin and C. A. Schriescheim, ‘An examination of “nonleadership”: from laissez-faire leadership to leader reward omission and punishment omission’, Journal of Applied Psychology, 93, 6 (2008), pp. 1234–48.

45 A. Erez, V. F. Misangyi, D. E. Johnson, M. A. LePine and K. C. Halverson, ‘Stirring the hearts of followers: charismatic leadership as the transferal of affect’, Journal of Applied Psychology, 93, 3 (2008), pp. 602–15. For reviews on the role of vision in leadership, see S. J. Zaccaro, ‘Visionary and inspirational models of executive leadership: empirical review and evaluation’, in S. J. Zaccaro (ed.), The Nature of Executive Leadership: A Conceptual and Empirical Analysis of Success (Washington, DC: American Psychological Association, 2001), pp. 259–78; and M. Hauser and R. J. House, ‘Lead through vision and values’, in E. A. Locke (ed.), Handbook of Principles of Organizational Behavior (Malden, MA: Blackwell, 2004), pp. 257–73. 46 A. H. B. de Hoogh, D. N. Den Hartog, P. L. Koopman, H. Thierry, P. T. van den Berg and J. G. van der Weide, ‘Charismatic leadership, environmental dynamism, and performance’, European Journal of Work & Organizational Psychology, December 2004, pp. 447–71; S. Harvey, M. Martin and D. Stout, ‘Instructor’s transformational leadership: university student attitudes and ratings’, Psychological Reports, April 2003, pp. 395–402; and D. A. Waldman, M. Javidan and P. Varella, ‘Charismatic leadership at the strategic level: a new application of upper echelons theory’, Leadership Quarterly, June 2004, pp. 355–80. 47 J. C. Pastor, M. Mayo and B. Shamir, ‘Adding fuel to fire: the impact of followers’ arousal on ratings of charisma’, Journal of Applied Psychology, 92, 6 (2007), pp. 1584–96. 48 A. H. B. De Hoogh and D. N. Den Hartog, ‘Neuroticism and locus of control as moderators of the relationships of charismatic and autocratic leadership with burnout’, Journal of Applied Psychology, 94, 4 (2009), pp. 1058–67. 49 F. Cohen, S. Solomon, M. Maxfield, T. Pyszczynski and J. Greenberg, ‘Fatal attraction: the effects of mortality salience on evaluations of charismatic, task-oriented, and relationship-oriented leaders’, Psychological Sciences, December 2004, pp. 846–51; and M. G. Ehrhart and K. J. Klein, ‘Predicting followers’ preferences for charismatic leadership: the influence of follower values and personality’, Leadership Quarterly, Summer 2001, pp. 153–79. 50 See, for instance, R. Khurana, Searching for a Corporate Savior: The Irrational Quest for Charismatic CEOs (Princeton, NJ: Princeton University Press, 2002); and J. A. Raelin, ‘The myth of charismatic leaders’, Training & Development, March 2003, pp. 47–54. 51 B. M. Galvin, D. A. Waldman and P. Balthazard, ‘Visionary communication qualities as mediators of the relationship between narcissism and attributions of leader charisma’, Personnel Psychology, 63, 3 (2010), pp. 509–37. 52 See, for instance, B. M. Bass, B. J. Avolio, D. I. Jung and Y. Berson, ‘Predicting unit performance by assessing transformational and transactional leadership’, Journal of Applied Psychology, April 2003, pp. 207–18; and T. A. Judge and R. F. Piccolo, ‘Transformational and transactional leadership: a meta-analytic test of their relative validity’, Journal of Applied Psychology, October 2004, pp. 755–68. 53 A. M. Grant, ‘Leading with meaning: beneficiary contact, prosocial impact, and the performance effects of transformational leadership’, Academy of Management Journal, 55 (2012), pp. 458–76.

56 S. J. Shin and J. Zhou, ‘Transformational leadership, conservation, and creativity: evidence from Korea’, Academy of Management Journal, December 2003, pp. 703–14; V. J. García-Morales, F. J. Lloréns-Montes and A. J. Verdú-Jover, ‘The effects of transformational leadership on organizational performance through knowledge and innovation’, British Journal of Management, 19, 4 (2008), pp. 299–313; and S. A. Eisenbeiss, D. van Knippenberg and S. Boerner, ‘Transformational leadership and team innovation: integrating team climate principles’, Journal of Applied Psychology, 93, 6 (2008), pp. 1438–46. 57 Y. Ling, Z. Simsek, M. H. Lubatkin and J. F. Veiga, ‘Transformational leadership’s role in promoting corporate entrepreneurship: examining the CEO-TMT interface’, Academy of Management Journal, 51, 3 (2008), pp. 557–76. 58 X. Zhang and K. M. Bartol, ‘Linking empowering leadership and employee creativity: the influence of psychological empowerment, intrinsic motivation, and creative process engagement’, Academy of Management Journal, 53, 1 (2010), pp. 107–28. 59 D. Liu, H. Liao and R. Loi, ‘The dark side of leadership: a threelevel investigation of the cascading effect of abusive supervision on employee creativity’, Academy of Management Journal, 55 (2012), pp. 1187–212. 60 A. E. Colbert, A. E. Kristof-Brown, B. H. Bradley and M. R. Barrick, ‘CEO transformational leadership: the role of goal importance congruence in top management teams’, Academy of Management Journal, 51, 1 (2008), pp. 81–96. 61 F. O. Walumbwa, B. J. Avolio and W. Zhu, ‘How transformational leadership weaves its influence on individual job performance: the role of identification and efficacy beliefs’, Personnel Psychology, 61, 4 (2008), pp. 793–825. 62 J. E. Bono and T. A. Judge, ‘Self-concordance at work: toward understanding the motivational effects of transformational leaders’, Academy of Management Journal, October 2003, pp. 554–71; Y. Berson and B. J. Avolio, ‘Transformational leadership and the dissemination of organizational goals: a case study of a telecommunication firm’, Leadership Quarterly, October 2004, pp. 625–46; and J. Schaubroeck, S. S. K. Lam and S. E. Cha, ‘Embracing transformational leadership: team values and the impact of leader behavior on team performance’, Journal of Applied Psychology, 92, 4 (2007), pp. 1020–30. 63 J. R. Baum, E. A. Locke and S. A. Kirkpatrick, ‘A longitudinal study of the relation of vision and vision communication to venture growth in entrepreneurial firms’, Journal of Applied Psychology, February 2000, pp. 43–54. 64 R. T. Keller, ‘Transformational leadership, initiating structure, and substitutes for leadership: a longitudinal study of research and development project team performance’, Journal of Applied Psychology, 91, 1 (2006), pp. 202–10. 65 Y. Gong, J. Huang and J. Farh, ‘Employee learning orientation, transformational leadership, and employee creativity: the mediating role of employee creative self-efficacy’, Academy of Management Journal, 52, 4 (2009), pp. 765–78. 66 G. Wang, I. Oh, S. H. Courtright and A. E. Colbert, ‘Transformational leadership and performance across criteria and levels: a

362  12 Leadership meta-analytic review of 25 years of research’, Group and Organization Management, 36, 2 (2011), pp. 223–70. 67 Y. Ling, Z. Simsek, M. H. Lubatkin and J. F. Veiga, ‘The impact of transformational CEOs on the performance of small- to medium-sized firms: does organizational context matter?’, Journal of Applied Psychology, 93, 4 (2008), pp. 923–34. 68 Schaubroeck, Lam and Cha, ‘Embracing transformational ­leadership’. 69 B. L. Kirkman, G. Chen, J. Farh, Z. X. Chen and K. B. Lowe, ‘Individual power distance orientation and follower reactions to transformational leaders: a cross-level, cross-cultural examination’, Academy of Management Journal, 52, 4 (2009), pp. 744–64. 70 J. Liu, O. Siu and K. Shi, ‘Transformational leadership and employee well-being: the mediating role of trust in the leader and self-efficacy’, Applied Psychology: An International Review, 59, 3 (2010), pp. 454–79. 71 X. Wang and J. M. Howell, ‘Exploring the dual-level effects of transformational leadership on followers’, Journal of Applied Psychology, 95, 6 (2010), pp. 1134–144. 72 H. Hetland, G. M. Sandal and T. B. Johnsen, ‘Burnout in the information technology sector: does leadership matter?’, European Journal of Work and Organizational Psychology, 16, 1 (2007), pp. 58–75; and K. B. Lowe, K. G. Kroeck and N. Sivasubramaniam, ‘Effectiveness correlates of transformational and transactional leadership: a meta-analytic review of the MLQ literature’, Leadership Quarterly, Autumn 1996, pp. 385–425. 73 R. J. House, M. Javidan, P. Hanges and P. Dorfman, ‘Understanding cultures and implicit leadership theories across the globe: an introduction to Project GLOBE’, Journal of World Business, Spring 2002, pp. 3–10. 74 D. E. Carl and M. Javidan, ‘Universality of charismatic leadership: a multi-nation study’, paper presented at the National Academy of Management Conference, Washington, DC, August 2001, p. 29. 75 See B. J. Avolio, W. L. Gardner, F. O. Walumbwa, F. Luthans and D. R. May, ‘Unlocking the mask: a look at the process by which authentic leaders impact follower attitudes and behaviors’, Leadership Quarterly, December 2004, pp. 801–23; W. L. Gardner and J. R. Schermerhorn Jr, ‘Performance gains through positive organizational behavior and authentic leadership’, Organiz­ ational Dynamics, August 2004, pp. 270–81; and M. M. Novicevic, M. G. Harvey, M. R. Buckley, J. A. Brown-Radford and R. Evans, ‘Authentic leadership: a historical perspective’, Journal of Leadership and Organizational Behavior, 13, 1 (2006), pp. 64–76. 76 C. Tan, ‘CEO pinching Penney in a slowing economy’, Wall Street Journal, 31 January 2008, pp. 1–2; and A. Carter, ‘Lighting a fire under Campbell’, BusinessWeek, 4 December 2006, pp. 96–101. 77 K. M. Hmieleski, M. S. Cole, and R. A. Baron, ‘Shared authentic leadership and new venture performance’, Journal of Management (September 2012), pp. 1476–99. 78 R. Ilies, F. P. Morgeson, and J. D. Nahrgang, ‘Authentic leadership and eudaemonic well-being: understanding leader-follower outcomes’, Leadership Quarterly, 16 (2005), pp. 373–94; B. Levin, ‘Raj Rajaratnam did not appreciate Rajat Gupta’s attempt to leave the Goldman Board, join “the billionaire circle”, NetNet with John Carney (March 14, 2011), downloaded 26 July 2011 from www.cnbc.com. 79 This section is based on E. P. Hollander, ‘Ethical challenges in the leader–follower relationship’, Business Ethics Quarterly (January 1995), pp. 55–65; J. C. Rost, ‘Leadership: a discussion about ethics’, Business Ethics Quarterly (January 1995), pp. 129–42; L. K. Treviño, M. Brown and L. P. Hartman, ‘A qualitative inves-

tigation of perceived executive ethical leadership: perceptions from inside and outside the executive suite’, Human Relations (January 2003), pp. 5–37; and R. M. Fulmer, ‘The challenge of ethical leadership’, Organizational Dynamics 33, no. 3 (2004), pp. 307–17. 80 J. Stouten, M. van Dijke and D. De Cremer, ‘Ethical leadership: an overview and future perspectives’, Journal of Personnel Psychology, 11 (2012), pp. 1–6. 81 D. van Knippenberg, D. De Cremer and B. van Knippenberg, ‘Leadership and fairness: the state of the art’, European Journal of Work and Organizational Psychology, 16, 2 (2007), pp. 113–40. 82 B. P. Owens and D. R. Hekman, ‘Modeling how to grow: an inductive examination of humble leader behaviors, contingencies, and outcomes’, Academy of Management Journal, 55 (2012), pp. 787–818. 83 K. M. Kacmar, D. G. Bachrach, K. J. Harris, and S. Zivnuska, ‘Fostering good citizenship through ethical leadership: exploring the moderating role of gender and organizational politics’, Journal of Applied Psychology, 96, 3 (May 2011), pp. 633–42; and F. O. Walumbwa and J. Schaubroeck, ‘Leader personality traits and employee voice behavior: mediating roles of ethical leadership and work group psychological safety’, Journal of Applied Psychology, 94, no. 5 (2009), pp. 1275–86. 84 D. M. Mayer, K. Aquino, R. L. Greenbaum and M. Kuenzi, ‘Who displays ethical leadership, and why does it matter? An examination of antecedents and consequences of ethical leadership’, Academy of Management Journal, 55 (2012), pp. 151–71. 85 S. A. Eisenbeiss and S. R. Giessner, ‘The emergence and maintenance of ethical leadership in organizations’, Journal of Personnel Psychology, 11 (2012), pp. 7–19. 86 M. E. Brown and L. K. Treviño, ‘Socialized charismatic leadership, values congruence, and deviance in work groups’, Journal of Applied Psychology, 91, 4 (2006), pp. 954–62. 87 M. E. Brown and L. K. Treviño, ‘Leader­–follower values congruence: are socialized charismatic leaders better able to achieve it?’, Journal of Applied Psychology, 94, 2 (2009), pp. 478–90. 88 D. van Dierendonck, ‘Servant leadership: a review and synthesis’, Journal of Management, 37, 4 (2011), pp. 1228–61. 89 S. J. Peterson, F. M. Galvin and D. Lange, ‘CEO servant leadership: exploring executive characteristics and firm performance’, Personnel Psychology, 65 (2012), pp. 565–96. 90 F. Walumbwa, C. A. Hartnell and A. Oke, ‘Servant leadership, procedural justice climate, service climate, employee attitudes, and organizational citizenship behavior: a cross-level investigation’, Journal of Applied Psychology, 95, 3 (2010), pp. 517–29. 91 D. De Cremer, D. M. Mayer, M. van Dijke, B. C. Schouten and M. Bardes, ‘When does self-sacrificial leadership motivate prosocial behavior? It depends on followers’ prevention focus’, Journal of Applied Psychology, 4 (2009), pp. 887–99. 92 J. Hu and R. C. Liden, ‘Antecedents of team potency and team effectiveness: an examination of goal and process clarity and servant leadership’, Journal of Applied Psychology, 96, 4 (July 2011), pp. 851–62. 93 M. J. Neubert, K. M. Kacmar, D. S. Carlson, L. B. Chonko and J. A. Roberts, ‘Regulatory focus as a mediator of the influence of initiating structure and servant leadership on employee behavior’, Journal of Applied Psychology, 93, 6 (2008), pp. 1220–33. 94 T. Menon, J. Sim, J. Ho-Ying Fu, C. Chiu and Y. Hong, ‘Blazing the trail versus trailing the group: culture and perceptions of the leader’s position’, Organizational Behavior and Human Decision Processes, 113, 1 (2010), pp. 51–61.

endnotes  363   95 D. M. Rousseau, S. B. Sitkin, R. S. Burt and C. Camerer, ‘Not so different after all: a cross-discipline view of trust’, Academy of Management Review, July 1998, pp. 393–404; and J. A. Simpson, ‘Psychological foundations of trust’, Current Directions in Psychological Science, 16, 5 (2007), pp. 264–8.   96 See, for instance, K. T. Dirks and D. L. Ferrin, ‘Trust in leadership: meta-analytic findings and implications for research and practice’, Journal of Applied Psychology, 87, 4, (2002), pp. 611–28; D. I. Jung and B. J. Avolio, ‘Opening the black box: an experimental investigation of the mediating effects of trust and value congruence on transformational and transactional leadership’, Journal of Organizational Behavior, December 2000, pp. 949–64; and A. Zacharatos, J. Barling and R. D. Iverson, ‘High-performance work systems and occupational safety’, Journal of Applied Psychology, January 2005, pp. 77–93.  97 Based on L. T. Hosmer, ‘Trust: the connecting link between organizational theory and philosophical ethics’, Academy of Management Review, April 1995, p. 393; R. C. Mayer, J. H. Davis and F. D. Schoorman, ‘An integrative model of organizational trust’, Academy of Management Review, July 1995, pp. 709–34; and F. D. Schoorman, R. C. Mayer and J. H. Davis, ‘An integrative model of organizational trust: past, present, and future’, Academy of Management Review, 32, 2 (2007), pp. 344–54.   98 J. Schaubroeck, S. S. K. Lam and A. C. Peng, ‘Cognition-based and affect-based trust as mediators of leader behavior influences on team performance’, Journal of Applied Psychology, 96, 4 (July 2011), pp. 863–71.   99 Mayer, Davis and Schoorman, ‘An integrative model of organizational trust’; and J. A. Colquitt, B. A. Scott and J. A. LePine, ‘Trust, trustworthiness, and trust propensity: a meta-analytic test of their unique relationships with risk taking and job performance’, Journal of Applied Psychology, 92, 4 (2007), pp. 909–27. 100 Cited in D. Jones, ‘Do you trust your CEO?’, USA Today, 12 February 2003, p. 7B. 101 R. C. Mayer and J. H. Davis, ‘The effect of the performance appraisal system on trust for management: a quasi-experiment’, Journal of Applied Psychology, 84, 1 (1999), pp. 123–36; and R. C. Mayer and M. B. Gavin, ‘Trust in management and performance: who minds the shop while the employees watch the boss?’, Academy of Management Journal, 38 (2005), pp. 874–88. 102 J. A. Simpson, ‘Foundations of interpersonal trust’, in A. W. Kruglanski and E. T. Higgins (eds), Social Psychology: Handbook of Basic Principles, 2nd edn (New York: Guilford, 2007), pp. 587–607. 103 Ibid. 104 B. Groysberg and M. Slind, ‘Leadership is a conversation’, Harvard Business Review, June 2012, pp. 76–84. 105 H. Zhao, S. J. Wayne, B. C. Glibkowski and J. Bravo, ‘The impact of psychological contract breach on work-related outcomes: a meta-analysis’, Personnel Psychology, 60 (2007), pp. 647–80. 106 D. L. Shapiro, A. D. Boss, S. Salas, S. Tangirala and M. A. Von Glinow, ‘When are transgressing leaders punitively judged? An empirical test’, Journal of Applied Psychology, 96, 2 (2011), pp. 412–22. 107 D. L. Ferrin, P. H. Kim, C. D. Cooper and K. T. Dirks, ‘Silence speaks volumes: the effectiveness of reticence in comparison to apology and denial for responding to integrity- and competence-based trust violations’, Journal of Applied Psychology, 92, 4 (2007), pp. 893–908.

108 M. E. Schweitzer, J. C. Hershey and E. T. Bradlow, ‘Promises and lies: restoring violated trust’, Organizational Behavior and Human Decision Processes, 101, 1 (2006), pp. 1–19. 109 J. R. Detert and E. R. Burris, ‘Leadership behavior and employee voice: is the door really open?’, Academy of Management Journal, 50, 4 (2007), pp. 869–84. 110 Colquitt, Scott and LePine, ‘Trust, trustworthiness, and trust propensity’. 111 See, for example, M. Murray, Beyond the Myths and Magic of Mentoring: How to Facilitate an Effective Mentoring Process, rev. edn (New York: Wiley, 2001); K. E. Kram, ‘Phases of the mentor relationship’, Academy of Management Journal, December 1983, pp. 608–25; R. A. Noe, ‘An investigation of the determinants of successful assigned mentoring relationships’, Personnel Psychology, Autumn 1988, pp. 559–80; and L. Eby, M. Buits and A. Lockwood, ‘Protégés’ negative mentoring experiences: construct development and nomological validation’, Personnel Psychology, Summer 2004, pp. 411–47. 112 B. R. Ragins and J. L. Cotton, ‘Easier said than done: gender differences in perceived barriers to gaining a mentor’, Academy of Management Journal, 34, 4 (1993), pp. 939–51; C. R. Wanberg, E. T. Welsh and S. A. Hezlett, ‘Mentoring research: a review and dynamic process model’, in G. R. Ferris and J. J. Martocchio (eds), Research in Personnel and Human Resources Management, vol. 22 (Greenwich, CT: Elsevier Science, 2003), pp. 39–124; and T. D. Allen, ‘Protégé selection by mentors: contributing individual and organizational factors’, Journal of Vocational Behavior, 65, 3 (2004), pp. 469–83. 113 T. D. Allen, M. L. Poteet, J. E. A. Russell and G. H. Dobbins, ‘A field study of factors related to supervisors’ willingness to mentor others’, Journal of Vocational Behavior, 50, 1 (1997), pp. 1–22; S. Aryee, Y. W. Chay and J. Chew, ‘The motivation to mentor among managerial employees in the maintenance career stage: an interactionist perspective’, Group and Organization Management, 21, 3 (1996), pp. 261–77; L. T. Eby, A. L. Lockwood and M. Butts, ‘Perceived support for mentoring: a multiple perspectives approach’, Journal of Vocational Behavior, 68, 2 (2006), pp. 267–91; and T. D. Allen, E. Lentz and R. Day, ‘Career success outcomes associated with mentoring others: a comparison of mentors and nonmentors’, Journal of Career Development, 32, 3 (2006), pp. 272–85. 114 See, for example, K. E. Kram and D. T. Hall, ‘Mentoring in a context of diversity and turbulence’, in E. E. Kossek and S. A. Lobel (eds), Managing Diversity (Cambridge, MA: Blackwell, 1996), pp. 108–36; B. R. Ragins and J. L. Cotton, ‘Mentor functions and outcomes: a comparison of men and women in formal and informal mentoring relationships’, Journal of Applied Psychology, August 1999, pp. 529–50; and D. B. Turban, T. W. Dougherty and F. K. Lee, ‘Gender, race, and perceived similarity effects in developmental relationships: the moderating role of relationship duration’, Journal of Vocational Behavior, October 2002, pp. 240–62. 115 J. U. Chun, J. J. Sosik and N. Y. Yun, ‘A longitudinal study of mentor and protégé outcomes in formal mentoring relationships’, Journal of Organizational Behavior, 12 November 2012, pp. 35–49. 116 Ragins and Cotton, ‘Mentor functions and outcomes’; and C. M. Underhill, ‘The effectiveness of mentoring programs in corporate settings: a meta-analytical review of the literature’, Journal of Vocational Behavior, 68, 2 (2006), pp. 292–307. 117 T. D. Allen, E. T. Eby and E. Lentz, ‘The relationship between formal mentoring program characteristics and perceived program effectiveness’, Personnel Psychology, 59 (2006), pp. 125–153; T. D.

364  12 Leadership Allen, L. T. Eby and E. Lentz, ‘Mentorship behaviors and mentorship quality associated with formal mentoring programs: closing the gap between research and practice’, Journal of Applied Psychology, 91, 3 (2006), pp. 567–78; and M. R. Parise and M. L. Forret, ‘Formal mentoring programs: the relationship of program design and support to mentors’ perceptions of benefits and costs’, Journal of Vocational Behavior, 72, 2 (2008), pp. 225–40. 118 L. T. Eby and A. Lockwood, ‘Protégés’ and mentors’ reactions to participating in formal mentoring programs: a qualitative investigation’, Journal of Vocational Behavior, 67, 3 (2005), pp. 441–58; G. T. Chao, ‘Formal mentoring: lessons learned from past practice’, Professional Psychology: Research and Practice, 40, 3 (2009), pp. 314–20; and C. R. Wanberg, J. D. KammeyerMueller and M. Marchese, ‘Mentor and protégé predictors and outcomes of mentoring in a formal mentoring program’, Journal of Vocational Behavior, 69 (2006), pp. 410–23. 119 M. K. Feeney and B. Bozeman, ‘Mentoring and network ties’, Human Relations, 61, 12 (2008), pp. 1651–76; N. Bozionelos, ‘Intra-organizational network resources: how they relate to career success and organizational commitment’, Personnel Review, 37, 3 (2008), pp. 249–63; and S. A. Hezlett and S. K. Gibson, ‘Linking mentoring and social capital: implications for career and organization development’, Advances in Developing Human Resources, 9, 3 (2007), pp. 384–412. 120 See, for instance, J. R. Meindl, ‘The romance of leadership as a follower-centric theory: a social constructionist approach’, Leadership Quarterly, Autumn 1995, pp. 329–41; and B. Schyns, J. Felfe and H. Blank, ‘Is charisma hyper-romanticism? empirical evidence from new data and a meta-analysis’, Applied Psychology: An International Review, 56, 4 (2007), pp. 505–27. 121 M. J. Martinko, P. Harvey, D. Sikora and S. C. Douglas, ‘Perceptions of abusive supervision: the role of subordinates’ attribution styles’, Leadership Quarterly, August 2011, pp. 751–64. 122 J. R. Meindl, S. B. Ehrlich and J. M. Dukerich, ‘The romance of leadership’, Administrative Science Quarterly, March 1985, pp. 78–102; and M. C. Bligh, J. C. Kohles, C. L. Pearce, J. E. Justin and J. F. Stovall, ‘When the romance is over: follower perspectives of aversive leadership’, Applied Psychology: An International Review, 56, 4 (2007), pp. 528–57. 123 B. R. Agle, N. J. Nagarajan, J. A. Sonnenfeld and D. Srinivasan, ‘Does CEO charisma matter?’, Academy of Management Journal, 49, 1 (2006), pp. 161–74. 124 Bligh, Kohles, Pearce, Justin and Stovall, ‘When the romance is over’. 125 Schyns, Felfe and Blank, ‘Is charisma hyper-romanticism?’ 126 J. Cassidy, ‘Subprime suspect: the rise and fall of Wall Street’s first black C.E.O.’, New Yorker, 31 March 2008, pp. 78–91. 127 A. S. Rosette, G. J. Leonardelli and K. W. Phillips, ‘The white standard: racial bias in leader categorization’, Journal of Applied Psychology, 93, 4 (2008), pp. 758–77.

128 A. M. Koenig, A. H. Eagly, A. A. Mitchell and T. Ristikari, ‘Are leader stereotypes masculine? A meta-analysis of three research paradigms’, Psychological Bulletin, 137, 4 (2011), pp. 616–42. 129 M. Van Vugt and B. R. Spisak, ‘Sex differences in the emergence of leadership during competitions within and between groups’, Psychological Science, 19, 9 (2008), pp. 854–8. 130 Ibid. 131 R. E. Silverman, ‘Who’s the boss? There isn’t one’, Wall Street Journal, 20 June 2012, pp. B1, B8. 132 S. D. Dionne, F. J. Yammarino, L. E. Atwater and L. R. James, ‘Neutralizing substitutes for leadership theory: leadership effects and common-source bias’, Journal of Applied Psychology, 87 (2002), pp. 454–64; and J. R. Villa, J. P. Howell, P. W. Dorfman and D. L. Daniel, ‘Problems with detecting moderators in leadership research using moderated multiple regression’, Leadership Quarterly, 14 (2002), pp. 3–23. 133 L. A. Hambley, T. A. O’Neill and T. J. B. Kline, ‘Virtual team leadership: the effects of leadership style and communication medium on team interaction styles and outcomes’, Organiz­ ational Behavior and Human Decision Processes, 103 (2007), pp. 1–20; and B. J. Avolio and S. S. Kahai, ‘Adding the ‘E’ to E-leadership: how it may impact your leadership’, Organizational Dynamics, 31, 4 (2003), pp. 325–38. 134 S. J. Zaccaro and P. Bader, ‘E-leadership and the challenges of leading e-teams: minimizing the bad and maximizing the good’, Organizational Dynamics, 31, 4 (2003), pp. 381–5. 135 C. E. Naquin and G. D. Paulson, ‘Online bargaining and interpersonal trust’, Journal of Applied Psychology, February 2003, pp. 113–20. 136 B. M. Bass, ‘Cognitive, social, and emotional intelligence of transformational leaders’, in R. E. Riggio, S. E. Murphy and F. J. Pirozzolo (eds), Multiple Intelligences and Leadership (Mahwah, NJ: Lawrence Erlbaum, 2002), pp. 113–14. 137 See, for instance, P. Dvorak, ‘M.B.A. programs hone “soft skills”’, Wall Street Journal, 12 February 2007, p. B3. 138 J. Weber, ‘The leadership factor’, BusinessWeek, 12 June 2006, pp. 60–4. 139 D. Brady, ‘The rising star of CEO consulting’, Bloomberg Businessweek, 24 November 2010. 140 D. S. DeRue, J. D. Nahrgang, J. R. Hollenbeck and K. Workman, ‘A quasi-experimental study of after-event reviews and leadership development’, Journal of Applied Psychology, 97 (2012), pp. 997–1015. 141 R. D. Arvey, Z. Zhang and B. J. Avolio, ‘Developmental and genetic determinants of leadership role occupancy among women’, Journal of Applied Psychology, May 2007, pp. 693–706.

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CHAPTER 13 Power and politics Learning objectives After studying this chapter, you should be able to: 1 Define power and contrast leadership and power. 2 contrast the five bases of power. 3 explain the role of dependence in power relationships. 4 Identify nine power or influence tactics and their contingencies. 5 Define and evaluate organizational politics. 6 Identify the causes and consequences of political behaviour. 7 Apply impression management techniques. 8 Determine whether a political action is ethical.

Power is not revealed by striking hard or often, but by striking true. Honoré de Balzac

SEPP BLATTER: THE MOST POWERFUL MAN IN FOOTBALL

360B / Shutterstock

For 17 years, Sepp Blatter reigned supremely over his FIFA (Fédération Internationale de Football Association) kingdom. Although the position of FIFA President is an elected one, Sep Blatter’s rule seemed unassailable. In 2011 he was unopposed in his bid to retain the presidency, and despite years of accusations of financial irregularities and corruption, his popularity amongst the majority of FIFA’s members appeared unaffected. Days before the 2015 election, 14 senior officials were arrested on charges of the alleged use of bribery, fraud and money laundering during Blatter’s Presidency. Yet despite this, Blatter was re-elected as President of FIFA. But just a few days later, he stood before a sparsely attended, hastily convened press conference in FIFA’s €200m headquarters and gloomily announced he would step down, bringing down the curtain on four decades at world football’s scandal-hit governing body and 17 as president. In 2016 Blatter was placed under criminal investigation by Swiss authorities.

Blatter presided over an organisation plagued by corruption, with him at the centre. According to an internal investigation by the sport’s world governing body, Blatter was among a group of powerful football executives who secretly paid themselves €70m in a ‘coordinated effort to enrich themselves’. It might have been thought that a leader involved with, and presiding over, a corrupt organisation would quickly fall. But Blatter was hugely popular and influential. The reason: power and politics. In a very democratic affair, all of FIFA’s member countries have a single vote in presidential elections, despite their size or level of involvement with world football. The majority of these nations are developing and desperately in need of resources. Blatter provided these and in so doing ensured their votes and his position. Power and politics are an inevitable part of all organisations and can be used for better or worse. Although widely condemned, Blatter has also been credited with spreading football around the world. Unfortunately, this is not what most people remember about his tenure at FIFA.

Sources: ‘Sepp Blatter finally lets go of Fifa as FBI noose tightens’ The Guardian; ‘Blatter and FIFA chiefs ‘received $80m in secret payments’, Murad Ahmed, Financial Times 3 June 2016.

368  13 Power and politics

Power and politics have been described as the last dirty words. It is easier for most of us to talk about sex or money than it is to talk about power or political behaviour. People who have power deny it, people who want it try not to look like they’re seeking it, and those who are good at getting it are secretive about how they do so.1

REFLECTION Is your workplace political? If you don’t currently have a job, think about your most recent work experience. Do you think a political workplace is a bad thing? If yes, why? If no, why not? What factors cause your workplace to be political?

A major theme of this chapter is that power and political behaviour are natural processes in any group or organization. Given that, you need to know how power is acquired and exercised if you are to fully understand organizational behaviour. Although you may have heard the phrase ‘power corrupts and absolute power corrupts absolutely’, power is not always bad. As one author has noted, most medicines can kill if taken in the wrong amount, and thousands die each year in automobile accidents, but we don’t abandon chemicals or cars because of the dangers associated with them. Rather, we consider danger an incentive to get training and information that will help us to use these forces productively.2 The same applies to power. It’s a reality of organizational life, and it’s not going to go away. Moreover, by learning how power works in organizations, you’ll be better able to use your knowledge to become a more effective manager.

A definition of power 1 Define power and contrast leadership and power. power A capacity that A has to influence the behaviour of B so that B acts in accordance with A’s wishes. dependency B’s relationship to A when A possesses something that B requires.

Power refers to a capacity that A has to influence the behaviour of B so that B acts in accordance with A’s wishes.3 Power may exist but not be used. It is, therefore, a capacity or potential. Someone can have power but not impose it. Probably the most important aspect of power is that it is a function of dependency. The greater B’s dependence on A, the greater is A’s power in the relationship. Dependence, in turn, is based on alternatives that B perceives and the importance that B places on the alternative(s) that A controls. A person can have power over you only if he or she controls something you desire. If you want a university degree and have to pass a certain course to get it, and your current instructor is the only faculty member in the college who teaches that course, he or she has power over you. Your alternatives are highly limited, and you place a high degree of importance on obtaining a passing grade. Similarly, if you’re attending university on funds totally provided by your parents, you probably recognize the power that they hold over you. You’re dependent on them for financial support. But once you’re out of university, have a job, and are making a good income, your parents’ power is reduced significantly. Who among us, though, has not known or heard of a rich relative who is able to control a large number of family members merely through the implicit or explicit threat of ‘writing them out of the will’?

Contrasting leadership and power A careful comparison of our description of power with our description of leadership in Chapter 12 reveals that the concepts are closely intertwined. Leaders use power as a means of attaining group goals.

Bases of power   369

What differences are there between the two terms? One difference relates to goal compatibility. Power does not require goal compatibility, merely dependence. Leadership, on the other hand, requires some congruence between the goals of the leader and those being led. A second difference relates to the direction of influence. Leadership focuses on the downward influence on one’s followers. It minimizes the importance of lateral and upward influence patterns. Power does not. Still another difference deals with research emphasis. Leadership research, for the most part, emphasizes style. It seeks answers to questions such as: How supportive should a leader be? How much decision making should be shared with followers? In contrast, the research on power has tended to encompass a broader area and to focus on tactics for gaining compliance. It has gone beyond the individual as the exerciser of power because power can be used by groups as well as by individuals to control other individuals or groups.

Bases of power 2 Contrast the five bases of power.

Where does power come from? What is it that gives an individual or a group influence over others? We answer these questions by dividing the bases or sources of power into two general groupings – formal and personal – and then breaking each of these down into more specific categories.4

Formal power Formal power is based on an individual’s position in an organization. Formal power can come from the ability to coerce or reward, or it can come from formal authority.

Coercive power coercive power A power base that is dependent on fear of the negative results from failing to comply.

The coercive power base is dependent on fear of the negative results from failing to comply. It rests on the application, or the threat of application, of physical sanctions such as the infliction of pain, the generation of frustration through restriction of movement, or the controlling by force of basic physiological or safety needs. At the organizational level, A has coercive power over B if A can dismiss, suspend or demote B, assuming that B values his or her job. Similarly, if A can assign B work activities that B finds unpleasant or treat B in a manner that B finds embarrassing, A possesses coercive power over B. Coercive power can also come from withholding key information. People in an organization who have data or knowledge that others need can make those others dependent on them.

Reward power reward power Compliance achieved based on the ability to distribute rewards that others view as valuable.

The opposite of coercive power is reward power. People comply with the wishes or directives of another because doing so produces positive benefits; therefore, one who can distribute rewards that others view as valuable will have power over them. These rewards can be either f­ inancial – such as controlling pay rates, rises and bonuses; or nonfinancial – including recognition, promotions, interesting work assignments, friendly colleagues and preferred work shifts or sales territories.5

Legitimate power legitimate power The power a person receives as a result of his or her position in the formal hierarchy of an organization.

In formal groups and organizations, probably the most frequent access to one or more of the power bases is one’s structural position. This is called legitimate power. It represents the formal authority to control and use organizational resources. Positions of authority include coercive and reward powers. Legitimate power, however, is broader than the power to coerce and reward. Specifically, it includes acceptance by members in an organization of the authority of a position. We associate power so closely with the concept of hierarchy that just drawing longer lines in an organization chart leads people to infer the leaders are especially powerful, and when a powerful executive is described, people tend to put the person at a higher position when drawing an organization chart.6 When school principals,

370  13 Power and politics Jonathan Brady / AP Archive / Press Association Images

bank presidents or army captains speak (assuming that their directives are viewed to be within the authority of their positions), teachers, tellers and first lieutenants listen and usually comply.

Personal power

Professor Dame Sally Davies, the Chief Medical Officer for England, has both legitimate power and expert power. As a senior official for the National Health Service and Department of Health she is able to use formal authority to help dictate operations. Davies is also able to wield power because of her expertise in health issues gained as a doctor and prominent researcher in the field. expert power Influence based on special skills or knowledge. referent power Influence based on identification with a person who has desirable resources or personal traits.

You don’t have to have a formal position in an organization to have power. Many of the most competent and productive chip designers at Intel, for instance, have power, but they aren’t managers and have no formal power. What they have is personal power – power that comes from an individual’s unique characteristics. In this section, we look at two bases of personal power – expertise and the respect and admiration of others.

Expert power Expert power is influence wielded as a result of expertise, special

skill or knowledge. As jobs become more specialized, we become increasingly dependent on experts to achieve goals. It is generally acknowledged that physicians have expertise and hence expert power – most of us follow the advice that our doctors give us. But it’s also important to recognize that computer specialists, tax accountants, economists, industrial psychologists and other specialists are able to wield power as a result of their expertise.

Referent power Referent power is based on identification with a person who has desirable resources or personal

traits. If I like, respect and admire you, you can exercise power over me because I want to please you. Referent power develops out of admiration of another and a desire to be like that person. It helps explain, for instance, why celebrities are paid millions of dollars to endorse products in commercials. Marketing research shows that people such as David Beckham and Roger Federer have the power to influence your choice of, for example, razors and athletic clothes. With a little practice, you and I could probably deliver as smooth a sales pitch as these celebrities, but the buying public doesn’t identify with you and me. Some people have referent power who, while not in formal leadership positions, nevertheless are able to exert influence over others because of their charismatic dynamism, likability and emotional effects on us.

Figure 13.1  Source: Leo Cullum cartoon 1/6/86 New Yorker, © Leo Cullum/Condé Nast Publications/www.cartoonbank.com.

Dependency: the key to power   371

Which bases of power are most effective? Of the three bases of formal power (coercive, reward, legitimate) and two bases of personal power (expert, referent), which is most important to have? Research suggests pretty clearly that the personal sources of power are most effective. Both expert and referent power are positively related to employees’ satisfaction with supervision, their organizational commitment and their performance, whereas reward and legitimate power seem to be unrelated to these outcomes. Moreover, one source of formal power – coercive power – actually can backfire in that it is negatively related to employee satisfaction and commitment.7 Consider Steve Stoute’s company, Translation, which matches popstar spokespersons with corporations that want to promote their brands. Stoute has paired Justin Timberlake with McDonald’s, Beyoncé Knowles with Tommy Hilfiger and Jay-Z with Reebok. Stoute’s business seems to be all about referent power. His firm’s work aims to use the credibility of these artists and performers to reach youth culture.8 In other words, people buy products associated with cool figures because they wish to identify with and emulate them.

Dependency: the key to power 3 Explain the role of dependence in power relationships.

Earlier in this chapter we said that probably the most important aspect of power is that it is a function of dependency. In this section, we show how having an understanding of dependency is central to furthering your understanding of power itself.

The general dependency postulate Let’s begin with a general postulate: The greater B’s dependency on A, the greater the power A has over B. When you possess anything that others require but that you alone control, you make them dependent on you and, therefore, you gain power over them.9 Dependency, then, is inversely proportional to the alternative sources of supply. If something is plentiful, possession of it will not increase your power. If everyone is intelligent, intelligence gives no special advantage. Similarly, among the super rich, money is no longer power. But, as the old saying goes, ‘In the land of the blind, the one-eyed man is king!’ If you can create a monopoly by controlling information, prestige or anything else that others crave, they become dependent on you. Conversely, the more that you can expand your options, the less power you place in the hands of others. This explains, for example, why most organizations develop multiple suppliers rather than give their business to only one. It also explains why so many of us aspire to financial independence. Financial independence reduces the power that others can have over us.

What creates dependency? Dependency is increased when the resource you control is important, scarce and nonsubstitutable.10

Importance If nobody wants what you have, it’s not going to create dependency. To create dependency, the thing(s) you control must be perceived as being important. Organizations, for instance, actively seek to avoid uncertainty.11 We should, therefore, expect that the individuals or groups who can absorb an organization’s uncertainty will be perceived as controlling an important resource. For instance, a study of industrial organizations found that the marketing departments in these firms were consistently rated as the most powerful.12 The researcher concluded that the most critical uncertainty facing these firms was selling their products. This might suggest that engineers, as a group, would be more powerful at Matsushita than at Procter & Gamble. These inferences appear to be generally valid. Matsushita, which is heavily technologically oriented, depends on its engineers to maintain its products’ technical advantages and quality, and so they are a powerful group. At Procter & Gamble, marketing is the name of the game, and marketers are the most powerful occupational group.

372  13 Power and politics

Scarcity As noted previously, if something is plentiful, possession of it will not increase your power. A resource needs to be perceived as scarce to create dependency. This can help explain how low-ranking members in an organization who have important knowledge not available to highranking members gain power over the high-ranking members. Possession of a scarce resource – in this case, important knowledge – makes the high-ranking member dependent on the low-ranking member. This also helps to make sense out of behaviours of low-ranking members that otherwise might seem illogical, such as destroying the procedure manuals that describe how a job is done, refusing to train people in their jobs or even to show others exactly what they do, creating specialized language and terminology that inhibit others from understanding their jobs, or operating in secrecy so an activity will appear more complex and difficult than it really is. The scarcity–dependency relationship can further be seen in the power of occupational categories. Individuals in occupations in which the supply of personnel is low relative to demand can negotiate compensation and benefits packages that are far more attractive than can those in occupations for which there is an abundance of candidates. For example, the market for network systems analysts is tight, with the demand high and the supply limited. The result is that the bargaining power of these analysts is greater than, say, a data input clerk where there is usually an abundant supply.

Nonsubstitutability The fewer viable substitutes for a resource, the more power the control over that resource provides. Higher education provides an excellent example. At universities in which there are strong pressures for the faculty to publish, we can say that a department head’s power over a faculty member is inversely related to that member’s publication record. The more recognition the faculty member receives through publication, the more mobile they are; that is, because other universities want faculty who are highly published and visible, there is an increased demand for that person’s services. Although the concept of tenure can act to alter this relationship by restricting the department head’s alternatives, faculty members who have few or no publications have the least mobility and are subject to the greatest influence from their superiors.

Power tactics 4  Identify nine power or influence tactics and their contingencies. power tactics Ways in which individuals translate power bases into specific actions.

What power tactics do people use to translate power bases into specific action? That is, what options do individuals have for influencing their bosses, co-workers or employees? And are some of these options more effective than others? In this section, we review popular tactical options and the conditions under which one may be more effective than another. Research has identified nine distinct influence tactics:13 ●

●

●

●

Legitimacy. Relying on one’s authority position or stressing that a request is in accordance with organizational policies or rules. Rational persuasion. Presenting logical arguments and factual evidence to demonstrate that a request is reasonable. Inspirational appeals. Developing emotional commitment by appealing to a target’s values, needs, hopes and aspirations. Consultation. Increasing the target’s support by involving him or her in deciding how you will accomplish your plan.

●

Exchange. Rewarding the target with benefits or favours in exchange for following a request.

●

Personal appeals. Asking for compliance based on friendship or loyalty.

●

Ingratiation. Using flattery, praise or friendly behaviour prior to making a request.

●

Pressure. Using warnings, repeated demands and threats.

●

Coalitions. Enlisting the aid of other people to persuade the target to agree.

Power tactics   373

Some tactics are more effective than others. Specifically, evidence indicates that rational persuasion, inspirational appeals and consultation tend to be the most effective, especially when the audience is highly interested in the outcomes of a decision process. On the other hand, pressure tends to frequently backfire and is typically the least effective of the nine tactics.14 You can also increase your chance of success by using more than one type of tactic at the same time or sequentially, as long as your choices are compatible.15 Using both ingratiation and legitimacy can lessen negative reactions to your appearing to dictate outcomes, but only when the audience does not really care about the outcome of a decision process or the policy is routine.16 To see how these tactics can work in practice, let’s consider the most effective way of getting a salary increase. You can start with rational persuasion. That means doing your homework and carefully thinking through the best way to build your case: figure out how your pay compares to that of peers, or land a competing job offer, or show objective results that testify to your performance. For example, Kitty Dunning, a vice president at Don Jagoda Associates, landed a 16 per cent rise when she emailed her boss numbers showing she had increased sales.17 But the effectiveness of some influence tactics depends on the direction of influence.18 As shown in Table 13.1, studies have found that rational persuasion is the only tactic that is effective across organizational levels. Inspirational appeals work best as a downward-influencing tactic with subordinates. When pressure works, it’s generally only to achieve downward influence; and the use of personal appeals and coalitions are most effective with lateral influence attempts. In addition to the direction of influence, a number of other factors have been found to affect which tactics work best. These include the sequencing of tactics, a person’s skill in using the tactic and the organizational culture. Table 13.1  Preferred power tactics by influence direction Upward influence

Downward influence

Lateral influence

Rational persuasion

Rational persuasion

Rational persuasion

Inspirational appeals

Consultation

Pressure

Ingratiation

Consultation

Exchange

Ingratiation

Legitimacy

Exchange

Personal appeals

Legitimacy

Coalitions

Influence tactics in China Researchers usually examine cross-cultural influences in business by comparing two very different cultures, such as those from Eastern and Western societies. However, it is also important to examine differences within a given culture because those differences can sometimes be greater than differences between cultures. For example, although we might view all Chinese people as being alike due to their shared heritage, China is a big country, housing different cultures and traditions. A recent study examining mainland Chinese, Taiwanese and Hong Kong managers explored how the three cultural subgroups differ according to the influence tactics they prefer to use. Though managers from all three places believe that rational persuasion and exchange are the most effective influence tactics, managers in Taiwan tend to use inspirational appeals and ingratiation more than managers from either mainland China or Hong Kong. The study also found that managers from

glOBal Hong Kong rate pressure as more effective in influencing others than do managers in Taiwan or mainland China. Such differences have implications for business relationships. For example, Taiwanese or mainland Chinese managers may be taken aback by the use of pressure tactics by a Hong Kong manager. Likewise, managers from Hong Kong may not be persuaded by managers from Taiwan, who tend to use ingratiating tactics. Such differences in influence tactics may make business dealings difficult. Companies should address these issues, perhaps making their managers aware of the differences within cultures. Managers need to know what variations exist within their local cultures so they can be better prepared to deal with others. Managers who fail to realize these differences may miss out on opportunities to deal effectively with others. Source: Based on P. P. Fu, T. K. Peng, J. C. Kennedy and G. Yukl, ‘A comparison of Chinese managers in Hong Kong, Taiwan and Mainland China’, Organizational Dynamics, February 2004, pp. 32–46.

374  13 Power and politics

political skill The ability to influence others in such a way as to enhance one’s objectives.

You’re more likely to be effective if you begin with ‘softer’ tactics that rely on personal power such as personal and inspirational appeals, rational persuasion and consultation. If these fail, you can move to ‘harder’ tactics (which emphasize formal power and involve greater costs and risks), such as exchange, coalitions and pressure.19 Interestingly, it’s been found that using a single soft tactic is more effective than using a single hard tactic and that combining two soft tactics or a soft tactic and rational persuasion is more effective than any single tactic or a combination of hard tactics.20 The effectiveness of tactics depends on the audience.21 People especially likely to comply with soft power tactics tend to be more reflective and intrinsically motivated; they have high self-esteem and greater desire for control. Those likely to comply with hard power tactics are more action-oriented and extrinsically motivated and are more focused on getting along with others than on getting their own way. People in different countries prefer different power tactics.22 Those from individualistic countries tend to see power in personalized terms and as a legitimate means of advancing their personal ends, whereas those in collectivistic countries see power in social terms and as a legitimate means of helping others.23 A study comparing managers in the United States and China found that US managers prefer rational appeal, whereas Chinese managers preferred coalition tactics.24 These differences tend to be consistent with the values in these two countries. Reason is consistent with the US preference for direct confrontation and rational persuasion to influence others and resolve differences, while coalition tactics align with the Chinese preference for meeting difficult or controversial requests with indirect approaches. Research also has shown that individuals in Western, individualistic cultures tend to engage in more self-enhancement behaviours (such as self-promotion) than individuals in more collectivistic Eastern cultures.25 People differ in their political skill, or the ability to influence others in such a way as to enhance their own objectives. Those who are politically skilled are more effective in their use of influence tactics, regardless of the tactics they’re using. Political skill also appears to be more effective when the stakes are high – such as when the individual is accountable for important organizational outcomes. Finally, the politically skilled are able to exert their influence without others detecting it, which is a key element in being effective (it’s damaging to be labelled political).26 However, these individuals also appear most able to use their political skills in environments marked by low levels of procedural and distributive justice. When an organization is run with open and fairly applied rules, free of favouritism or biases, political skill is actually negatively related to job performance ratings.27 Finally, we know cultures within organizations differ markedly – some are warm, relaxed and supportive; others are formal and conservative. Some encourage participation and consultation, some encourage reason, and still others rely on pressure. People who fit the culture of the organization tend to obtain more influence.28 Specifically, extroverts tend to be more influential in team-oriented organizations, and highly conscientious people are more influential in organizations that value working alone on technical tasks. People who fit the culture are influential because they can perform especially well in the domains deemed most important for success. In other words, they are influential because they are competent. Thus, the organ­ ization itself will influence which subset of power tactics is viewed as acceptable for use.

How power affects people To this point, we’ve discussed what power is and how it is acquired. But we’ve not yet answered one important question: Does power corrupt? There is certainly evidence that there are corrupting aspects of power. Evidence suggests that power leads people to place their own interests ahead of others. Why does this happen? Interestingly, research suggests that power not only leads people to focus on their self-­interests because they can, it also liberates people to focus inward, and thus come to place greater weight on their goals and interests. Power also appears to lead individuals to ‘objectify’ others (to see them as tools to obtain their instrumental goals), to value relations with people with less power, and to see relationships as more peripheral.29

Politics: power in action   375

That’s not all. Powerful people react – especially negatively – to any threats to their competence. They’re more willing to denigrate others. People given power are more likely to make self-interested decisions when faced with a moral hazard (such as when hedge fund managers take more risks with other people’s money because they’re rewarded for gains but less often punished for losses). Power also leads to overconfident decision making.30 Frank Lloyd Wright, the great architect, is a good example of power’s corrupting effects. Early in his career, Wright worked for and was mentored by a renowned architect, Louis Sullivan (sometimes known as ‘the father of the skyscraper’). Before he achieved greatness, Wright was copious in his praise for Sullivan. Later in his career, that praise faded, and Wright even took credit for one of Sullivan’s noted designs. Wright was never a benevolent man, but as his power accumulated, so did his potential to behave in a ‘monstrous’ way towards others.31 So, yes, power does appear to have some important disturbing effects on us. But that is hardly the whole story – it’s more complicated than that. Power doesn’t affect everyone in the same way, and there are even positive effects of power. Let’s consider each of these in turn. First, the toxic effects of power depend on one’s personality. Research suggests that if we have an anxious personality, power does not corrupt us because we are less likely to think that using power benefits us.32 Second, the corrosive effect of power can be contained by organizational systems. One study found, for example, that while power made people behave in a self-serving manner, when accountability of this behaviour was initiated, the self-serving behaviour stopped. Third, forgive the pun, but we have the power to blunt the negative effects of power. One study showed that simply expressing gratitude towards powerful others made them less likely to aggress against us. Finally, remember the aphorism that those with little power grab and abuse what little they have? There appears to be some truth to this in that the people most likely to abuse power are those who are low in status and gain power. Why is this the case? It appears that having low status is threatening, and this fear is used in negative ways if power is given.33 As you can see, there are factors that can ameliorate the negative effects of power. But there also appear to be general positive effects. Power energizes and leads to approach motivation (that is, more motivated to achieve goals). It also can enhance people’s motivation to help others, at least for certain people. One study found, for example, that values towards helping others only translated into actual work behaviour when people felt a sense of power.34 This study points to an important insight about power. It is not so much that power corrupts as it reveals. Supporting this line of reasoning, another study revealed that power led to self-interested behaviour only for those with weak moral identities (that is, the degree to which morals are core to one’s identity). For those with strong moral identities, power actually enhanced their moral awareness.35

Politics: power in action 5  Define and evaluate organizational politics. political behaviour Activities that are not required as part of a person’s formal role in the organization but that influence, or attempt to influence, the distribution of advantages and disadvantages within the organization.

When people get together in groups, power will be exerted. People want to carve out a niche from which to exert influence, to earn rewards and to advance their careers.36 When employees in organizations convert their power into action, we describe them as being engaged in politics. Those with good political skills have the ability to use their bases of power effectively.37

Definition of organizational politics There has been no shortage of definitions of organizational politics. Essentially, however, they have focused on the use of power to affect decision making in an organization or on behaviours by members that are self-serving and organizationally nonsanctioned.38 For our purposes, we shall define political behaviour in organizations as activities that are not required as part of one’s formal role in the organization but that influence, or attempt to influence, the distribution of advantages and disadvantages within the organization.39

REUTERS/Luke MacGregor

376  13 Power and politics

Whistle-blower Michael Woodford was fired from his position as CEO of Japan’s camera maker Olympus after informing company officials about accounting irregularities. Although not part of his role as CEO, Woodford engaged in the political behaviour of whistle-blowing that uncovered a 13-year accounting fraud by some Olympus executives.

This definition encompasses key elements from what most people mean when they talk about organizational politics. Political behaviour is outside one’s specified job requirements. The behaviour requires some attempt to use one’s power bases. In addition, our definition encompasses efforts to influence the goals, criteria or processes used for decision making when we state that politics is concerned with ‘the distribution of advantages and disadvantages within the organization’. Our definition is broad enough to include varied political behaviours such as withholding key information from decision makers, joining a coalition, whistle-blowing, spreading rumours, leaking confidential information about organizational activities to the media, exchanging favours with others in the organization for mutual benefit, and lobbying on behalf of or against a particular individual or decision alternative.

FACE THE FACTS

Politics in the workplace ●

A survey of over 600 global managers found leaders at all levels complain that politics is one of their main challenges as they move into more senior positions. At first and mid-levels it ranks top, with almost half of first-level leaders and one-third at level 2 saying that they’ve been unable to address this challenge effectively.

●

When asked ‘how do employees get ahead in your organization?’ 51 per cent of respondents cited ‘politics’ compared to 27 per cent who stated ‘hard work’.

●

A survey of 490 managers found that 60 per cent believe an ‘increase in political behaviour in their organization in recent years’ was their greatest cause of stress. This figure rises to 77 per cent for those working in the public sector.

Sources: M. Berry and G. Pitcher, ‘Office politics the biggest contributor to workplace stress’, Personnel Today, 18 January 2007; Leadership Transitions: Maximising HR’s Contribution, CIPD 2007; D. Crampton, ‘Is how Americans feel about their jobs changing?’, 28 September 2012, http://corevalues.com/employee-motivation/is-how-americans-feel-about-their-jobs-changing.

The reality of politics Interviews with experienced managers show that most believe political behaviour is a major part of organizational life.40 Many managers report some use of political behaviour is both

Politics: power in action   377

ethical and necessary, as long as it doesn’t directly harm anyone else. They describe politics as a necessary evil and believe someone who never uses political behaviour will have a hard time getting things done. Most also indicate they had never been trained to use political behaviour effectively. But why, you may wonder, must politics exist? Isn’t it possible for an organiz­ ation to be politics free? It’s possible – but unlikely. Organizations are made up of individuals and groups with different values, goals and interests.41 This sets up the potential for conflict over resources. Departmental budgets, space allocations, project responsibilities and salary adjustments are just a few examples of the resources about whose allocation organizational members may disagree. Resources in organizations are also limited, which often turns potential conflict into real conflict.42 If resources were abundant, then all the various constituencies within the organ­ ization could satisfy their goals. But because they are limited, not everyone’s interests can be provided for. Furthermore, whether true or not, gains by one individual or group are often perceived as being at the expense of others within the organization. These forces create competition among members for the organization’s limited resources. Maybe the most important factor leading to politics within organizations is the realization that most of the ‘facts’ that are used to allocate the limited resources are open to interpretation. What, for instance, is good performance? What’s an adequate improvement? What constitutes an unsatisfactory job? One person’s view that an act is a ‘selfless effort to benefit the organization’ is seen by another as a ‘blatant attempt to further one’s interest’.43 In organizations facts can only tell us so much, there is a large and ambiguous middle ground of organizational life – where the facts don’t speak for themselves – that politics flourish (see Table 13.2). Because most decisions have to be made in a climate of ambiguity – where facts are rarely fully objective and thus are open to interpretation – people within organizations will use

Table 13.2  Politics is in the eye of the beholder A behaviour that one person labels as ‘organizational politics’ is very likely to be characterized as an instance of ‘effective management’ by another. The fact is not that effective management is necessarily political, although in some cases it might be. Rather, a person’s reference point determines what he or she classifies as organizational politics. Take a look at the following labels used to describe the same phenomenon. These suggest that politics, like beauty, is in the eye of the beholder. ‘Political’ label

‘Effective management’ label

  1. Blaming others

vs

Fixing responsibility

  2. ‘Kissing up’

vs

Developing working relationships

  3. Apple polishing

vs

Demonstrating loyalty

  4. Passing the buck

vs

Delegating authority

  5. Covering your rear

vs

Documenting decisions

  6. Creating conflict

vs

Encouraging change and innovation

  7. Forming coalitions

vs

Facilitating teamwork

  8. Whistle-blowing

vs

Improving efficiency

  9. Scheming

vs

Planning ahead

10. Overachieving

vs

Competent and capable

11. Ambitious

vs

Career minded

12. Opportunistic

vs

Astute

13. Cunning

vs

Practical minded

14. Arrogant

vs

Confident

15. Perfectionist

vs

Attentive to detail

Source: Based on T. C. Krell, M. E. Mendenhall and J. Sendry, ‘Doing research in the conceptual morass of organisational politics’, paper presented at the Western Academy of Management Conference, Hollywood, CA, April 1987.

378  13 Power and politics

‘Power breeds contempt’ This statement appears to be true. When people have power bestowed on them, they appear to be inclined to ignore the perspectives and interests of those without power, according to research.44 Researchers made one group of participants feel powerful by asking them to recall and write about a situation in which they had power over another person. Another group of participants was instructed to recall and write about an incident in which someone had power over them. Participants in the powerful group were much more likely to ignore the

MYTH OR SCIENCE? perspectives of those in the less powerful group, were less able to accurately read their emotional expressions, and were less interested in understanding how other individuals see things. The authors of this study conclude that power leads to ‘the tendency to view other people only in terms of qualities that serve one’s personal goals and interests, while failing to consider those features of others that define their humanity’. So, while power has perks, it also appears to have costs – especially in terms of seeing things from the perspective of those with less of it.

whatever influence they can to taint the facts to support their goals and interests. That, of course, creates the activities we call politicking. Therefore, to answer the earlier question of whether it is possible for an organization to be politics free, we can say ‘yes’, if all members of that organization hold the same goals and interests, if organizational resources are not scarce, and if performance outcomes are completely clear and objective. But that doesn’t describe the organizational world that most of us live in.

Causes and consequences of political behaviour Factors contributing to political behaviour 6  Identify the causes and consequences of political behaviour.

Not all groups or organizations are equally political. In some organizations, for instance, politicking is overt and rampant, while in others, politics plays a small role in influencing outcomes. Why is there this variation? Recent research and observation have identified a number of factors that appear to encourage political behaviour. Some are individual characteristics, derived from the unique qualities of the people the organization employs; others are a result of the ­organization’s culture or internal environment. Figure 13.2 illustrates how both individual and organizational factors can increase political behaviour and provide favourable outcomes (increased rewards and averted punishments) for both individuals and groups in the organization.

Individual factors • High self-monitors • Internal locus of control • High Mach personality • Organizational investment • Perceived job alternatives • Expectations of success Organizational factors • Reallocation of resources • Promotion opportunities • Low trust • Role ambiguity • Unclear performance evaluation system • Zero-sum reward practices • Democratic decision making • High performance pressures • Self-serving senior managers

Political behaviour Low

Figure 13.2  Factors that influence political behaviour

High

Favourable outcomes • Rewards • Averted punishments

Causes and consequences of political behaviour   379

Individual factors

REUTERS/Robert Pratta

At the individual level, researchers have identified certain personality traits, needs and other factors that are likely to be related to political behaviour. In terms of traits, we find that employees who are high self-monitors, possess an internal locus of control, and have a high need for power are more likely to engage in political behaviour.45 The high self-monitor is more sensitive to social cues, exhibits higher levels of social conformity, and is more likely to be skilled in political behaviour than the low self-monitor. Individuals with an internal locus of control, because they believe they can control their environment, are more prone to take a proactive stance and attempt to manipulate situations in their favour. Not surprisingly, the Machiavellian personality – characterized by the will to manipulate and the desire for power – is comfortable using politics as a means to further his or her self-interest. In addition, an individual’s investment in the organization, perceived alternatives and expectations of success will influence the degree to which he or she will pursue illegitimate means of political action.46 The more a person has invested in the organization in terms of expectations of increased future benefits, the more that person has to lose if forced out and the less likely he or she is to use illegitimate means. The more alternative job opportunities an individual has – due to a favourable job market or the possession of scarce skills or knowledge, a prominent reputation or influential contacts outside the organization – the more likely that individual is to risk illegitimate political actions. Finally, if an individual has a low expectation of success in using illegitimate means, it is unlikely that he or she will attempt to do so. High expectations of success in the use of illegitimate means are most likely to be the province of both experienced and powerful individuals with polished political skills and inexperienced and naive employees who misjudge their chances.

Organizations foster politicking when they reduce resources in order to improve performance. After announcing plans to downsize its global workforce of 100,000 employees to increase its competitiveness, French pharmaceutical firm Sanofi stimulated political activity among employees who organized protests against the job cuts.

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Organizational factors Although we acknowledge the role that individual differences can play in fostering politicking, the evidence more strongly supports the idea that certain situations and cultures promote ­politics. Specifically, when an organization’s resources are declining, when the existing pattern of resources is changing, and when there is opportunity for promotions, politicking is more likely to surface.47 When organizations downsize to improve efficiency, resources must be reduced, and people may engage in political actions to safeguard what they have. But any changes, especially those that imply significant reallocation of resources within the o ­ rganization, are likely to stimulate conflict and increase politicking. The opportunity for promotions or advancement has consistently been found to encourage competition for a limited resource as people try to positively influence the decision outcome. Organizational cultures characterized by low trust, role ambiguity, unclear performance evaluation systems, zero-sum reward allocation practices, democratic decision making, high pressures for performance and self-serving senior managers will also create breeding grounds for politicking.48 The less trust within the organization, the higher the level of political behaviour and the more likely it will be of the illegitimate kind. So, high trust should suppress political behaviour in general and inhibit illegitimate actions in particular. Role ambiguity means that the prescribed behaviours of the employee are not clear. There are fewer limits, therefore, to the scope and functions of the employee’s political actions. Because political activities are defined as those not required as part of one’s formal role, the greater the role ambiguity, the more one can engage in political activity with little chance of it being visible. The practice of performance evaluation is far from a perfect science. The more that organizations use subjective criteria in the appraisal, emphasize a single outcome measure, or allow significant time to pass between the time of an action and its appraisal, the greater the likelihood that an employee can get away with politicking. Subjective performance criteria create ambiguity. The use of a single outcome measure encourages individuals to do whatever is necessary to ‘look good’ on that measure, but often at the expense of performing well on other important parts of the job that are not being appraised. The amount of time that elapses between an action and its appraisal is also a relevant factor. The longer the time, the more unlikely that the employee will be held accountable for his political behaviours.

EMPLOYABILITY AND POLITICS The realities of organizational life can sometimes be harsh. Consider the case of Scott Rosen. Scott believed that he was making progress as an assistant manager of a financial services company – until he noticed that his colleague, another assistant manager, was attempting to push him aside. On repeated occasions, Scott would observe his colleague speaking with their manager behind closed doors. During these conversations, Scott’s colleague would attempt to persuade the supervisor that he was incompetent and mismanaging his job, a practice that Scott found out after the fact. He recounts one specific instance of his colleague’s backstabbing efforts. When a subordinate asked Scott a question to which he did not know the answer, his colleague would say to their supervisor, ‘I can’t believe he didn’t know something like that.’ On other occasions, after instructing a subordinate to complete a specific task, Scott’s colleague would say, ‘I wouldn’t make you do something like that.’

What was the end result of such illegitimate political tactics? Scott was demoted, an action that led him to resign shortly after, while his colleague was promoted. ‘Whatever I did, I lost,’ recounts Scott. As much as people wish this was not the case, incidents such as this do not appear to be uncommon in the workplace. Given today’s competitive work environment, co-workers may be using political games to move ahead. Common advice given to employees to deal with office politics is, ‘just don’t play’. But in reality avoiding politics may, as in Scott’s case, not be in the best interests of your career. Like it or not, it’s something that you need to understand and master to be sure of your own success. Source: Based on J. Sandberg, ‘Sabotage 101: the sinister art of backstabbing’, Wall Street Journal, 11 February 2004, p. B1.

Causes and consequences of political behaviour   381

The more that an organization’s culture emphasizes the zero-sum or win/lose approach to reward allocations, the more employees will be motivated to engage in politicking. The zero-sum approach treats the reward ‘pie’ as fixed so that any gain one person or group achieves has to come at the expense of another person or group. If I win, you must lose! If €15,000 in annual pay rises is to be distributed among five employees, then any employee who gets more than €3,000 takes money away from one or more of the others. Such a practice encourages making others look bad and increasing the visibility of what you do. Finally, when employees see the people on top engaging in political behaviour, especially when they do so successfully and are rewarded for it, a climate is created that supports politicking. Politicking by top management, in a sense, gives permission to those lower in the organization to play politics by implying that such behaviour is acceptable.

How do people respond to organizational politics? Trish O’Donnell loves her job as a writer on a weekly television comedy series but hates the internal politics. ‘A couple of the writers here spend more time kissing up to the executive producer than doing any work. And our head writer clearly has his favourites. While they pay me a lot and I get to really use my creativity, I’m sick of having to be on alert for backstabbers and constantly having to self-promote my contributions. I’m tired of doing most of the work and getting little of the credit.’ Are Trish O’Donnell’s comments typical of people who work in highly politicized workplaces? We all know of friends or relatives who regularly complain about the politics at their job. But how do people in general react to organizational politics? Let’s look at the evidence. In our discussion earlier in this chapter of factors that contribute to political behaviour, we focused on the favourable outcomes for individuals who successfully engage in politicking. But for most people – who have modest political skills or are unwilling to play the politics game – outcomes tend to be predominantly negative. Figure 13.3 summarizes the extensive research on the relationship between organizational politics and individual outcomes.49 There is, for instance, very strong evidence indicating that perceptions of organizational politics are negatively related to job satisfaction.50 The perception of politics also tends to increase job anxiety and stress. This seems to be due to the perception that, by not engaging in politics, a person may be losing ground to others who are active politickers; or, conversely, because of the additional pressures individuals feel because of having entered into and competing in the political arena.51 Not surprisingly, when politicking becomes too much to handle, it can lead to employees quitting.52 Finally, there is evidence suggesting that politics leads to self-reported declines in employee performance. This may occur because employees perceive political environDecreased job ments to be unfair, which demotivates them.53 satisfaction In addition to these conclusions, several interesting qualifiers have been noted. First, the politics–performance relationship appears to be moderated by an individual’s understanding of Increased Organizational the ‘hows’ and ‘whys’ of organizational politics. ‘An individual anxiety and stress politics may who has a clear understanding of who is responsible for making threaten decisions and why they were selected to be the decision makers employees would have a better understanding of how and why things Increased happen the way they do than someone who does not underturnover stand the decision-making process in the organization.’54 When both politics and understanding are high, performance is likely to increase because the individual will see political actions as an opportunity. This is consistent with what you might expect Reduced performance among individuals with well-honed political skills. But when understanding is low, individuals are more likely to see politics as a threat, which would have a negative effect on job Figure 13.3  Employee responses to organizational performance.55 politics

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defensive behaviours Reactive and protective behaviours to avoid action, blame or change.

Second, political behaviour at work moderates the effects of ethical leadership.56 One study found that male employees were more responsive to ethical leadership and showed the most citizenship behaviour when levels of both politics and ethical leadership were high. Women, on the other hand, appear most likely to engage in citizenship behaviour when the environment is consistently ethical and apolitical. Third, when politics is seen as a threat and consistently responded to with defensiveness, negative outcomes are almost sure to surface eventually. When people perceive politics as a threat rather than as an opportunity, they often respond with defensive behaviours – reactive and protective behaviours to avoid action, blame or change.57 And defensive behaviours are often associated with negative feelings towards the job and work environment.58 In the short run, employees may find that defensiveness protects their self-interest. But in the long run, it wears them down. People who consistently rely on defensiveness find that, eventually, it is the only way they know how to behave. At that point, they lose the trust and support of their peers, bosses, employees and clients.

Defensive behaviours Avoiding action ●

●

● ●

●

Overconforming. Strictly interpreting your responsibility by saying things like, ‘The rules clearly state. . .’ or ‘This is the way we’ve always done it.’ Buck passing. Transferring responsibility for the execution of a task or decision to someone else. Playing dumb. Avoiding an unwanted task by falsely pleading ignorance or inability. Stretching. Prolonging a task so that one person appears to be occupied – for example, turning a two-week task into a four-month job. Stalling. Appearing to be more or less supportive publicly while doing little or nothing privately.

Avoiding blame ●

●

●

●

●

Buffing. This is a nice way to refer to ‘covering your rear’. It describes the practice of rigorously documenting activity to project an image of competence and thoroughness. Playing safe. Evading situations that may reflect unfavourably. It includes taking on only projects with a high probability of success, having risky decisions approved by superiors, qualifying expressions of judgement and taking neutral positions in conflicts. Justifying. Developing explanations that lessen one’s responsibility for a negative outcome and/or apologizing to demonstrate remorse. Scapegoating. Placing the blame for a negative outcome on external factors that are not entirely blameworthy. Misrepresenting. Manipulation of information by distortion, embellishment, deception, selective presentation or obfuscation.

Avoiding change ● ●

Prevention. Trying to prevent a threatening change from occurring. Self-protection. Acting in ways to protect one’s self-interest during change by guarding information or other resources.

Impression management 7  Apply impression management techniques.

We know that people have an ongoing interest in how others perceive and evaluate them. For  example, Europeans spend billions of Euros on diets, health club memberships and cosmetics – often intended to make them more attractive to others. Being perceived positively

Causes and consequences of political behaviour   383

impression management (IM) The process by which individuals attempt to control the impression others form of them.

by others should have benefits for people in organizations. It might, for instance, help them initially to get the jobs they want in an organization and, once hired, to get favourable evaluations, superior salary increases and more rapid promotions. In a political context, it might help sway the distribution of advantages in their favour. The process by which individuals attempt to control the impression others form of them is called impression management (IM).59 Is everyone concerned with IM? No! Who, then, might we predict to engage in IM? No surprise here. It’s our old friend, the high self-monitor.60 Low self-monitors tend to present images of themselves that are consistent with their personalities, regardless of the beneficial or detrimental effects for them. In contrast, high self-monitors are good at reading situations and moulding their appearances and behaviour to fit each situation. If you want to control the impression others form of you, what techniques can you use? The following section summarizes some of the most popular IM techniques and provides an example of each.

Impression management (IM) techniques ●

Conformity – Agreeing with someone else’s opinion to gain his or her approval is a form of ingratiation. Example: A manager tells his boss, ‘You’re absolutely right on your reorganization plan for the western regional office. I couldn’t agree with you more.’

●

Favours – Doing something nice for someone to gain that person’s approval is a form of ingratiation. Example: A salesperson says to a prospective client, ‘I’ve got two tickets to the theatre tonight that I can’t use. Take them. Consider it a thank-you for taking the time to talk with me.’

●

Excuses – Explanations of a predicament-creating event aimed at minimizing the apparent severity of the predicament is a defensive IM technique. Example: A sales manager says to her boss, ‘We failed to get the ad in the paper on time, but no one responds to those ads anyway.’

●

Apologies – Admitting responsibility for an undesirable event and simultaneously seeking to get a pardon for the action is a defensive IM technique. Example: An employee says to his boss, ‘I’m sorry I made a mistake on the report. Please forgive me.’

●

Self-promotion – Highlighting one’s best qualities, downplaying one’s deficits and calling attention to one’s achievements is a self-focused IM technique. Example: A salesperson tells his boss, ‘Matt worked unsuccessfully for three years to try to get that account. I sewed it up in six weeks. I’m the best closer this company has.’

●

Enhancement – Claiming that something you did is more valuable than most other members of the organizations would think is a self-focused IM technique. Example: A journalist tells his editor, ‘My work on this celebrity divorce story was really a major boost to our sales’ (even though the story only made it to page 3 in the entertainment section).

●

Flattery – Complimenting others about their virtues in an effort to make oneself appear perceptive and likeable is an assertive IM technique. Example: A new sales trainee says to her peer, ‘You handled that client’s complaint so tactfully! I could never have handled that as well as you did.’

●

Exemplification – Doing more than you need to in an effort to show how dedicated and hard working you are is an assertive IM technique. Example: An employee sends emails from his work computer when he works late so that his supervisor will know how long he’s been working.

Keep in mind that when people engage in IM, they are sending a false message that might be true under other circumstances.61 Excuses, for instance, may be offered with sincerity. Referring to the example above, you can actually believe that ads contribute little to sales in

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your region. But misrepresentation can have a high cost. If you ‘cry wolf’ once too often, no one is likely to believe you when the wolf really comes. So the impression manager must be cautious not to be perceived as insincere or manipulative.62 Consider the effect of implausible name-dropping as an example of this principle. Participants in a study in Switzerland disliked an experimental confederate who claimed to be a personal friend of the well-liked Swiss tennis star Roger Federer, but they generally liked confederates who just said they were fans.63 Another study found that when managers attributed an employee’s citizenship behaviours to impression management, they actually felt angry (probably because they felt manipulated) and gave subordinates lower performance ratings. When managers attributed the same behaviours to prosocial values and concern about the organization, they felt happy and gave higher performance ratings.64 In sum, people don’t like to feel others are manipulating them through impression management, so such tactics should be employed with caution.

Who is the ‘real’ Bernie Madoff? Bernard (Bernie) Madoff hit the news headlines in 2009 for all the wrong reasons. A former stockbroker and investment adviser, he managed to defraud thousands of investors over a period of at least 30 years. Although it is unlikely the exact amount of the fraud will ever be known, most estimates put the loss to investors at around €15 billion. When sentenced to 150 years in prison the extent of his lavish lifestyle was revealed. Houses in France, Manhattan and Florida; a yacht moored in the French Riviera; shares in two private jets; jewellery; and art worth many millions of euros. In the aftermath of the fraud, individuals had lost their life savings, and many businesses and charities (who were recipients of Madoff’s ‘generosity’) were forced to close.

OB IN THE NEWS But how could someone be so successful in conning people? It seems to be difficult to get a sense of what Madoff was actually like in person. The numerous news articles paint a confusing picture. Some say he was charming and charismatic, others that he was frightening, controlling and aloof. What they agree upon was that he could move equally well in the circles of politicians, Wall Street power brokers, financial regulators and investors large and small. It seems that Madoff was like a chameleon. He was very attuned to his image and could change at will depending on who he was talking to and what he wanted from them. The real Bernie Madoff was a master at impression management.

Most of the studies undertaken to test the effectiveness of IM techniques have related it to two criteria: interview success and performance evaluations. Let’s consider each of these. The evidence indicates that most job applicants use IM techniques in interviews65 and that, when IM behaviour is used, it works.66 In one study, for instance, interviewers felt that applicants for a position as a customer service representative who used IM techniques performed better in the interview, and they seemed somewhat more inclined to hire these people.67 Moreover, when the researchers considered applicants’ credentials, they concluded that it was the IM techniques alone that influenced the interviewers. That is, it didn’t seem to matter if applicants were well or poorly qualified. If they used IM techniques, they did better in the interview. Some IM techniques work better than others in the interview. Researchers have compared applicants who used IM techniques that focused on promoting one’s accomplishments (called self-promotion) to applicants who used techniques that focused on complimenting the interviewer and finding areas of agreement (referred to as ingratiation). In general, applicants appear to use self-promotion more than ingratiation.68 What’s more, self-promotion tactics may be more important to interviewing success. Applicants who work to create an appearance of competence by enhancing their accomplishments, taking credit for successes and explaining away failures do better in interviews. These effects reach beyond the interview: applicants who use more self-promotion tactics also seem to get more follow-up job-site visits, even after adjusting for grade-point average, gender and job type. Ingratiation also works well in interviews, meaning that applicants who compliment the interviewer, agree with their opinions and emphasize areas of fit do better than those who don’t.69 In terms of performance ratings, the picture is quite different. Ingratiation is positively related to performance ratings, meaning that those who ingratiate with their supervisors get higher performance evaluations. However, self-promotion appears to backfire: those who

Mapping your political career   385

self-promote actually seem to receive lower performance evaluations.70 There is an important qualifier to this general result. It appears that individuals high in political skill are able to translate IM into higher performance appraisals, whereas those lower in political skill are more likely to be hurt by their IM attempts.71 Another study of 760 boards of directors found that individuals who ingratiate themselves to current board members (express agreement with the director, point out shared attitudes and opinions, compliment the director) increase their chances of landing on a board.72 What explains these results? If you think about them, they make sense. Ingratiating always works because everyone – both interviewers and supervisors – likes to be treated nicely. However, self-promotion may work only in interviews and backfire on the job because whereas the interviewer has little idea whether you’re being accurate about your accomplishments, the supervisor knows because it’s their job to observe you. Thus, if you’re going to self-promote, remember that what works in an interview will not always work once you’re on the job.

The ethics of behaving politically 8  Determine whether a political action is ethical.

Although there are no clear-cut ways to differentiate ethical from unethical politicking, there are some questions you should consider. For example, what is the utility of engaging in politicking? Sometimes we engage in political behaviours for little reason. For example, we may claim to have met famous people we haven’t just to become the focus of a group conversation. Outright lies like this may be a rather extreme example of impression management, but many of us have distorted information to make a favourable impression. The point is that before we do so, one thing to keep in mind is whether it’s really worth the risk. Another question to ask is this: How does the utility of engaging in the political behaviour balance out any harm (or potential harm) it will do to others? For example, complimenting a supervisor on their appearance to curry favour is probably much less harmful than grabbing credit for a project that is deserved by others. Finally, does the political activity conform to standards of equity and justice? Sometimes it is hard to weigh the costs and benefits of a political action, but its ethicality is clear. The department head who inflates the performance evaluation of a favoured employee and deflates the evaluation of a disfavoured employee – and then uses these evaluations to justify giving the former a big pay rise and nothing to the latter – has treated the disfavoured employee unfairly. Unfortunately, the answers to these questions are often argued in ways to make unethical practices seem ethical. Powerful people, for example, can become very good at explaining selfserving behaviours in terms of the organization’s best interests. Similarly, they can persuasively argue that unfair actions are really fair and just. Our point is that immoral people can justify almost any behaviour. Those who are powerful, articulate and persuasive are most vulnerable because they are likely to be able to get away with unethical practices successfully. When faced with an ethical dilemma regarding organizational politics, try to consider the preceding issues (is playing politics worth the risk and will others be harmed in the process?). If you have a strong power base, recognize the ability of power to corrupt. Remember that it’s a lot easier for the powerless than the powerful to act ethically, if for no other reason than they typically have very little political discretion to exploit.

Mapping your political career As we have seen, politics are not just for politicians. You can use the concepts presented in this chapter is some very tangible ways we have outlined. However, there is another application: you. One of the most useful ways to think about power and politics is in terms of your own career. Think about your career in your organization of choice. What are your ambitions?

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Jamie Operations

Jia Sales

Anna Senior VP, Jamie’s boss Mark Jamie’s former co-worker

You

Zack Finance

Marty IT

Lane HR

Jamie Operations

Chris Jamie’s spouse

CJ Jamie’s favourite blogger

Green is a close connection. Gold is a loose connection. Red is no connection at all.

Tamar Drew’s best friend

Area of detail

Figure 13.4  Drawing your political map Source: Based on Clark, ‘A campaign strategy for your career’, Harvard Business Review, November 2012, pp. 131–4.

Who has the power to help you get there? What is your relationship with these people? The best way to answer these questions is with a political map, which can help you sketch out your relationships with the people upon whom your career depends. Figure 13.4 contains such a political map. Let’s walk through it. Assume that your future promotion depends on five people, including Jamie, your immediate supervisor. As you can see in the map, you have a close relationship with Jamie (you would be in real trouble otherwise). You also have a close relationship with Zack in Finance. However, for the others, you either have a loose relationship (Lane), or none at all (Jia, Marty). One obvious implication of this map is to formulate a plan for more influence over, and a closer relationship with, these people. How might you do that? The map also provides for a useful way to think about that. Assume that the five individuals have their own networks. In this case, though, assume these aren’t so much power networks as in your case, but influence networks representing your knowledge of the people who influence them. One of the best ways to influence people is indirectly. What if you played in a tennis league with Mark, Jamie’s former co-worker who you know remains friends with Jamie? To influence Mark, in many cases, may also be to influence Marty. Why not post an entry on CJ’s blog? This same analysis can then be completed with the other four decision makers. Of course, this map doesn’t show you everything you need to know – no map does. For example, rarely would all five people have the same amount of power. Moreover, maps are harder to construct in the era of large social networks. Try to keep this basic, to the people who really matter to your career. All of this may seem a bit Machiavellian to you. However, remember, only one person gets the promotion, and your competition may have a map of his or her own. As we noted in the

POINT/COUNTERPOINT   387

early part of the chapter, power and politics are a part of organizational life. To decide not to play is deciding not to be effective. Better to be explicit about it with a political map than to proceed as if power and politics didn’t matter.

Summary An effective manager accepts the political nature of organizations. Some people are significantly more politically astute than others, meaning that they are aware of the underlying politics and can manage impressions. Those who are good at playing politics can be expected to get higher performance evaluations and, hence, larger salary increases and more promotions than the politically naïve or inept. The politically astute are also likely to exhibit higher job satisfaction and be better able to neutralize job stressors. Few employees relish being powerless in their job and organization. People respond differently to the various power bases. Expert and referent power are derived from an individual’s personal qualities. In contrast, coercion, reward and legitimate power are essentially ­organizationally derived. Competence especially appears to offer wide appeal, and its use as a power base results in high performance by group members.

IMPLICATIONS FOR MANAGERS If you want to get things done in a group or an organization, it helps to have power. Here are several suggestions for how to deal with power in your own work life: ●

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● ●

●

As a manager who wants to maximize your power, you will want to increase others’ dependence on you. You can, for instance, increase your power in relation to your boss by developing knowledge or a skill she needs and for which she perceives no ready substitute. You will not be alone in attempting to build your power bases. Others, particularly employees and peers, will be seeking to increase your dependence on them, while you are trying to minimize it and increase their dependence on you. The result is a continual battle. Try to avoid putting others in a position where they feel they have no power. By assessing behaviour in a political framework, you can better predict the actions of others and use that information to formulate political strategies that will gain advantages for you and your work unit. Consider that employees who have poor political skills or are unwilling to play the politics game generally relate perceived organizational politics to lower job satisfaction and self-reported performance, increased anxiety and higher turnover. Therefore, if you are adept at organiz­ ational politics, help your employees understand the importance of becoming politically savvy.

Managing impressions is unethical

POINT/COUNTERPOINT

POINT Managing impressions is wrong for both ethical and practical reasons. First, managing impressions is just another name for lying. Don’t we have a responsibility, both to ourselves and to others, to present ourselves as we really are? The Australian

philosopher Tony Coady wrote, ‘Dishonesty has always been perceived in our culture, and in all cultures but the most bizarre, as a central human vice.’ Immanuel Kant’s categorical imperative asks us to consider the following: if you want to know whether telling a lie on a particular occasion is ­justifiable,

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you must try to imagine what would happen if everyone were to lie. Surely you would agree that a world in which no one lies is preferable to one in which lying is common because in such a world, we could never trust anyone. Thus, we should try to present the truth as best we can. Impression management goes against this virtue. Practically speaking, impression management generally backfires in the long run. Remember Sir Walter Scott’s quote, ‘Oh what a tangled web we weave, when first we practise to deceive!’ Once we start to distort the facts, where do we stop? One of the world’s leading hotel executives was forced to resign with immediate effect from InterContinental Hotels Group (IHG) after being confronted about misleading claims he had made about his academic qualifications when he

joined the business. The shock departure of Patrick Imbardelli came just five weeks after IHG announced he was to be promoted to the board in recognition of his fast-growing division’s importance within the multinational group.73 People are most satisfied with their jobs when their values match the culture of the organizations. If either side misrepresents itself in the interview process, then odds are, people won’t fit in the organizations they choose. What’s the benefit in this? This doesn’t imply that a person shouldn’t put their best foot forward. But that means exhibiting qualities that are good no matter the context – being friendly, being positive and self-confident, being qualified and competent, while still being honest.

COUNTERPOINT Oh, come on. Get off your high horse. Everybody fudges to some degree in the process of applying for a job. One British survey of 3,000 curriculum vitae’s found two-thirds of them contained inaccuracies.74 If you really told the interviewer what your greatest weakness or worst mistake was, you’d never get hired. What if you answered, ‘I find it hard to get up in the morning and get to work’? These sorts of ‘white lies’ are expected and act as a kind of social lubricant. If we really knew what people were thinking, we’d go crazy. Moreover, you can quote all the philosophy you want, but sometimes it’s necessary to lie. You mean you wouldn’t lie to save the life of your family? It’s naive to think we can live in a world without lying. As an example, when an interviewer asks you what you earned on your previous job, that information will be used

against you, to pay you a salary lower than you deserve. Is it wrong to boost your salary a bit? Or would it be better to disclose your actual salary and be taken advantage of? The same goes for complimenting interviewers, agreeing with their opinions, and so forth. If an interviewer tells you, ‘We believe in community involvement,’ are you supposed to tell the interviewer you’ve never volunteered for anything? Of course you can go too far. We’re not advocating that people totally fabricate their backgrounds. What we are talking about here is a reasonable amount of enhancement. If we can help ourselves without doing any real harm, then impression management is not the same as lying and actually is something we should teach others.

QUESTIONS FOR REVIEW 1. What is power? How is leadership different from

power? 2. What are the similarities and differences among the

five bases of power? 3. What is the role of dependence in power relationships? 4. What are the nine most often identified power or influ-

ence tactics and their contingencies?

5. What is organizational politics? 6. What are the causes and consequences of political

behaviour? 7. What are some examples of impression management

techniques? 8. What standards can you use to determine whether a

political action is ethical?

EXPERIENTIAL EXERCISE POWER DYNAMICS IN TEAMS General context Power dynamics often exist in organizations at the team level, such that one work team or unit has much more power than another. In fact, power differences can be

as big between teams as within them. This exercise will simulate those dynamics, within the limitations of a classroom context.

ethical dilemma   389

Generate revenue pool Each student is to turn in a euro (or similar value of currency) to the instructor. This pool comprises the revenue of the organization, and €1 is equal to €1 million. (For purposes of distribution after the assignment, however, euros revert back to their original value.)

Form teams and understand different rules for different teams Students are assigned to one of three teams. Each team operates under different rules, as follows: ●

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●

Top team. Members of the top team are free to enter the space of either of the other teams. They are also free to communicate whatever they want, whenever they want. Members of the top team have the authority to make any change in the rules they want, at any time, with or without notice. Middle team. Members of the middle team may enter the space of the bottom team when they want. They must, however, request permission from the top team to enter the top team’s space (the top team can refuse). Bottom team. Members of the bottom team may not disturb the top team in any way unless specifically invited to. They do have the right to knock on the door of the middle team and request permission to communicate (which can also be refused).

Instructions Recall that the pool of money represents the revenue of the organization. The teams’ assignment is to distribute this revenue in the most effective way possible.

Before beginning, divide the money into thirds and physically give two-thirds of it to the top team, one-third to the middle team, and none to the bottom team.

Perform the assignment Teams go to their assigned spaces with 30 minutes to complete their assignment. The particulars of the assignment differ by team, in the following manner: ●

●

●

Top team. The top team is responsible for the overall effectiveness of the organization. In particular, this team is responsible for learning from the exercise and deciding how to use its money. Middle team. The middle team’s assignment is to assist the top team in providing for the overall welfare of the organization and deciding how to use its money. Bottom team. The bottom team’s assignment is to identify the organization’s resources and decide how best to provide for learning and the overall effectiveness of the organization.

Debriefing Each of the three teams chooses two representatives to go to the front of the class and discuss the following: 1. Summarize what occurred within and among the three

teams. 2. Is it different being in the top team than in the middle

team? If so, what are the differences your team perceived? 3. What lessons about power does this exercise teach us? 4. In your team’s opinion, does this exercise reflect, in

part, the reality of resource allocation decisions in organizations? Why or why not? Source: Based loosely on L. Bolman and T. E. Deal, Exchange, 3, 4 (1979), pp. 38–42. Reprinted by Permission of SAGE Publications, Inc.

ETHICAL DILEMMA SURVIVING IN TOUGH TIMES A survey revealed that some IT staff were so desperate to keep their jobs during the global recession that they would have resorted to haggling, bribery and blackmail. The Global Recession and its Effect on Work Ethics survey found that nearly half said they would use their security clearance to find redundancy lists or bribe a friend to do it for them if they feared for their job, and one in 10 said they would consider blackmailing their boss to keep their job. Adam Bosnian from the company who conducted the survey, Cyber-Ark, warned HR departments to reassess

security clearance and access to important documents. ‘Employers have a right to expect loyalty from their workforce, but this works both ways. In these dark days, when everyone is jittery, especially with layoffs at the top of most corporate agendas, the instinct is to look out for number one,’ said Bosnian. When times get tough, such as in a recession, is it more acceptable to be unethical? Do you think people get more political in these times? Source: Based on G. Logan, ‘IT staff would resort to haggling, bribery and blackmail to keep jobs’, Personnel Today, 3 December 2008.

390  13 Power and politics

Barry’s peer becomes his boss As Barry looked out the window of his office in Toronto, the gloomy October skies obscured his usual view of CN Tower. ‘That figures,’ Barry thought to himself – his mood was just as gloomy. Five months ago, last May, Barry’s company, CTM, a relatively small but growing technology company, reorganized itself. Although such reorganizations often imperil careers, Barry felt the change only improved his position. Barry’s co-worker, Raphael, was promoted to a different department, which made sense because Raphael had been with the company for a few more years and had worked with the CEO on a successful project. Because Raphael was promoted and their past work roles were so similar, Barry thought his own promotion was soon to come. However, six weeks ago, Barry’s boss left. Raphael was transferred back to the same department and became Barry’s boss. Although Barry felt a bit overlooked, he knew he was still relatively junior in the company and felt that his good past relationship with Raphael would bode well for his future prospects. The past six weeks, however, had brought nothing but disappointment. Although Raphael often told Barry he was doing a great job, drawing from several observations, Barry felt that opinion was not being shared with the higher-ups. Worse, a couple of Barry’s friends in the company showed Barry several emails where Raphael had taken credit for Barry’s work.

Delegate power or keep it close? Samantha Parks is the owner and CEO of Sparks, a small agency that develops advertising, promotions and marketing materials for high-fashion firms. Parks has tended to keep a tight rein on her business, overseeing most projects from start to finish. However, as the firm has grown, she has found it necessary to delegate more and more decisions to her associates. She’s recently been approached by a hairstyling chain that wants a comprehensive redefinition of its entire marketing and promotions look. Should Samantha try to manage this project in her traditional way, or should she delegate major parts to her employees? Most managers confront this question at some point in their careers. Some experts propose that top executives need to stay very close to the creative core of their ­b usiness, which means that even if their primary responsibility is to manage, CEOs should never cede too much control to committees of creative individuals or they can lose sight of the firm’s overall future direction. Moreover, executives who do fall out of touch with the creative process risk being passed over by a new generation of

CASE INCIDENT 1 ‘Raphael is not the person I thought he was,’ thought Barry. What was his future in the company if no one saw the outcomes of his hard work? How would it affect his career to work for someone who apparently was willing to do anything to get ahead, even at others’ expense? He thought about looking for work, but that prospect only darkened his mood further. He liked the company. He felt he did good work there. As Barry looked again out his window, a light rain began to fall. The CN Tower was no more visible than before. He just didn’t know what to do.

Questions 1. Should Barry complain about his treatment? To whom? If he did complain, what power tactics should Barry use?

2. Studies have shown that those prone to complaining or ‘whining’ tend to have less power in an organization. Do you think whining leads to diminished power and influence, or the other way around? How can Barry avoid appearing to be a whiner?

3. Do you think Barry should look for another job? Why or why not?

CASE INCIDENT 2 ‘plugged in’ employees who better understand how the business really works. Others offer the opposite advice, saying it’s not a good idea for a CEO to ‘sweat the small stuff’ like managing individual client accounts or projects. These experts advise executives to identify everything they can ‘outsource’ to other employees and to delegate as much as possible. By eliminating trivial tasks, executives will be better able to focus their attention on the most important decision making and control aspects of their jobs, which will help the business and also ensure that the top executive maintains control over the functions that really matter. These pieces of advice are not necessarily in conflict with one another. The real challenge is to identify what you can delegate effectively without ceding too much power and control away from the person with the unifying vision. That is certainly easier said than done, though. Source: Based on M. L. Tushman, W. K. Smith and A. Binns, ‘The ambidextrous CEO’, Harvard Business Review, June 2011, pp. 74–9; and S. Bogan, Find your focus’, Financial Planning, February 2011, p. 72.

endnotes   391

Questions 1. If you were Samantha Parks, how would you prioritize which projects or parts of projects to delegate?

2. In explaining what makes her decisions hard, Parks said, ‘I hire good people, creative people, to run these projects, and I worry that they will see my oversight and authority as

interfering with their creative process.’ How can she deal with these concerns without giving up too much control?

3. Should executives try to control projects to maintain their position of authority? Do they have a right to control projects and keep in the loop on important decisions just so they can remain in charge?

ENDNOTES 1 R. M. Kanter, ‘Power failure in management circuits’, Harvard Business Review, July–August 1979, p. 65. 2 J. Pfeffer, ‘Understanding power in organizations’, California Management Review, Winter 1992, p. 35. 3 Based on B. M. Bass, Bass & Stogdill’s Handbook of Leadership, 3rd edn (New York: The Free Press, 1990). 4 J. R. P. French Jr and B. Raven, ‘The bases of social power’, in D. Cartwright (ed.), Studies in Social Power (Ann Arbor, MI: University of Michigan, Institute for Social Research, 1959), pp. 150–67; B. J. Raven, ‘The bases of power: origins and recent developments’, Journal of Social Issues, Winter 1993, pp. 227–51; and G. Yukl, ‘Use power effectively’, in E. A. Locke (ed.), Handbook of Principles of Organizational Behavior (Malden, MA: Blackwell, 2004), pp. 242–47. 5 E. A. Ward, ‘Social power bases of managers: emergence of a new factor’, Journal of Social Psychology, February 2001, pp. 144–7. 6 S. R. Giessner and T. W. Schubert, ‘High in the hierarchy: how vertical location and judgments of leaders’ power are interrelated’, Organizational Behavior and Human Decision Processes, 104, 1 (2007), pp. 30–44. 7 P. M. Podsakoff and C. A. Schriesheim, ‘Field studies of French and Raven’s bases of power: critique, reanalysis, and suggestions for future research’, Psychological Bulletin, May 1985, pp. 387–411; T. R. Hinkin and C. A. Schriesheim, ‘Development and application of new scales to measure the French and Raven (1959) bases of social power’, Journal of Applied Psychology, August 1989, pp. 561–67; and P. P. Carson, K. D. Carson and C. W. Roe, ‘Social power bases: a meta-analytic examination of interrelationships and outcomes’, Journal of Applied Social Psychology, 23, 14 (1993), pp. 1150–69. 8 S. Perman, ‘Translation advertising: where shop meets hip hop’, Time, 30 August 2010. 9 R. E. Emerson, ‘Power–dependence relations’, American Sociological Review, February 1962, pp. 31–41. 10 H. Mintzberg, Power In and Around Organizations (Upper Saddle River, NJ: Prentice-Hall, 1983), p. 24. 11 R. M. Cyert and J. G. March, A Behavioral Theory of the Firm (Upper Saddle River, NJ: Prentice-Hall, 1963). 12 C. Perrow, ‘Departmental power and perspective in industrial firms’, in M. N. Zald (ed.), Power in Organizations (Nashville, TN: Vanderbilt University Press, 1970). 13 See, for example, D. Kipnis and S. M. Schmidt, ‘Upwardinfluence styles: relationship with performance evaluations, salary, and stress’, Administrative Science Quarterly, December 1988, pp.  528–42; G. Yukl and J. B. Tracey, ‘Consequences of influence tactics used with subordinates, peers, and the boss’,

Journal of Applied Psychology, August 1992, pp. 525–35; G. Blickle, ‘Influence tactics used by subordinates: an empirical analysis of the Kipnis and Schmidt subscales’, Psychological Reports, February 2000, pp. 143–54; and Yukl, ‘Use power effectively’, pp. 249–52. 14 G. Yukl, Leadership in Organizations, 5th edn (Upper Saddle River, NJ: Prentice-Hall, 2002), pp. 141–74; G. R. Ferris, W. A. Hochwarter, C. Douglas, F. R. Blass, R. W. Kolodinksy and D. C. Treadway, ‘Social influence processes in organizations and human resource systems’, in G. R. Ferris and J. J. Martocchio (eds), Research in Personnel and Human Resources Management, vol. 21 (Oxford, UK: JAI Press/Elsevier, 2003), pp. 65–127; and C. A. Higgins, T. A. Judge and G. R. Ferris, ‘Influence tactics and work outcomes: a meta-analysis’, Journal of Organizational Behavior, March 2003, pp. 89–106. 15 C. M. Falbe and G. Yukl, ‘Consequences for managers of using single influence tactics and combinations of tactics’, Academy of Management Journal, July 1992, pp. 638–53. 16 R. E. Petty and P. Briñol, ‘Persuasion: from single to multiple to metacognitive processes’, Perspectives on Psychological Science, 3, 2 (2008), pp. 137–47. 17 J. Badal, ‘Getting a raise from the boss’, Wall Street Journal, 8 July 2006, pp. B1, B5. 18 Yukl, Leadership in Organizations. 19 Ibid. 20 Falbe and Yukl, ‘Consequences for managers of using single influence tactics and combinations of tactics’. 21 A. W. Kruglanski, A. Pierro and E. T. Higgins, ‘Regulatory mode and preferred leadership styles: how fit increases job satisfaction’, Basic and Applied Social Psychology, 29, 2 (2007), pp. 137–49; and A. Pierro, L. Cicero and B. H. Raven, ‘Motivated compliance with bases of social power’, Journal of Applied Social Psychology, 38, 7 (2008), pp. 1921–44. 22 P. P. Fu and G. Yukl, ‘Perceived effectiveness of influence tactics in the United States and China’, Leadership Quarterly, Summer 2000, pp. 251–66; O. Branzei, ‘Cultural explanations of individual preferences for influence tactics in cross-cultural encounters’, International Journal of Cross Cultural Management, August 2002, pp. 203–18; G. Yukl, P. P. Fu and R. McDonald, ‘Crosscultural differences in perceived effectiveness of influence tactics for initiating or resisting change’, Applied Psychology: An International Review, January 2003, pp. 66–82; and P. P. Fu, T. K. Peng, J. C. Kennedy and G. Yukl, ‘Examining theCpreferences of influence tactics in Chinese societies: a comparison of Chinese managers in Hong Kong, Taiwan, and Mainland China’, Organizational Dynamics, 33, 1 (2004), pp. 32–46.

392  13 Power and politics 23 C. J. Torelli and S. Shavitt, ‘Culture and concepts of power’, Journal of Personality and Social Psychology, 99, 4 (2010), pp. 703–23. 24 Fu and Yukl, ‘Perceived effectiveness of influence tactics in the United States and China.’ 25 S. J. Heine, ‘Making sense of East Asian self-enhancement’, Journal of Cross-Cultural Psychology, September 2003, pp. 596–602. 26 G. R. Ferris, D. C. Treadway, P. L. Perrewé, R. L. Brouer, C. Douglas and S. Lux, ‘Political skill in organizations’, Journal of Management, June 2007, pp. 290–320; K. J. Harris, K. M. Kacmar, S. Zivnuska and J. D. Shaw, ‘The impact of political skill on impression management effectiveness’, Journal of Applied Psychology, 92, 1 (2007), pp. 278–85; W. A. Hochwarter, G. R. Ferris, M. B. Gavin, P. L. Perrewé, A. T. Hall and D. D. Frink, ‘Political skill as neutralizer of felt accountability–job tension effects on job performance ratings: a longitudinal investigation’, Organizational Behavior and Human Decision Processes, 102 (2007), pp. 226–39; D. C. Treadway, G. R. Ferris, A. B. Duke, G. L. Adams and J. B. Tatcher, ‘The moderating role of subordinate political skill on supervisors’ impressions of subordinate ingratiation and ratings of subordinate interpersonal facilitation’, Journal of Applied Psychology, 92, 3 (2007), pp. 848–55. 27 M. C. Andrews, K. M. Kacmar and K. J. Harris, ‘Got political skill? The impact of justice on the importance of political skills for job performance’, Journal of Applied Psychology, 94, 6 (2009), pp. 1427–37. 28 C. Anderson, S. E. Spataro and F. J. Flynn, ‘Personality and organizational culture as determinants of influence’, Journal of Applied Psychology, 93, 3 (2008), pp. 702–10. 29 Y. Cho and N. J. Fast, ‘Power, defensive denigration, and the assuaging effect of gratitude expression’, Journal of Experimental Social Psychology, 48, 2012, pp. 778–82. 30 M. Pitesa and S. Thau, ‘Masters of the Universe: how power and accountability influence self-serving decisions under moral hazard’, Journal of Applied Psychology, 98 (2013), pp. 550–8; and N. J. Fast, N. Sivanathan, D. D. Mayer and A. D. Galinsky, ‘Power and overconfident decision-making’, Organizational Behavior and Human Decision Processes, 117 (2012), pp. 249–60. 31 A. Grant, ‘Yes, power corrupts, but power also reveals’, Government Executive, 23 May 2013, downloaded 23 May 2013 from www.govexec.com/. 32 J. K. Maner, M. T. Gaillot, A. J. Menzel and J. W. Kunstman, ‘Dispositional anxiety blocks the psychological effects of power’, Personality and Social Psychology Bulletin, 38 (2012), pp. 1383–95. 33 N. J. Fast, N. Halevy and A. D. Galinsky, ‘The destructive nature of power without status’, Journal of Experimental Social Psychology, 48 (2012), pp. 391–4. 34 T. Seppälä, J. Lipponen, A. Bardi and A. Pirttilä-Backman, ‘Change-oriented organizational citizenship behaviour: an interactive product of openness to change values, work unit identification, and sense of power’, Journal of Occupational and Organizational Psychology, 85 (2012), pp. 136–55. 35 K. A. DeCelles, D. S. DeRue, J. D. Margolis and T. L. Ceranic, ‘Does power corrupt or enable? when and why power facilitates self-interested behavior’, Journal of Applied Psychology, 97 (2012), pp. 681–9. 36 S. A. Culbert and J. J. McDonough, The Invisible War: Pursuing Self-Interest at Work (New York: Wiley, 1980), p. 6.

37 Mintzberg, Power In and Around Organizations, p. 26. See also K. M. Kacmar and R. A. Baron, ‘Organizational politics: the state of the field, links to related processes, and an agenda for future research’, in G. R. Ferris (ed.), Research in Personnel and Human Resources Management, vol. 17 (Greenwich, CT: JAI Press, 1999), pp. 1–39; and G. R. Ferris, D. C. Treadway, R. W. Kolokinsky, W. A. Hochwarter, C. J. Kacmar and D. D. Frink, ‘Development and validation of the political skill inventory’, Journal of Management, February 2005, pp. 126–52. 38 S. B. Bacharach and E. J. Lawler, ‘Political alignments in organizations’, in R. M. Kramer and M. A. Neale (eds), Power and Influence in Organizations (Thousand Oaks, CA: Sage Publications, 1998), pp. 68–9. 39 A. Drory and T. Romm, ‘The definition of organizational politics: a review’, Human Relations, November 1990, pp. 1133–54; and R. S. Cropanzano, K. M. Kacmar and D. P. Bozeman, ‘Organizational politics, justice, and support: their differences and similarities’, in R. Cropanzano and K. M. Kacmar (eds), Organizational Politics, Justice and Support: Managing Social Climate at Work (Westport, CT: Quorum Books, 1995), pp. 1–18; and G. R. Ferris and W. A. Hochwarter, ‘Organizational politics’, in S. Zedeck (ed.), APA Handbook of Industrial and Organizational Psychology, vol. 3 (Washington, DC: American Psychological Association, 2011), pp. 435–59. 40 D. A. Buchanan, ‘You stab my back, I’ll stab yours: management experience and perceptions of organization political behavior’, British Journal of Management, 19, 1 (2008), pp. 49–64. 41 J. Pfeffer, Power in Organizations (New York: HarperCollins, 1981). 42 Drory and Romm, ‘The definition of organizational politics’. 43 S. M. Rioux and L. A. Penner, ‘The causes of organizational citizenship behavior: a motivational analysis’, Journal of Applied Psychology, December 2001, pp. 1306–14; and M. A. Finkelstein and L. A. Penner, ‘Predicting organizational citizenship behavior: integrating the functional and role identity approaches’, Social Behavior & Personality, 32, 4 (2004), pp. 383–98. 44 A. D. Galinsky, J. C. Magee, M. E. Inesi and D. H. Gruenfeld, ‘Power and perspectives not taken’, Psychological Science, December 2006, pp. 1068–74. 45 See, for example, G. R. Ferris, G. S. Russ and P. M. Fandt, ‘Politics in organizations’, in R. A. Giacalone and P. Rosenfeld (eds), Impression Management in the Organization (Hillsdale, NJ: Lawrence Erlbaum, 1989), pp. 155–6; and W. E. O’Connor and T. G. Morrison, ‘A comparison of situational and dispositional predictors of perceptions of organizational politics’, Journal of Psychology, May 2001, pp. 301–12. 46 Farrell and Petersen, ‘Patterns of political behavior in organizations’, p. 408. 47 G. R. Ferris and K. M. Kacmar, ‘Perceptions of organizational politics’, Journal of Management, March 1992, pp. 93–116. 48 See, for example, P. M. Fandt and G. R. Ferris, ‘The management of information and impressions: when employees behave opportunistically’, Organizational Behavior and Human Decision Processes, February 1990, pp. 140–58; Ferris, Russ and Fandt, ‘Politics in organizations’, p. 147; and J. M. L. Poon, ‘Situational antecedents and outcomes of organizational politics perceptions’, Journal of Managerial Psychology, 18, 2 (2003), pp. 138–55. 49 Ferris, Russ and Fandt, ‘Politics in organizations’; and K. M. Kacmar, D. P. Bozeman, D. S. Carlson and W. P. Anthony, ‘An examination of the perceptions of organizational politics model:

endnotes   393 replication and extension’, Human Relations, March 1999, pp. 383–416. 50 W. A. Hochwarter, C. Kiewitz, S. L. Castro, P. L. Perrewé and G. R. Ferris, ‘Positive affectivity and collective efficacy as moderators of the relationship between perceived politics and job satisfaction’, Journal of Applied Social Psychology, May 2003, pp. 1009–35; C. C. Rosen, P. E. Levy and R. J. Hall, ‘Placing perceptions of politics in the context of feedback environment, employee attitudes, and job performance’, Journal of Applied Psychology, 91, 1 (2006), pp. 211–30. 51 G. R. Ferris, D. D. Frink, M. C. Galang, J. Zhou, K. M. Kacmar and J. L. Howard, ‘Perceptions of organizational politics: prediction, stress-related implications, and outcomes’, Human Relations, February 1996, pp. 233–66; E. Vigoda, ‘Stress-related aftermaths to workplace politics: the relationships among politics, job distress, and aggressive behavior in organizations’, Journal of Organizational Behavior, August 2002, pp. 571–91. 52 C. Kiewitz, W. A. Hochwarter, G. R. Ferris and S. L. Castro, ‘The role of psychological climate in neutralizing the effects of organizational politics on work outcomes’, Journal of Applied Social Psychology, June 2002, pp. 1189–207; and M. C. Andrews, L. A. Witt and K. M. Kacmar, ‘The interactive effects of organizational politics and exchange ideology on manager ratings of retention’, Journal of Vocational Behavior, April 2003, pp. 357–69. 53 S. Aryee, Z. Chen and P. S. Budhwar, ‘Exchange fairness and employee performance: an examination of the relationship between organizational politics and procedural justice’, Organizational Behavior & Human Decision Processes, May 2004, pp. 1–14; and K. L. Kacmar, D. P. Bozeman, D. S. Carlson and W. P. Anthony, ‘An examination of the perceptions of organizational politics model: replication and extension’, Human Relations, 52, pp. 383–416. 54 Kacmar, Bozeman, Carlson and Anthony, ‘An examination of the perceptions of organizational politics model’, p. 389. 55 Ibid., p. 409. 56 K. M. Kacmar, D. G. Bachrach, K. J. Harris, and S. Zivnuska, ‘Fostering good citizenship through ethical leadership: exploring the moderating role of gender and organizational politics’, Journal of Applied Psychology, 96 (2011), pp. 633–42. 57 B. E. Ashforth and R. T. Lee, ‘Defensive behavior in organizations: a preliminary model’, Human Relations, July 1990, pp. 621–48. 58 M. Valle and P. L. Perrewé, ‘Do politics perceptions relate to political behaviors? Tests of an implicit assumption and expanded model’, Human Relations, March 2000, pp. 359–86. 59 See, for instance, W. L. Gardner and M. J. Martinko, ‘Impression management in organizations’, Journal of Management, June 1988), pp. 321–38; M. C. Bolino and W. H. Turnley, ‘More than one way to make an impression: exploring profiles of impression management’, Journal of Management, 29, 2 (2003), pp.  141– 60; S. Zivnuska, K. M. Kacmar, L. A. Witt, D. S. Carlson and V. K. Bratton, ‘Interactive effects of impression management and organizational politics on job performance’, Journal of Organizational Behavior, August 2004, pp. 627–40; and M. C. Bolino, K. M. Kacmar, W. H. Turnley and J. B. Gilstrap, ‘A multi-level review of impression management motives and behaviors’, Journal of Management, 34, 6 (2008), pp. 1080–109. 60 M. Snyder and J. Copeland, ‘Self-monitoring processes in organizational settings’, in R. A. Giacalone and P. Rosenfeld (eds), Impression Management in the Organization (Hillsdale, NJ: Lawrence Erlbaum, 1989), p. 11; A. Montagliani and

R. A. Giacalone, ‘Impression management and cross-cultural adaptation’, Journal of Social Psychology, October 1998, pp. 598–608; and W. H. Turnley and M. C. Bolino, ‘Achieved desired images while avoiding undesired images: exploring the role of self-monitoring in impression management’, Journal of Applied Psychology, April 2001, pp. 351–60. 61 M. R. Leary and R. M. Kowalski, ‘Impression management: a literature review and two-component model’, Psychological Bulletin, January 1990, pp. 34–47. 62 J. Ham and R. Vonk, ‘Impressions of impression management: evidence of spontaneous suspicion of ulterior motivation’, Journal of Experimental Social Psychology, 47, 2 (2011), pp. 466–71; and W. M. Bowler, J. R. B. Halbesleben and J. R. B. Paul, ‘If you’re close with the leader, you must be a brownnose: the role of leader–member relationships in follower, leader, and coworker attributions of organizational citizenship behavior motives’, Human Resource Management Review, 20, 4 (2010), pp. 309–16. 63 C. Lebherz, K. Jonas and B. Tomljenovic, ‘Are we known by the company we keep? Effects of name dropping on first impressions’, Social Influence, 4, 1 (2009), pp. 62–79. 64 J. R. B. Halbesleben, W. M. Bowler, M. C. Bolino and W. H Turnley, ‘Organizational concern, prosocial values, or impression management? How supervisors attribute motives to organizational citizenship behavior’, Journal of Applied Social Psychology, 40, 6 (2010), pp. 1450–89. 65 A. P. J. Ellis, B. J. West, A. M. Ryan and R. P. DeShon, ‘The use of impression management tactics in structural interviews: a function of question type?’, Journal of Applied Psychology, December 2002, pp. 1200–208. 66 Baron, ‘Impression management by applicants during employment interviews’; D. C. Gilmore and G. R. Ferris, ‘The effects of applicant impression management tactics on interviewer judgments’, Journal of Management, December 1989, pp. 557–64; C. K. Stevens and A. L. Kristof, ‘Making the right impression: a field study of applicant impression management during job interviews’, Journal of Applied Psychology, 80, 5, October 1995, pp. 587–606; and L. A. McFarland, A. M. Ryan and S. D. Kriska, ‘Impression management use and effectiveness across assessment methods’, Journal of Management, 29, 5 (2003), pp. 641–61; and Tsai, Chen and Chiu, ‘Exploring boundaries of the effects of applicant impression management tactics in job interviews’. 67 Gilmore and Ferris, ‘The effects of applicant impression management tactics on interviewer judgments’. 68 Stevens and Kristof, ‘Making the right impression: a field study of applicant impression management during job interviews’. 69 C. A. Higgins, T. A. Judge and G. R. Ferris, ‘Influence tactics and work outcomes: a meta-analysis’, Journal of Organizational Behavior, March 2003, pp. 89–106. 70 Ibid. 71 K. J. Harris, K. M. Kacmar, S. Zivnuska and J. D. Shaw, ‘The impact of political skill on impression management effectiveness’, Journal of Applied Psychology, 92, 1 (2007), pp. 278–85; and D. C. Treadway, G. R. Ferris, A. B. Duke, G. L. Adams and J. B. Thatcher, ‘The moderating role of subordinate political skill on supervisors’ impressions of subordinate ingratiation and ratings of subordinate interpersonal facilitation’, Journal of Applied Psychology, 92, 3 (2007), pp. 848–55. 72 J. D. Westphal and I. Stern, ‘Flattery will get you everywhere (especially if you are a male caucasian): how ingratiation,

394  13 Power and politics boardroom behavior, and demographic minority status affect additional board appointments of U.S. companies’, Academy of Management Journal, 50, 2 (2007), pp. 267–88. 73 S. Bowers and G. Wearden, ‘Hotels boss quits after lying on CV’, The Guardian, 15 June 2007.

74 ‘CV fibbers warning for employers’, BBC News, Friday 14 May 2004. Available at http://news.bbc.co.uk/1/hi/business/3711431. stm. Accessed 15 February 2009.

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CHAPTER 14 Conflict and negotiation Learning objectives After studying this chapter, you should be able to: 1 Differentiate between the traditional and interactionist views of conflict. 2 Describe the three types of conflict and the two loci of conflict. 3 Outline the conflict process. 4 Contrast distributive and integrative bargaining. 5 Apply the five steps of the negotiation process. 6 Show how individual differences influence negotiations. 7 Assess the roles and functions of third-party negotiations.

Truth springs from arguments amongst friends. David Hume

JAMIE DIMON AND THE LONDON WHALE

losses, many managers began to think the best way to avoid similar conflicts was to hide problems. In testimony before Carl Levin, the head of the US Senate banking committee, a senior regulator named Scott Waterhouse reported an episode in which Dimon berated Douglas Braunstein, Chase’s chief financial officer, for delivering negative reports. Here is an excerpt of the testimony: Levin: So apparently he [Dimon] had decided to stop the reports? Waterhouse: I took it that way, yes, sir. Levin: Did he raise his voice? Waterhouse: He did. Bloomberg via Getty Images

In the aftermath of the financial crisis of 2007–2009, JPMorgan Chase emerged as the largest U.S. bank – with a stronger competitive position than ever. Its stock price is nearly 20 per cent higher than when the meltdown began. In the past 10 years, it has never reported a quarterly loss and has paid a dividend to its shareholders every quarter, even during the dark days in 2008 and 2009. Yet JPMorgan Chase and its chief executive, Jamie Dimon, also committed one of the largest blunders in banking history – a €5.5 billion loss tied to the investments of a single, smallscale trader in the bank’s tower at Canary Wharf in east London. The trader, Bruno Iksil, tried covering his losses in derivatives trading and misleading his superiors about the extent of the damage. As his trades became larger and lost more, clients began to refer to Iksil as the ‘Whale’. Of course, figuring large in explanations for the London Whale losses are problems in financial decision making. Derivatives – investments meant to hedge against risk – are risky. Some people, however, have pointed to the conflict-averse culture at JPMorgan Chase as the main culprit in Iksil’s huge losses. Like any investment bank, JPMorgan Chase doesn’t like to lose money. After seeing colleagues rebuked for reporting

This may not seem like a big admission, but it revealed the tip of the iceberg of the contentious culture JPMorgan Chase didn’t want anyone to talk about. As a result, no one wanted to be the bearer of bad news. This interacted with two other credos in JPMorgan Chase’s culture: ‘Always have a follow-up list’ and ‘Get stuff done’. But what happens when there are problems to report? What if those problems are not amenable to instant checklists – what if resolving them requires some discussion, debate and perhaps even disagreement? Dimon is, by most reports and by the results, an excellent CEO. In discussing the London Whale, he says he himself didn’t encourage enough divergent thinking to work its way up the organization chart. In other words, he created a culture that didn’t tolerate opposing ideas and the communication of negative information. He told a Forbes reporter of several lessons he had learned: ‘Fighting complacency, asking hard questions instead of shying away from conflict, and matching controls and risk limits to the activities they govern.’ In the end, Iksil, his boss, and his boss’s boss were fired. In 2013, Dimon survived a vote by shareholders to replace him as chairman and he and JPMorgan Chase live to fight another day. ‘I intend to be here for many more years,’ Dimon says. But the London Whale saga does show what can happen when a culture becomes so conflict-averse that any information that might provoke a clash is squelched.

Sources: S. Schaefer, ‘Jamie Dimon: what I learned from the London Whale’, Forbes, 10 April 2013, downloaded 28 May 2013 from www.forbes.com/; J. Cassidy, ‘Will the London Whale swallow Jamie Dimon? New Yorker, 16 March 2013, downloaded 28 May 2013 from www.newyorker.com/; and W. D. Cohan and B. McLean, ‘Jamie Dimon on the line’, Vanity Fair, November 2012, downloaded 24 May 2013 from www.vanityfair.com/.

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As we see in the JP Morgan Chase example, the presence and absence of conflict and negotiation are often complex – and controversial – interpersonal processes. While we generally see conflict as a negative topic and negotiation as a positive one, what we deem positive or negative often depends on our perspective. We’ll explain the difference between negative and positive conflicts in this chapter and provide a guide to help you understand how conflicts develop and can be managed. We’ll also explain negotiation, a topic closely akin to conflict.

REFLECTION Think about a conflict situation you have been involved in. How did you deal with it?

A definition of conflict 1 Differentiate between the traditional and interactionist views of conflict.

conflict A process that begins when one party perceives that another party has negatively affected, or is about to negatively affect, something that the first party cares about.

There has been no shortage of definitions of conflict.1 Despite the divergent meanings the term has acquired, several common themes underlie most definitions. Conflict must be perceived by the parties to it; whether or not conflict exists is a perception issue. If no one is aware of a conflict, then it is generally agreed that no conflict exists. Additional commonalities in the definitions are opposition or incompatibility and some form of interaction. These factors set the conditions that determine the beginning point of the conflict process. We can define conflict, then, as a process that begins when one party perceives that another party has negatively affected, or is about to negatively affect, something that the first party cares about.2 This definition is purposely broad. It describes that point in any ongoing activity when an interaction ‘crosses over’ to become an interparty disagreement. It encompasses the wide range of conflicts that people experience in organizations – incompatibility of goals, differences over interpretations of facts, disagreements based on behavioural expectations and the like. Finally, our definition is flexible enough to cover the full range of conflict levels – from overt and violent acts to subtle forms of disagreement. There has been disagreement over the role of conflict in groups and organizations. One school of thought argues that conflict must be avoided – that it indicates a malfunctioning within the group. We call this the traditional view. Another perspective proposes not only that conflict can be a positive force in a group but that some conflict is absolutely necessary for a group to perform effectively. We label this the interactionist view. Let’s take a closer look at each.

The traditional view of conflict traditional view of conflict The belief that all conflict is harmful and must be avoided.

The traditional view of conflict was consistent with the attitudes that prevailed about group behaviour in the 1930s and 1940s. Conflict was seen as a dysfunctional outcome resulting from poor communication, a lack of openness and trust between people and the failure of managers to be responsive to the needs and aspirations of their employees. Conflict was discussed with the terms violence, destruction and irrationality. The view that all conflict is bad certainly offers a simple approach to looking at the behaviour of people who create conflict. Because all conflict is to be avoided, we need merely direct our attention to the causes of conflict and correct those malfunctions to improve group and organizational performance. Although research studies now provide strong evidence to dispute that this approach to conflict reduction results in high group performance, many of us still evaluate conflict situations using this outmoded standard.

Types and loci of conflict   399 interactionist view of conflict The belief that conflict is not only a positive force in a group but that it is also an absolute necessity for a group to perform effectively. functional conflict Conflict that supports the goals of the group and improves its performance. dysfunctional conflict Conflict that hinders group performance.

The interactionist view of conflict The interactionist view of conflict encourages conflict on the grounds that a harmonious, peaceful, tranquil and cooperative group is prone to becoming static, apathetic and nonresponsive to needs for change and innovation.3 The major contribution of the interactionist view, therefore, is encouraging group leaders to maintain an ongoing minimum level of conflict – enough to keep the group viable, self-critical and creative. The interactionist view does not propose that all conflicts are good. Rather, some conflicts support the goals of the group and improve its performance; these are functional conflict, constructive, forms of conflict. In addition, there are conflicts that hinder group performance; these are dysfunctional conflict, or destructive, forms of conflict. What differentiates functional from dysfunctional conflict? To a large degree, this depends on the type of conflict and the locus of conflict. Next we review each of these in turn.

1 in 4 of us have an ongoing difficult relationship at work, finds CIPD report Research from the CIPD, the professional body for HR and people development, highlights that one in three employees (38 per cent) have experienced some form of interpersonal conflict at work in the last year – this includes one in four (29 per cent) who have had isolated disputes or clashes and a further one in four (28 per cent) who report ongoing difficult relationships. The CIPD is warning that managers have a key role to play in diffusing tensions early on as workplace conflict can have a major impact on employee well-being and business outcomes, with as many as one in ten employees leaving their organization as a result. Jonny Gifford, Research Adviser at the CIPD, comments: ‘All too often, employers brush workplace conflict aside, putting it down to a difference of opinion. But it’s clear that

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it has a serious impact on our working relationships, wellbeing and productivity. Line managers have a crucial role to play here. For the most part they are seen as a positive influence in helping to create strong, healthy team relationships, but there’s still a clear case for developing managers and providing them with the skills they need. We need managers who can both build robust teams, where challenges can be made in a non-threatening way, and nip conflict in the bud before it has the chance to escalate. These are not generally seen as part of a core skills set for line managers and that view needs to change.’ Source: ‘1 in 4 of us have an ongoing difficult relationship at work, finds CIPD report’, CIPD, 2 April 2015, see http://www.cipd.co.uk/pressoffice/press-releases/managing-conflict-010415.aspx.

Types and loci of conflict One means of understanding conflict is to identify the type of disagreement, or what the 2  Describe the three conflict is about. Is it a disagreement about goals? Is it about people who just can’t get along? types of conflict and the two loci of conflict. Or is it about the best way to get things done? Although each conflict is unique, researchers task conflict Conflict over content and goals of the work. relationship conflict Conflict based on interpersonal relationships.

have classified conflicts into three categories: task, relationship or process. Task conflict relates to the content and goals of the work. Relationship conflict focuses on interpersonal relationships. Process conflict relates to how the work gets done. Studies demonstrate that relationship conflicts are almost always dysfunctional.4 Why? It appears that the friction and interpersonal hostilities inherent in relationship conflicts increases personality clashes and decreases mutual understanding, which hinders the completion of organizational tasks. Of the three types, relationship conflicts also appear to be the most psychologically exhausting to individuals.5 Because they tend to revolve around personalities, you can see how relationship conflicts can become destructive. After all, we can’t expect to change our

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SWNS

Dr Eva Michalak was left with post-traumatic stress and severe depression after she endured five years of harassment and false allegations from senior doctors in reaction to covering for her maternity leave. An employment tribunal ruled that the behaviour amounted to unlawful sexual and race discrimination as well as unfair dismissal. It ordered hospital chiefs to pay more than €6 million in compensation for her treatment and loss of future earnings and pension. This is an example of relationship conflict.

process conflict Conflict over how work gets done.

dyadic conflict Conflict that occurs between two people. intragroup conflict Conflict that occurs within a group or team. intergroup conflict Conflict between different groups or teams.

Source: Richard Alleyne, ‘Hospital pays out record £4.4m to doctor sacked after having a baby’, Telegraph, 16 December 2011.

co-workers’ personalities, and we would generally take offence at criticisms directed at who we are as opposed to how we behave. While scholars agree that relationship conflict is dysfunctional, there is considerably less agreement as to whether task and process conflicts are functional. Early research suggested that task conflict within groups was associated with higher group performance, but a recent review of 116 studies found that task conflict was essentially unrelated to group performance. However, there were factors that could create a relationship between conflict and ­performance.6 One such factor was whether the conflict included top management or occurred lower in the organization. Task conflict among top management teams was positively associated with their performance, whereas conflict lower in the organization was negatively associated with group performance. This review also found that it mattered whether other types of conflict were occurring at the same time. If task and relationship conflict occurred together, task conflict was more likely negative, whereas if task conflict occurred by itself, it more likely was positive. Finally, some scholars have argued that the strength of conflict is important – if task conflict is very low, people aren’t really engaged or addressing the important issues. If task conflict is too high, however, infighting will quickly degenerate into personality conflict. According to this view, moderate levels of task conflict are optimal. Supporting this argument, one study in China found that moderate levels of task conflict in the early development stage increased creativity in groups, but high levels decreased team performance.7 Finally, the personalities of the teams appear to matter. A recent study demonstrated that teams made up of individuals who are, on average, high in openness and emotional stability are better able to turn task conflict into increased group performance.8 The reason may be that open and emotionally stable teams can put task conflict in perspective and focus on how the variance in ideas can help solve the problem, rather than letting it degenerate into relationship conflicts. What about process conflict? Researchers found that process conflicts revolve around delegation and roles. Conflicts over delegation often revolve around shirking, and conflicts over roles can leave some group members feeling marginalized. Thus, process conflicts often become highly personalized and quickly devolve into relationship conflicts. It’s also true, of course, that arguing about how to do something takes time away from actually doing it. We’ve all been part of groups in which the arguments and debates about roles and responsibilities seem to go nowhere.

Loci of conflict Another way to understand conflict is to consider its locus, or where the conflict occurs. Here, too, there are three basic types. Dyadic conflict is conflict between two people. ­Intragroup conflict occurs within a group or team. Intergroup conflict is conflict between groups or teams.

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Nearly all the literature on task, relationship and process conflict considers intragroup conflict (within the group). That makes sense given that groups and teams often exist only to perform a particular task. However, it doesn’t necessarily tell us about the other loci of conflict. For example, research has found that for intragroup task conflict to influence performance within the team, it is important that the teams have a supportive climate in which mistakes aren’t penalized and every team member ‘[has] the other’s back’.9 But is this concept useful for understanding the effects of intergroup conflict for the organiz­­ation? Think about, say, football. For a team to adapt and improve, perhaps a certain amount of task conflict is good for team performance, especially when the team members support one another. But would we care whether members from one team supported members from another team? Probably not. In fact, if groups are competing with one another so that only one team can ‘win’, interteam conflict seems almost inevitable. When is that helpful, and when is it a concern? One study that did focus on intergroup conflict found an interplay between an individual’s position within a group and the way that individual managed conflict between groups. Group members who were relatively peripheral in their own groups were better at resolving conflicts between their group and another one. But this happened only when those peripheral members were still accountable to their group.10 Thus, being at the core of your work group does not necessarily make you the best person to manage conflict with other groups. Another intriguing question about loci is whether conflicts interact or buffer one another. Assume, for example, that Dana and Scott are on the same team. What happens if they don’t get along interpersonally (dyadic conflict) and their team also has high personality conflict? What happens to their team if two other team members, Shawn and Justin, do get along well? It’s also possible to ask this question at the intragroup and intergroup level. Intense intergroup conflict can be quite stressful to group members and might well affect the way they interact. One study found, for example, that high levels of conflict between teams caused individuals to focus on complying with norms within their teams.11 Thus, understanding functional and dysfunctional conflict requires not only that we identify the type of conflict; we also need to know where it occurs. It’s possible that while the concepts of task, relationship and process conflict are useful in understanding intragroup or even dyadic conflict, they are less useful in explaining the effects of intergroup conflict. In sum, the traditional view that all conflict should be eliminated is shortsighted. The interactionist view that conflict can stimulate active discussion without spilling over into negative, disruptive emotions is incomplete. Thinking about conflict in terms of type and locus helps us realize that it is probably inevitable in most organizations, and when it does occur, we can attempt to make it as productive as possible.

The conflict process 3  Outline the conflict process. conflict process A process that has five stages: potential opposition or incompatibility, cognition and personalization, intentions, behaviour and outcomes.

The conflict process has five stages: potential opposition or incompatibility, cognition and personalisation, intentions, behaviour and outcomes (see Figure 14.1).

Stage I: Potential opposition or incompatibility The first step in the conflict process is the presence of conditions that create opportunities for conflict to arise. They need not lead directly to conflict, but one of these conditions is necessary if conflict is to surface. For simplicity’s sake, these conditions (which we can also look at as causes or sources of conflict) have been condensed into three general categories: communication, structure and personal variables.

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Stage I

Stage II

Potential opposition Cognition and or incompatibility personalization

Antecedent conditions • Communication • Structure • Personal variables

Perceived conflict Felt conflict

Stage III

Stage IV

Stage V

Intentions

Behaviour

Outcomes

Conflict-handling intentions • Competing • Collaborating • Compromising • Avoiding • Accommodating

Overt conflict • Party’s behaviour • Other’s reaction

Increased group performance Decreased group performance

Figure 14.1  The conflict process

Communication Katrina had worked in supply-chain management for three years. She enjoyed her work in large part because her boss, Florin, was a great guy to work for. Then Florin got promoted six months ago and Ardian took his place. Katrina says her job is a lot more frustrating now. ‘Florin and I thought alike. It’s not that way with Ardian. He tells me something and I do it. Then he tells me I did it wrong. I think he means one thing but says something else. It’s been like this since the day he arrived. I don’t think a day goes by when he isn’t yelling at me for something. You know, there are some people you just find it easy to communicate with. Well, Ardian isn’t one of those!’ Katrina’s comments illustrate that communication can be a source of conflict.12 They represent the opposing forces that arise from semantic difficulties, misunderstandings and ‘noise’ in the communication channels. Much of this discussion can be related to our comments on communication in Chapter 11. These factors, along with jargon and insufficient information, can be barriers to communication and potential antecedent conditions to conflict. The potential for conflict has also been found to increase with too little or too much communication. Communication is functional up to a point, after which it is possible to overcommunicate, increasing the potential for conflict.

Structure Susanna and Jane both work at the CF Furniture Store – a large discount furniture retailer. Susanna is a salesperson on the floor, and Jane is the company credit manager. The two women have known each other for years and have much in common: they live close to each other, and their oldest daughters attend the same school and are best friends. In reality, if Susanna and Jane had different jobs, they might be best friends themselves, but these two women are consistently fighting battles with each other. Susanna’s job is to sell furniture, and she does a very good job. But most of her sales are made on credit. Because Jane’s job is to make sure the company minimizes credit losses, she regularly has to turn down the credit application of a customer with whom Susanna has just closed a sale. It’s nothing personal between Susanna and Jane; the requirements of their jobs just bring them into conflict. The conflicts between Susanna and Jane are structural in nature. The term structure is used, in this context, to include variables such as size, degree of specialization in the tasks assigned to group members, jurisdictional clarity, member–goal compatibility, leadership styles, reward systems and the degree of dependence between groups. Research indicates that size and specialization act as forces to stimulate conflict. The larger the group and the more specialized its activities, the greater the likelihood of conflict. Tenure and conflict have been found to be inversely related. The potential for conflict tends to be greatest when group members are younger and when turnover is high. The greater the ambiguity in precisely defining where responsibility for actions lies, the greater the potential for conflict to emerge. Such jurisdictional ambiguities increase intergroup fighting for control of resources and territory. Diversity of goals among groups is also a major

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source of conflict. When groups within an organization seek diverse ends, some of which – like sales and credit at the CF Furniture Store – are inherently at odds, there are increased opportunities for conflict. Reward systems, too, are found to create conflict when one member’s gain is at another’s expense. Finally, if a group is dependent on another group (in contrast to the two being mutually independent) or if interdependence allows one group to gain at another’s expense, opposing forces are stimulated.

Personal variables Have you ever met someone to whom you took an immediate disliking? You disagreed with most of the opinions they expressed. Even insignificant characteristics – the sound of their voice, the smirk when they smiled, their personality – annoyed you. We’ve all met people like that. When you have to work with such individuals, there is often the potential for conflict. For example, Philip Hayton, one of the BBC’s longest-serving newscasters quit the corporation after 37 years because of a personality clash with his co-presenter Kate Silverton after working with her for less than three months. Hayton said, ‘It boils down to incompatibility. We did four hours of live TV every day and you have to like each other.’13 Our last category of potential sources of conflict is personal variables, which include personality, emotions and values. People high in the personality traits of disagreeableness, neuroticism or self-monitoring are prone to tangle with other people more often – and to react poorly when conflicts occur.14 One global survey found that nearly half of all the employees surveyed cited personality clashes as the primary cause of workplace conflict.15 Emotions can also cause conflict even when they are not directed at others. An employee who shows up to work irate from her hectic morning commute may carry that anger into her workday and result in a tension-filled meeting.16 People are furthermore more likely to cause conflict when their values are opposed.

Stage II: Cognition and personalization

perceived conflict Awareness by one or more parties of the existence of conditions that create opportunities for conflict to arise. felt conflict Emotional involvement in a conflict that creates anxiety, tenseness, frustration or hostility.

intentions Decisions to act in a given way.

If the conditions cited in Stage I negatively affect something that one party cares about, then the potential for opposition or incompatibility becomes actualized in the second stage. As we noted in our definition of conflict, perception is required. Therefore, one or more of the parties must be aware of the existence of the antecedent conditions. However, because a conflict is perceived conflict does not mean that it is personalized. In other words, ‘A may be aware that B and A are in serious disagreement … but it may not make A tense or anxious, and it may have no effect whatsoever on A’s affection toward B.’17 It is at the felt conflict level, when individuals become emotionally involved, that parties experience anxiety, tension, frustration or hostility. Keep in mind two points. First, Stage II is important because it’s where conflict issues tend to be defined. This is the place in the process where the parties decide what the conflict is about.18 In turn, this ‘sense making’ is critical because the way a conflict is defined goes a long way towards establishing the sort of outcomes that might settle it. For instance, if I define our salary disagreement as a zero-sum situation (that is, if you get the increase in pay you want, there will be just that amount less for me) I am going to be far less willing to compromise than if I frame the conflict as a potential win/win situation (that is, the euros in the salary pool might be increased so that both of us could get the added pay we want). So the definition of a conflict is important because it typically delineates the set of possible settlements. Our second point is that emotions play a major role in shaping perceptions.19 For example, negative emotions have been found to produce oversimplification of issues, reductions in trust and negative interpretations of the other party’s behaviour.20 In contrast, positive feelings have been found to increase the tendency to see potential relationships among the elements of a problem, to take a broader view of the situation and to develop more innovative solutions.21

Stage III: Intentions Intentions intervene between people’s perceptions and emotions and their overt behaviour.

These intentions are decisions to act in a given way.22

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Intentions are separated out as a distinct stage because you have to infer the other’s intent to know how to respond to that other’s behaviour. A lot of conflicts are escalated merely by one party attributing the wrong intentions to the other party. In addition, there is typically a great deal of slippage between intentions and behaviour, so behaviour does not always accurately reflect a person’s intentions. Figure 14.2 represents one author’s effort to identify the primary conflict-handling intentions. Using two dimensions – cooperativeness (the degree to which one party attempts to satisfy the other party’s concerns) and assertiveness (the degree to which one party attempts to satisfy their own concerns) – five conflict-handling intentions can be identified: competing (assertive and uncooperative), collaborating (assertive and cooperative), avoiding (unassertive and uncooperative), accommodating (unassertive and cooperative) and compromising (midrange on both assertiveness and cooperativeness).23

Competing

collaborating A situation in which the parties in a conflict each desire to satisfy fully the concerns of all parties. avoiding The desire to withdraw from or suppress a conflict. accommodating The willingness of one party in a conflict to place the opponent’s interests above their own.

Collaborating When the parties in conflict each desire to fully satisfy the concerns of all parties, there is cooperation and a search for a mutually beneficial outcome. In collaborating, the intention of the parties is to solve a problem by clarifying differences rather than by accommodating various points of view. If you attempt to find a win/win solution that allows both parties’ goals to be completely achieved, that’s collaborating.

Avoiding A person may recognize that a conflict exists and want to withdraw from it or suppress it. Examples of avoiding include trying to just ignore a conflict and avoiding others with whom you disagree.

Accommodating When one party seeks to appease an opponent, that party may be willing to place the opponent’s interests above his or her own. In other words, in order for the relationship to be maintained, one party needs to be willing to be self-sacrificing. We refer to this intention as accommodating. Supporting someone else’s opinion despite your reservations about it, for example, would represent accommodating.

Assertiveness Unassertive Assertive

competing A desire to satisfy one’s interests, regardless of the impact on the other party to the conflict.

When one person seeks to satisfy his or her own interests, regardless of the impact on the other parties to the conflict, that person is competing. Competing is when you, for example, win a bet and your opponent loses.

Collaborating

Competing

Compromising

Avoiding

Accommodating

Uncooperative

Cooperative Cooperativeness

Figure 14.2  Dimensions of conflict-handling intentions Source: K. Thomas, ‘Conflict and negotiation processes in organizations’, in M. D. Dunnette and L. M. Hough (eds), Handbook of Industrial and Organizational Psychology, 2nd edn, vol. 3 (Palo Alto, CA: Consulting Psychologists Press, 1992), p. 668. Used with permission from Nicholas Brealey Publishing.

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Compromising compromising A situation in which each party to a conflict is willing to give up something.

When each party to a conflict seeks to give up something, sharing occurs, resulting in a compromised outcome. In compromising, there is no clear winner or loser. Rather, there is a willingness to ration the object of the conflict and accept a solution that provides incomplete satisfaction of both parties’ concerns. The distinguishing characteristic of compromising, therefore, is that each party intends to give up something. Intentions are not always fixed. During the course of a conflict, they might change if the parties are able to see the other’s point of view or because of an emotional reaction to the behaviour of the other party. However, research indicates that people have an underlying disposition to handle conflicts in certain ways.24 Specifically, individuals have preferences among the five conflict-handling intentions just described; these preferences tend to be relied on quite consistently, and a person’s intentions can be predicted rather well from a combination of intellectual and personality characteristics.

Stage IV: Behaviour

conflict management The use of resolution and stimulation techniques to achieve the desired level of conflict.

When most people think of conflict situations, they tend to focus on Stage IV because this is where conflicts become visible. The behaviour stage includes the statements, actions and reactions made by the conflicting parties. These conflict behaviours are usually overt attempts to implement each party’s intentions. But these behaviours have a stimulus quality that is separate from intentions. As a result of miscalculations or unskilled enactments, overt behaviours sometimes deviate from original intentions.25 It helps to think of Stage IV as a dynamic process of interaction. For example, you make a demand on me, I respond by arguing, you threaten me, I threaten you back, and so on. Figure  14.3 provides a way of visualizing conflict behaviour. All conflicts exist somewhere along this continuum. At the lower part of the continuum are conflicts characterized by subtle, indirect and highly controlled forms of tension. An illustration might be a student questioning in class a point the instructor has just made. Conflict intensities escalate as they move upward along the continuum until they become highly destructive. Strikes, riots and wars clearly fall in this upper range. For the most part, you should assume that conflicts that reach the upper ranges of the continuum are almost always dysfunctional. Functional conflicts are typically confined to the lower range of the continuum. If a conflict is dysfunctional, what can the parties do to de-escalate it? Or, conversely, what options exist if conflict is too low and needs to be increased? This brings us to conflict-­ management techniques. Table 14.1 lists the major resolution and stimulation techniques that allow managers to control conflict levels. Note that several of the resolution techniques were described earlier as conflict-handling intentions. This, of course, shouldn’t be surprising. Under ideal conditions, a person’s intentions should translate into comparable behaviours.

Annihilatory conflict

Overt efforts to destroy the other party Aggressive physical attacks Threats and ultimatums Assertive verbal attacks Overt questioning or challenging of others Minor disagreements or misunderstandings

No conflict

Figure 14.3  Conflict-intensity continuum Sources: Based on S. P. Robbins, Managing Organizational Conflict: A Nontraditional Approach (Upper Saddle River, NJ: Prentice Hall, 1974), pp. 93–7; and F. Glasi, ‘The process of conflict escalation and the roles of third parties’, in G. B. J. Bomers and R. Peterson (eds), Conflict Management and Industrial Relations (Boston, MA: Kluwer-Nijhoff, 1982), pp. 119–40.

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Table 14.1  Conflict-management techniques Conflict-resolution techniques Problem solving

Face-to-face meeting of the conflicting parties for the purpose of identifying the problem and resolving it through open discussion.

Superordinate goals

Creating a shared goal that cannot be attained without the cooperation of each of the conflicting parties.

Expansion of resources

When a conflict is caused by the scarcity of a resource – say, money, promotion, opportunities, office space – expansion of the resource can create a win/win solution.

Avoidance

Withdrawal from, or suppression of, the conflict.

Smoothing

Playing down differences while emphasizing common interests between the conflicting parties.

Compromise

Each party to the conflict gives up something of value.

Authoritative command

Management uses its formal authority to resolve the conflict and then communicates its desires to the parties involved.

Altering the human variable

Using behavioural change techniques such as human relations training to alter attitudes and behaviours that cause conflict.

Altering the structural variables

Changing the formal organization structure and the interaction patterns of conflicting parties through job redesign, transfers, creation of coordinating positions and the like.

Conflict-stimulation techniques Communication

Using ambiguous or threatening messages to increase conflict levels.

Bringing in outsiders

Adding employees to a group whose backgrounds, values, attitudes or managerial styles differ from those of present members.

Restructuring the organization

Realigning work groups, altering rules and regulations, increasing interdependence and making similar structural changes to disrupt the status quo.

Appointing a devil’s advocate

Designating a critic to purposely argue against the majority positions held by the group.

Source: Based on S. P. Robbins, Managing Organizational Conflict: A Nontraditional Approach (Upper Saddle River, NJ: Prentice Hall, 1974), pp. 59–89.

Stage V: Outcomes The action–reaction interplay between the conflicting parties results in consequences. As our model (see Figure 14.1) demonstrates, these outcomes may be functional in that the conflict results in an improvement in the group’s performance or dysfunctional in that it hinders group performance.

Functional outcomes How might conflict act as a force to increase group performance? It is hard to visualize a situation in which open or violent aggression could be functional. But there are a number of instances in which it’s possible to envision how low or moderate levels of conflict could improve the effectiveness of a group. A global survey revealed that three-quarters of employees have seen a conflict lead to something positive. Four out of ten found that it led to a better understanding of other people, while a third experienced improved working relationships, and three out of ten even found that conflict led to a better solution to some problem or challenge. Indeed, one in ten say that conflict resulted in the birth of a major innovation or new idea at work.26 Note that all our examples focus on task and process conflicts and exclude the relationship variety. Conflict is constructive when it improves the quality of decisions, stimulates creativity and innovation, encourages interest and curiosity among group members, provides the

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medium through which problems can be aired and tensions released, and fosters an environment of self-evaluation and change. The evidence suggests that conflict can improve the quality of decision making by allowing all points, particularly the ones that are unusual or held by a minority, to be weighed in important decisions.27 Conflict is an antidote for groupthink. It doesn’t allow the group to passively agree decisions that may be based on weak assumptions, inadequate consideration of relevant alternatives or other debilities. Conflict challenges the status quo and therefore furthers the creation of new ideas, promotes reassessment of group goals and activities, and increases the probability that the group will respond to change. For an example of a company that suffered because it had too little functional conflict, you don’t have to look further than Samsung, the world’s largest conglomerate. In the late 1990s, Kun-Hee Lee, Samsung’s chairman and chief executive, invested around 10 billion euros to break into the automotive industry. None of his loyal executives challenged the decision. Not only was Mr Lee a forceful personality, he was also a car buff. After only a year into production, Samsung Motors folded.28 Research studies in diverse settings confirm the functionality of conflict. Consider the following findings. Conflict can positively relate to productivity. For instance, it was demonstrated that, among established groups, performance tended to improve more when there was conflict among members than when there was fairly close agreement. The investigators observed that when groups analysed decisions that had been made by the individual members of that group, the average improvement among the high-conflict groups was 73 per cent greater than that of those groups characterized by low-conflict conditions.29 Others have found similar results: groups composed of members with different interests tend to produce higher-quality solutions to a variety of problems than do homogeneous groups.30 The preceding leads us to predict that the increasing cultural diversity of the workforce should provide benefits to organizations. And that’s what the evidence indicates. Research demonstrates that heterogeneity among group and organization members can increase creativity, improve the quality of decisions and facilitate change by enhancing member flexibility.31

Dysfunctional outcomes The destructive consequences of conflict on a group’s or an organization’s performance are generally well known. A reasonable summary might state: uncontrolled opposition breeds discontent, which acts to dissolve common ties and eventually leads to the destruction of the group. And, of course, there is a substantial body of literature to document how conflict – the dysfunctional varieties – can reduce group effectiveness.32 Among the more undesirable consequences are a retarding of communication, reductions in group cohesiveness and subordin­ ation of group goals to the primacy of infighting among members. All forms of conflict – even the functional varieties – appear to reduce group member satisfaction and trust.33 When active discussions turn into open conflicts between members, information sharing between members decreases significantly.34 At the extreme, conflict can bring group functioning to a halt and potentially threaten the group’s survival.

FACE THE FACTS ●

The average number of hours per week employees spent on dealing with workplace conflict was 3.3 in both Germany and Ireland, 1.8 in the UK, France and Denmark, and 0.9 in the Netherlands.

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On average, the European worker spends one day a month dealing with conflict in some way (being involved in a dis­agreement, managing a conflict between co-workers, etc.).

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27 per cent of employees have seen conflict lead to personal attacks, and 25 per cent have seen it result in sickness or absence (in the non-profit sector this figure is 48 per cent). Nearly one in ten have seen conflict lead to a project failure.

Source: Fight, Flight or Face it? Celebrating the Effective Management of Conflict at Work, CIPD/OPP 2008.

Agencja Fotograficzna Caro/Alamy

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A lack of functional conflict was noted as a factor in the global financial crisis. A feature of the boom and bust was the breadth of institutions caught up in the crisis. The banks thundered forward en mass with little questioning of strategy from people within the banks.

We noted that diversity can usually improve group performance and decision making. However, if differences of opinion open up along demographic fault lines, harmful conflicts result and information sharing decreases.35 For example, if differences of opinion in a gender-diverse team line up so that men all hold one opinion and women hold another, group members tend to stop listening to one another. They fall into ingroup favouritism and won’t take the other side’s point of view into consideration. Managers in this situation need to pay special attention to these fault lines and emphasize the shared goals of the team.

Managing functional conflict

If managers recognize that in some situations conflict can be beneficial, what can they do to manage conflict effectively in their organizations? Let’s look at some approaches organizations are using to encourage their people to challenge the system and develop fresh ideas. One of the keys to minimizing counterproductive conflicts is recognizing when there really is a disagreement. Many apparent conflicts are due to people using different language to discuss the same general course of action. For example, someone in marketing might focus on ‘distribution problems’, while someone from operations will talk about ‘supply chain management’ to describe essentially the same issue. Successful conflict management recognizes these different approaches and attempts to resolve them by encouraging open, frank discussion focused on interests rather than issues (we’ll have more to say about this when we contrast distributive and integrative bargaining styles). Another approach is to have opposing groups pick parts of the solution that are most important to them and then focus on how each side can get its top needs satisfied. Neither side may get exactly what it wants, but each side will get the most important parts of its agenda.36 Groups that resolve conflicts successfully discuss differences of opinion openly and are prepared to manage conflict when it arises.37 The most disruptive conflicts are those that are never addressed directly. An open discussion makes it much easier to develop a shared perception of the problems at hand; it also allows groups to work towards a mutually acceptable solution. Managers need to emphasize shared interests in resolving conflicts, so groups that disagree with one another don’t become too entrenched in their points of view and start to take the conflicts personally. Groups with cooperative conflict styles and a strong underlying identification to the overall group goals are more effective than groups with a competitive style.38 Differences across countries in conflict resolution strategies may be based on collectivistic tendencies and motives.39 Collectivist cultures see people as deeply embedded in social situations, whereas individualist cultures see them as autonomous. As a result, collectivists are more likely to seek to preserve relationships and promote the good of the group as a whole. They will avoid direct expression of conflicts, preferring indirect methods for resolving differences of opinion. Collectivists may also be more interested in demonstrations of concern and working through third parties to resolve disputes, whereas individualists will be more likely to confront differences of opinion directly and openly. Some research does support this theory. Compared to collectivist Japanese negotiators, their more individualist US counterparts are more likely to see offers from their counterparts

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as unfair and to reject them. Another study revealed that whereas US managers were more likely to use competing tactics in the face of conflicts, compromising and avoiding are the most preferred methods of conflict management in China.40 Interview data, however, suggests that top management teams in Chinese high-technology firms prefer collaboration even more than compromising and avoiding.41 Having considered conflict – its nature, causes and consequences – we now turn to negotiation, which often resolves conflict.

Conflict and culture One major study of conflict at work questioned 5,000 full-time employees in nine countries: Belgium, Brazil, Denmark, France, Germany, Ireland, the Netherlands, the United Kingdom and the United States.42 The results revealed that dealing with conflict was something that a vast majority (85 per cent) of employees in all of these countries had to contend with. Here is a selection of the European findings.

Belgium The incidence of workplace conflict was found to be comparatively low and when there is a conflict a high percentage of employees sought to avoid disagreements. Suggesting a lack of functional conflict, Belgium had one of the highest proportions of workers who fail to experience any positive outcomes from conflict.

France Although French workers face as much conflict as those in other countries, they experienced fewer negative outcomes than most. They ranked among the lowest for conflicts that led to personal attacks, people leaving or colleagues getting fired. French workers were the most likely to avoid conflict and least likely to seek win/win situations. They are also the least apt to seek advice from colleagues or use a documented process. The research suggested that dealing with workplace conflict is something of a taboo in French organizations and point to the fact that employees had the least training of any country surveyed in how to manage conflict.

glOBal Germany Of all the countries analysed, German employees reported the most workplace conflict and the highest incidence of negative outcomes: almost twice as many say that conflict led to bullying or project failure as anywhere else in the research. A third said that it led to sickness or absence, compared to under a quarter elsewhere. Curiously, Germany is the only country in the study not to rank personality clashes as the most common cause of conflict. In the German workplace, according to employees there, stress is the number one factor underlying disputes.

The Netherlands Dutch employees experienced the lowest levels of conflict and were the least concerned about it than any other country in the study. By the same token, comparatively few had seen any positive outcomes emerge from a conflict. This suggests that the Dutch tendency to compromise when conflict does occur leads to generally neutral and middling outcomes for both parties.

United Kingdom Behind only the Dutch, employees in the UK are the next least likely to say they experience conflict. Like the Dutch, UK workers are most likely to deal with the situation by seeking to compromise. The research does suggest that the relatively low figure for experiencing conflict may be due to commonly attributed national characteristics such as a desire to avoid disharmony and a reluctance to get involved in conflict (or even to be aware that it’s happening).

Negotiation 4  Contrast distributive Negotiation permeates the interactions of almost everyone in groups and organizations. There’s the obvious: labour bargains with management. There’s the not-so-obvious: managers and integrative negotiate with employees, peers and bosses; salespeople negotiate with customers; purchasing bargaining. negotiation A process that occurs when two or more parties decide how to allocate scarce resources.

agents negotiate with suppliers. And there’s the subtle: an employee agrees to answer a colleague’s phone for a few minutes in exchange for future benefit. In today’s loosely structured organizations, in which members are increasingly finding themselves having to work with colleagues over whom they have no direct authority and with whom they may not even share a common boss, negotiation skills become critical. We can define negotiation as a process that occurs when two or more parties decide how to allocate scarce resources.43 Although we commonly think of the outcomes of negotiation in

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one-shot economic terms, like negotiating over the price of a car, every negotiation in organizations also affects the relationship between negotiators and the way negotiators feel about themselves.44 Depending on how much the parties are going to interact with one another, sometimes maintaining the social relationship and behaving ethically will be just as important as achieving an immediate outcome of bargaining. Note that we use the terms negotiation and bargaining interchangeably. In this section, we contrast two bargaining strategies, provide a model of the negotiation process, ascertain the role of individual differences in negotiation effectiveness and take a brief look at third-party negotiations.

Bargaining strategies There are two general approaches to negotiation – distributive bargaining and integrative bargaining.45 As Table 14.2 shows, distributive and integrative bargaining differ in their goal and motivation, focus, interests, information sharing and duration of relationship. Let’s define each and illustrate the differences.

Distributive bargaining

distributive bargaining Negotiation that seeks to divide up a fixed amount of resources; a win/lose situation. fixed pie The belief that there is only a set amount of goods or services to be divvied up between the parties.

You see a used car advertised for sale online that looks great. You go out to see the car. It’s perfect and you want it. The owner tells you the asking price. You don’t want to pay that much. The two of you then negotiate over the price. The negotiating strategy you’re engaging in is called distributive bargaining. Its most identifying feature is that it operates under zero-sum conditions. That is, any gain I make is at your expense and vice versa. In the used-car example, every euro you can get the seller to cut from the car’s price is a euro you save. Conversely, every euro more the seller can get from you comes at your expense. So the essence of distributive bargaining is negotiating over who gets what share of a fixed pie. By fixed pie, we mean that the bargaining parties believe there is only a set amount of goods or services to be divvied up. Therefore, fixed pies are zero-sum games in that every euro in one party’s pocket is a euro out of their counterpart’s pocket. When parties believe the pie is fixed, they tend to bargain distributively. Probably the most widely cited example of distributive bargaining is in labour-management negotiations over wages. Typically, labour’s representatives come to the bargaining table determined to get as much money as possible out of management. Because every cent more that labour negotiates increases management’s costs, each party bargains aggressively and treats the other as an opponent who must be defeated. The essence of distributive bargaining is depicted in Figure 14.4. Parties A and B represent two negotiators. Each has a target point that defines what he or she would like to achieve. Each also has a resistance point, which marks the lowest outcome that is acceptable – the point below which they would break off negotiations rather than accept a less-favourable settlement. The area between these two points makes up each one’s aspiration range. As long as there is

Table 14.2  Distributive versus integrative bargaining Bargaining characteristic

Distributive bargaining

Integrative bargaining

Goal

Get as much of the pie as possible

Expand the pie so that both parties are satisfied

Motivation

Win/lose

Win/win

Focus

Positions (‘I can’t go beyond this point on this issue.’)

Interests (‘Can you explain why this issue is so important to you?’)

Interests

Opposed

Congruent

Information sharing

Low (sharing information will only allow other party to take advantage)

High (sharing information will allow each party to find ways to satisfy interests of each party)

Duration of relationship

Short term

Long term

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Party A’s aspiration range Settlement range Party A’s target point

Party B’s resistance point

Party B’s aspiration range

Party A’s resistance point

Party B’s target point

Figure 14.4  Staking out the bargaining zone

some overlap between A’s and B’s aspiration ranges, there exists a settlement range in which each one’s aspirations can be met. When engaged in distributive bargaining, one of the best things you can do is to make the first offer, and to make it an aggressive one. Why is this so? One reason is that making the first offer shows power; research shows that individuals in power are much more likely to make initial offers, speak first at meetings, and thereby gain the advantage. Another reason was mentioned in Chapter 5. Recall that we discussed the anchoring bias, which is the tendency for people to fixate on initial information. Once that anchoring point is set, people fail to adequately adjust it based on subsequent information. A savvy negotiator sets an anchor with the initial offer, and scores of negotiation studies show that such anchors greatly favour the person who sets it.46 For example, say you have a job offer, and your prospective employer asks you what sort of starting salary you’d be looking for. You need to realize that you’ve just been given a great gift – you have a chance to set the anchor, meaning that you should ask for the highest salary that you think the employer could reasonably offer. For most of us, asking for a million euro’s is only going to make us look ridiculous, which is why we suggest being on the high end of what you think is reasonable. Too often, we err on the side of caution, being afraid of scaring off the employer and thus settling for too little. It is possible to scare off an employer, and it’s true that employers don’t like candidates to be assertive in salary negotiations, but liking isn’t the same as respect or doing what it takes to hire or retain someone.47 You should realize that what happens much more often is that we ask for less than what we could have obtained. Another distributive bargaining tactic is revealing a deadline. Consider the following example. Chloe is a human resources manager. She is negotiating salary with Andre, who is a highly sought after new hire. Because Andre knows the company needs him, he decides to ask for an extraordinary salary and many benefits. Chloe tells Ron that the company can’t meet his requirements. Andre tells Chloe he is going to have to think things over. Worried the company is going to lose Andre to a competitor, Chloe decides to tell Andre that she is under time pressure and that she needs to reach an agreement with him immediately, or she will have to offer the job to another candidate. Would you consider Chloe to be a savvy negotiator? Well, she is. Why? Negotiators who reveal deadlines speed concessions from their negotiating counterparts, making them reconsider their position. And even though negotiators don’t think this tactic works, in reality, negotiators who reveal deadlines do better.48

Integrative bargaining A sales representative for a women’s sportswear manufacturer has just closed a €10,000 order from a small clothing retailer. The sales rep calls in the order to her firm’s credit department. She is told that the firm can’t approve credit to this customer because of a past slow-payment record. The next day, the sales rep and the firm’s credit manager meet to discuss the problem. The sales rep doesn’t want to lose the business. Neither does the credit manager, but he also doesn’t want to get stuck with an uncollectible debt. The two openly review their options. After considerable discussion, they agree on a solution that meets both their needs: the credit manager will approve the sale, but the clothing store’s owner will provide a bank guarantee

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integrative bargaining Negotiation that seeks one or more settlements that can create a win/win solution.

that will ensure payment if the bill isn’t paid within 60 days. This sales-credit negotiation is an example of integrative bargaining. In contrast to distributive bargaining, integrative bargaining operates under the assumption that there are one or more settlements that can create a win/ win solution. In terms of intraorganizational behaviour, all things being equal, integrative bargaining is preferable to distributive bargaining. Why? Because the former builds long-term relationships. It bonds negotiators and allows them to leave the bargaining table feeling that they have achieved a victory. Distributive bargaining, however, leaves one party a loser. It tends to build animosities and deepen divisions when people have to work together on an ongoing basis. Research shows that over repeated bargaining episodes, when the ‘losing’ party feels positive about the negotiation outcome, he is much more likely to bargain cooperatively in subsequent negotiations. This points to the important advantage of integrative negotiations: even when you ‘win’, you want your opponent to feel positively about the negotiation.49 Why, then, don’t we see more integrative bargaining in organizations? The answer lies in the conditions necessary for this type of negotiation to succeed. These include parties who are open with information and candid about their concerns, a sensitivity by both parties to the other’s needs, the ability to trust one another, and a willingness by both parties to maintain flexibility.50 Because these conditions often don’t exist in organizations, it isn’t surprising that negotiations often take on a win-at-any-cost dynamic. There are some ways to achieve more integrative outcomes. For example, individuals who bargain in teams reach more integrative agreements than those who bargain individually. This happens because more ideas are generated when more people are at the bargaining table. So try bargaining in teams.51 Another way to achieve higher joint-gain settlements is to put more issues on the table. The more negotiable issues that are introduced into a negotiation, the more opportunity there is for ‘logrolling’ where issues are traded because of differences in preferences. This creates better outcomes for each side than if each issue were negotiated individually.52 Focus also on the underlying interests of both sides rather than on issues. In other words, it is better to concentrate on why an employee wants a rise rather than to focus just on the rise amount – some unseen potential for integrative outcomes may arise if both

‘Teams negotiate better than individuals in collectivistic cultures’ According to a recent study, this statement appears to be false. In general, the literature has suggested that teams negotiate more effectively than individuals negotiating alone. Some evidence indicates that team negotiations create more ambitious goals, and that teams communicate more with each other than individual negotiators do. Common sense suggests that if this is indeed the case, it is especially true in collectivistic cultures, where individuals are more likely to think of collective goals and be more comfortable working in teams. A recent study of the negotiation of teams in the United States and in Taiwan, however, suggests that this common sense is wrong. The researchers conducted two studies comparing two-person teams with individual negotiators. They defined negotiating effectiveness as the degree to which the negotiation produced an optimal outcome for both sides. US teams did better than solo individuals in both studies. In Taiwan, solo individuals did better than teams.

MYTH OR SCIENCE?

Why did this happen? The researchers determined that in Taiwan norms respecting harmony already exist, and negotiating in teams only amplifies that tendency. This poses a problem because when norms for cooperation are exceptionally high, teams ‘satisfice’ to avoid conflict. In contrast, because the United States is individualistic, solo teams may only amplify their tendencies to focus solely on their own interests, which makes reaching integrative solutions harder. Overall, these findings suggest that negotiating individually works best in collectivistic cultures, and negotiating in teams works best in individualistic cultures. Sources: Based on M. J. Gelfand et al., ‘Toward a culture-by-context perspective on negotiation: negotiating teams in the United States and Taiwan’, Journal of Applied Psychology, 98 (2013), pp. 504–13; and A. Graf, S. T. Koeszegi and E.-M. Pesendorfer, ‘Electronic negotiations in intercultural interfirm relationships’, Journal of Managerial Psychology, 25 (2010), pp. 495–512.

Negotiation   413

sides concentrate on what they really want rather than on specific items they’re bargaining over. Typically, it’s easier to concentrate on underlying interests when parties stay focused on broad, overall goals rather than on immediate outcomes of a specific decision.53 Negotiations when both parties are focused on learning and understanding the other side tend to yield higher joint outcomes than those in which parties are more interested in their individual bottom-line outcomes.54 Finally, you should realize that compromise may be your worst enemy in negotiating a win/ win agreement. This is because compromising reduces the pressure to bargain integratively. After all, if you or your opponent caves in easily, it doesn’t require anyone to be creative to reach a settlement. Thus, people end up settling for less than they could have obtained if they had been forced to consider the other party’s interests, trade off issues and be creative.55 Think of the classic example where two sisters are arguing over who gets an orange. Unknown to each other, one sister wants the orange to drink the juice, whereas the other sister wants the orange peel to bake a cake. If one sister simply capitulates and gives the other sister the orange, then they will not be forced to explore their reasons for wanting the orange, and thus they will never find the win/win solution: They could each have the orange because they want different parts of it!

The negotiation process 5  Apply the five steps of the negotiation process.

Figure 14.5 provides a simplified model of the negotiation process. It views negotiation as made up of five steps: (1) preparation and planning; (2) definition of ground rules; (3) clarification and justification; (4) bargaining and problem solving; and (5) closure and implementation.56

Preparation and planning Before you start negotiating, you need to do your homework. What’s the nature of the conflict? What’s the history leading up to this negotiation? Who’s involved and what are their perceptions of the conflict? What do you want from the negotiation? What are your goals? If you’re a supply manager at the hypermarket chain Carrefour, for instance, and your goal is to get a significant cost reduction from a toy supplier, make sure that this goal stays paramount in your discussions and doesn’t get overshadowed by other issues. It often helps to put your goals in writing and develop a range of outcomes – from ‘most hopeful’ to ‘minimally acceptable’ – to keep your attention focused. You also want to prepare an assessment of what you think the other party’s goals are. What are they likely to ask for? How entrenched are they likely to be in their position? What intangible or hidden interests may be important to them? What might they be Preparation and willing to settle on? When you can anticipate your opponent’s position, you are better planning equipped to counter arguments with the facts and figures that support your position. Relationships change as a result of negotiation, so take that into consideration. If you could ‘win’ a negotiation but push the other side into resentment or animosity, Definition of ground rules it might be wiser to pursue a more compromising style. If preserving the relationship will make you seem easily exploited, you may consider a more aggressive style. As an example of how the tone of a relationship set in negotiations matters, people who feel Clarification and good about the process of a job offer negotiation are more satisfied with their jobs justification and less likely to turn over a year later regardless of their actual outcomes from these negotiations.57 Bargaining and Once you’ve gathered your information, use it to develop a strategy. For example, problem solving expert chess players have a strategy. They know ahead of time how they will respond to any given situation. As part of your strategy, you should determine yours and the other side’s best alternative to a negotiated agreement (BATNA).58 Your BATNA determines Closure and implementation the lowest value acceptable to you for a negotiated agreement. Any offer you receive that is higher than your BATNA is better than an impasse. Conversely, you shouldn’t expect success in your negotiation effort unless you’re able to make the other side an Figure 14.5  The negotiation offer they find more attractive than their BATNA. If you go into your negotiation process

414  14 Conflict and negotiation BATNA The best alternative to a negotiated agreement; the least the individual should accept.

having a good idea of what the other party’s BATNA is, even if you’re not able to meet theirs, you might be able to get them to change it. Think carefully about what the other side is willing to give up. People who underestimate their opponent’s willingness to give on key issues before the negotiation even starts end up with lower outcomes from a negotiation.59

Definition of ground rules Once you’ve done your planning and developed a strategy, you’re ready to begin defining the ground rules and procedures with the other party over the negotiation itself. Who will do the negotiating? Where will it take place? What time constraints, if any, will apply? To what issues will negotiation be limited? Will there be a specific procedure to follow if an impasse is reached? During this phase, the parties will also exchange their initial proposals or demands.

Clarification and justification When initial positions have been exchanged, both you and the other party will explain, amplify, clarify, bolster and justify your original demands. This needn’t be confrontational. Rather, it’s an opportunity for educating and informing each other on the issues, why they are important, and how each arrived at their initial demands. This is the point at which you might want to provide the other party with any documentation that helps support your position.

Bargaining and problem solving The essence of the negotiation process is the actual give-and-take in trying to hash out an agreement. This is where both parties will undoubtedly need to make concessions.

Closure and implementation The final step in the negotiation process is formalizing the agreement that has been worked out and developing any procedures that are necessary for implementation and monitoring. For major negotiations – which would include everything from labour-management negotiations to bargaining over lease terms to buying a piece of real estate to negotiating a job offer for a senior management position – this requires hammering out the specifics in a formal contract. For most cases, however, closure of the negotiation process is nothing more formal than a handshake.

Individual differences in negotiation effectiveness

6  Show how Are some people better negotiators than others? Though the answer to this question might individual differences influence negotiations. seem obvious, as it turns out the answers are more complex than you might think. Here we

EMPLOYABILITY AND NEGOTIATION A generation ago, those in senior management positions were generally expected to make all of the decisions whilst those below them in the hierarchy obeyed. Negotiation was only really important to those at the higher levels. Nowadays, as organizations have become more decentralized, flatter, broader spans of control and less formal, employees at all levels are expected to make decisions, many of which involve negotiation with, for example, customers, suppliers and managers. Becoming a better negotiator is a crucial employability skill. There is no shortage of negotiation skills advice to be found, but here are a few tips to begin with:

●

Read up on negotiation techniques.

●

Plan for different types of negotiations.

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Practice. Just like improving at sports or a musical instrument, negotiators improve by practising different scenarios and strategies.

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Listen actively during negotiations.

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Choose questions carefully.

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Don’t talk too much. This will not only give away more about your position, but it is likely to dilute your argument with unnecessary information.

Negotiation   415

discuss four factors that influence how effectively individuals negotiate: personality, mood/ emotions, culture and gender.

Personality traits in negotiation Can you predict an opponent’s negotiating tactics if you know something about his or her personality? Because personality and negotiation outcomes are related but only weakly, the answer is, at best, ‘sort of’. Most research has focused on the Big Five trait of agreeableness, for obvious reasons – agreeable individuals are cooperative, compliant, kind and conflict-averse. We might think such characteristics make agreeable individuals easy prey in negotiations, especially distributive ones. The evidence suggests, however, that overall agreeableness is weakly related to negotiation outcomes. Why is this the case? It appears that the degree to which agreeableness, and personality more generally, affects negotiation outcomes depends on the situation. The importance of being extroverted in negotiations, for example, will very much depend on how the other party reacts to someone who is assertive and enthusiastic. One complicating factor for agreeableness is that it has two facets: the tendency to be cooperative and compliant is one, but so is the tendency to be warm and empathetic.60 It may be that while the former is a hindrance to negotiating favourable outcomes, the latter helps. Empathy, after all, is the ability to take the perspective of another person and to gain insight/ understanding of them. We know so-called perspective-taking benefits integrative negotiations, so perhaps the null effect for agreeableness is due to the two tendencies pulling against one another. If this is the case, then the best negotiator is a competitive but empathetic one, and the worst is a gentle but empathetic one. A recent study suggested that the type of negotiations matter as well. In this study, agreeable individuals reacted more positively and felt less stress (measured by their cortisol levels) in integrative negotiations than in distributive ones. Low levels of stress, in turn, made for more effective negotiation outcomes.61 Similarly, in ‘hard-edged’ distributive negotiations, where giving away information leads to a disadvantage, extroverted negotiators do less well because they tend to share more information than they should.62 Research suggests intelligence predicts negotiation effectiveness, but, as with personality, the effects aren’t especially strong.63 In a sense, these weak links mean you’re not severely disadvantaged, even if you’re an agreeable extrovert, when it’s time to negotiate. We all can learn to be better negotiators.64

Moods/emotions in negotiation Do moods and emotions influence negotiation? They do, but the way they work depends on the emotion as well as the context. A negotiator who shows anger generally induces concessions, for instance, because the other negotiator believes no further concessions from the angry party are possible. One factor that governs this outcome, however, is power – you should show anger in negotiations only if you have at least as much power as your counterpart. If you have less, showing anger actually seems to provoke ‘hardball’ reactions from the other side.65 Another factor is how genuine your anger is – ‘faked’ anger, or anger produced from so-called surface acting (see Chapter 8), is not effective, but showing anger that is genuine (so-called deep acting) does.66 It also appears that having a history of showing anger, rather than sowing the seeds of revenge, actually induces more concessions because the other party perceives the negotiator as ‘tough’.67 Finally, culture seems to matter. For instance, one study found that when East Asian participants showed anger, it induced more concessions than if the negotiator expressing anger was from Europe, perhaps because of the stereotype of East Asians as refusing to show anger.68 Another relevant emotion is disappointment. Generally, a negotiator who perceives disappointment from his or her counterpart concedes more because disappointment makes many negotiators feel guilty. In one study, Dutch students were given 100 chips to bargain over. Negotiators who expressed disappointment were offered 14 more chips than those who didn’t. In a second study, showing disappointment yielded an average concession of 12 chips. Unlike a show of anger, the relative power of the negotiators made no difference in either study.69

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Anxiety also appears to have an impact on negotiation. For example, one study found that individuals who experienced more anxiety about a negotiation used more deceptions in dealing with others.70 Another study found that anxious negotiators expect lower outcomes, respond to offers more quickly, and exit the bargaining process more quickly, leading them to obtain worse outcomes.71 As you can see, emotions – especially negative ones – matter to negotiation. Even emotional unpredictability affects outcomes; researchers have found that negotiators who express positive and negative emotions in an unpredictable way extract more concessions because it makes the other party feel less in control.72 As one negotiator put it, ‘Out of the blue, you may have to react to something you have been working on in one way, and then something entirely new is introduced, and you have to veer off and refocus.’73

Culture in negotiations Do people from different cultures negotiate differently? The simple answer is the obvious one: yes, they do. However, there are many nuances in the way this works. First, it appears that people generally negotiate more effectively within cultures than between them. For example, a Belgian is apt to do better negotiating with a Belgian than with a Sri Lankan. Second, it appears that in cross-cultural negotiations, it is especially important that the negotiators be high in openness. This suggests choosing cross-cultural negotiators who are high on openness to experience, but also avoiding factors – such as time pressures – that tend to inhibit learning to understand the other party.74 Finally, because emotions are culturally sensitive, negotiators need to be especially aware of the emotional dynamics in cross-cultural negotiation. One study, for example, explicitly compared how US and Chinese negotiators react to an angry counterpart. Chinese negotiators increased their use of distributive negotiating tactics, whereas US negotiators decreased their use of these tactics. That is, Chinese negotiators began to drive a harder bargain once they saw that their negotiation partner was becoming angry, whereas US negotiators actually capitulated somewhat in the face of angry demands. Why the difference? It may be that individuals from East Asian cultures feel that using anger to get their way in a negotiation is not a legitimate tactic, so they respond by refusing to cooperate when their opponents become upset.75

Gender differences in negotiations There are many areas of organizational behaviour in which men and women are not that different. Negotiation is not one of them. It now seems fairly clear that men and women negotiate differently, and these differences affect outcomes. A popular stereotype is that women are more cooperative and pleasant in negotiations than are men. Though this is controversial, there is some merit to it. Men tend to place a higher value on status, power and recognition, whereas women tend to place a higher value on compassion and altruism. Moreover, women do tend to value relationship outcomes more than men, and men tend to value economic outcomes more than women.76 These differences affect both negotiation behaviour and negotiation outcomes. Compared to men, women tend to behave in a less assertive, less self-interested, and more accommodating manner. As one recent review concluded, women ‘are more reluctant to initiate negotiations, and when they do initiate negotiations, they ask for less, are more willing to accept [the] offer, and make more generous offers to their negotiation partners than men do.’77 A study of MBA students at Carnegie-Mellon University found that male MBA students took the step of negotiating their first offer 57 per cent of the time, compared to 4 per cent for female MBA students. The net result? A €2,500 difference in starting salaries.78 However, the disparity goes even further than that. Because of the way women approach negotiation, other negotiators seek to exploit female negotiators by, for example, making lower salary offers. As a result, ‘female negotiators obtain poorer individual outcomes than male negotiators do, and two women negotiating together build less total value than do two male negotiators.’79

Negotiation   417

This is not a ‘fix the woman’ issue for two reasons. First, as is the case with any stereotype that has some validity, we always find individual variation. There are average differences between men and women in negotiation, but this hardly means that every man’s behaviour is more assertive than every woman’s in negotiation. Second, there is some evidence that men hold a gender double standard – when women behave stereotypically, men are more likely to take advantage of the cooperative behaviour, but when women behave assertively, their assertive behaviour is viewed more negatively than if the same behaviour were demonstrated by men. So what can be done to change this troublesome state of affairs? First, organizational culture plays a role here. If an organization, even unwittingly, encourages a predominantly competitive model for negotiators, this will tend to increase gender-stereotypic behaviours (men negotiating competitively, women negotiating cooperatively), and it will also increase backlash when women go against stereotype. Men and women need to know that it is acceptable for each to show a full range of negotiating behaviours. Thus, a female negotiator who behaves competitively and a male negotiator who behaves cooperatively need to know that they are not violating expectations. Second, at an individual level, women cannot directly control male stereotypes of women. Fortunately, such stereotypes are fading. However, women can control their own negotiating behaviour. Does this mean they should always behave aggressively and in a self-interested manner in negotiations? If economic outcomes are valued, then the answer, in general, is yes. And, of course, the shoe can be put on the other foot – if men value social outcomes, they should consider behaving in a more cooperative manner. Sometimes the change can be fairly simple. Take the example of freelance writer Alina Tugend. She decided that, when given an offer for her work, she would simply say, ‘I expected more.’ Although Tugend initially found this strategy difficult, it became easier when she found that it earned her a few hundred extra euros per story. Also, do your homework. When web designer Kate Gilbert wondered whether her €25/hour fee was too low, she started asking around. She found she was asking too little – way too little. She now starts her rate at €70/hour.80 Research is less clear as to whether women can improve their outcomes even further by showing some gender-stereotypic behaviours. An article by Laura Kray and colleagues suggested that female negotiators who were instructed to behave with ‘feminine charm’ (be animated in body movements, make frequent eye contact with their partner, smile, laugh, be playful and frequently compliment their partner) did better in negotiations than women not so instructed. These behaviours didn’t work for men regardless of the gender of their negotiating partner.81 Other researchers disagree and argue that what can best benefit women is to break down gender stereotypes on the part of individuals who hold them.82 It’s possible this is a short-term/long-term situation. In the short term, women can gain an advantage in negotiation by being both assertive and charming, but in the long term, their interests are best served by eliminating these sorts of sex role stereotypes. Evidence suggests women’s own attitudes and behaviours hurt them in negotiations. Managerial women demonstrate less confidence than men in anticipation of negotiating and are less satisfied with their performance afterwards, even when their performance and the outcomes they achieve are similar to those for men.83 Women are also less likely than men to see an ambiguous situation as an opportunity for negotiation. Women may unduly penalize themselves by failing to engage in negotiations that would be in their best interests. Some research suggests that women are less aggressive in negotiations because they are worried about backlash from others. There is an interesting qualifier to this result: women are more likely to engage in assertive negotiation when they are bargaining on behalf of someone else than when they are bargaining on their own behalf.84

7  Assess the roles and functions of thirdparty negotiations.

Third-party negotiations To this point, we’ve discussed bargaining in terms of direct negotiations. Occasionally, however, individuals or group representatives reach a stalemate and are unable to resolve

Amer Ghazzal/Alamy Images

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London underground (the public train system) employees have had at least seven separate strikes over the past five years over issues such as pay, safety, pensions and job security, leading to travel disruption in London. A recent disagreement was about the introduction of all-night train services. Rail union leaders met London Underground managers under the chairmanship of the Advisory, Conciliation and Arbitration Service (Acas) to come to an agreement.

mediator A neutral third party who facilitates a negotiated solution by using reasoning, persuasion and suggestions for alternatives. arbitrator A third party to a negotiation who has the authority to dictate an agreement. conciliator A trusted third party who provides an informal communication link between the negotiator and the opponent. consultant An impartial third party, skilled in conflict management, who attempts to facilitate creative problem solving through communication and analysis.

their differences through direct negotiations. In such cases, they may turn to a third party to help them find a solution. There are four basic third-party roles: mediator, arbitrator, conciliator and consultant.85 A mediator is a neutral third party who facilitates a negotiated solution by using reasoning and persuasion, suggesting alternatives, and the like. Mediators are widely used in labour-­ management negotiations and in civil court disputes. The overall effectiveness of mediated negotiations is fairly impressive. The settlement rate is approximately 60 per cent, with negotiator satisfaction at about 75 per cent. But the situation is the key to whether or not mediation will succeed; the conflicting parties must be motivated to bargain and resolve their conflict. In addition, conflict intensity can’t be too high; mediation is most effective under moderate levels of conflict. Finally, perceptions of the mediator are important; to be effective, the mediator must be perceived as neutral and non-coercive. An arbitrator is a third party with the authority to dictate an agreement. Arbitration can be voluntary (requested by the parties) or compulsory (forced on the parties by law or contract). The big plus of arbitration over mediation is that it always results in a settlement. Whether or not there is a negative side depends on how ‘heavy-handed’ the arbitrator appears. If one party is left feeling overwhelmingly defeated, that party is certain to be dissatisfied and unlikely to graciously accept the arbitrator’s decision. Therefore, the conflict may resurface at a later time. A conciliator is a trusted third party who provides an informal communication link between the negotiator and the opponent. Conciliation does not have the authority to dictate an agreement as arbitration does. Comparing its effectiveness to mediation has proven difficult because the two overlap a great deal. In practice, conciliators typically act as more than mere communication conduits. They also engage in fact-finding, interpreting messages and persuading disputants to develop agreements. A consultant is a skilled and impartial third party who attempts to facilitate problem solving through communication and analysis, aided by a knowledge of conflict management. In contrast to the previous roles, the consultant’s role is not to settle the issues,

SUMMARY   419

but, rather, to improve relations between the conflicting parties so that they can reach a settlement themselves. Instead of putting forward specific solutions, the consultant tries to help the parties learn to understand and work with each other. Therefore, this approach has a longer-term focus: to build new and positive perceptions and attitudes between the conflicting parties.

SUMMARY Many people automatically assume that conflict is related to lower group and organizational performance. This chapter has demonstrated that this assumption is frequently incorrect. Conflict can be either constructive or destructive to the functioning of a group or unit. As shown in Figure 14.6, levels of conflict can be either too high or too low. Either extreme hinders performance. An optimal level is one at which there is enough conflict to prevent stagnation, stimulate creativity, allow tensions to be released and initiate the seeds for change, yet not so much as to be disruptive or to deter coordination of activities.

Unit performance

(High)

A

B

(Low)

C

Level of conflict

Situation

Level of conflict

(High)

Type of conflict

Unit’s internal characteristics

Unit performance outcome

Apathetic Stagnant Nonresponsive to change Lack of new ideas

Low

Viable Self-critical Innovative

High

Disruptive Chaotic Uncooperative

Low

A

Low or none

Dysfunctional

B

Optimal

Functional

C

High

Dysfunctional

Figure 14.6  Conflict and unit performance

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IMPLICATIONS FOR MANAGERS ●

●

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Choose an authoritarian management style in emergencies, when unpopular actions need to be implemented (such as cost cutting, enforcement of unpopular rules, discipline), and when the issue is vital to the organization’s welfare. Be certain to communicate your logic when possible to make certain employees remain engaged and productive. Seek integrative solutions when your objective is to learn, when you want to merge insights from people with different perspectives, when you need to gain commitment by incorporating concerns into a consensus, and when you need to work through feelings that have interfered with a relationship. It is best to avoid an issue when it is trivial or symptomatic of other issues, when more important issues are pressing, when you perceive no chance of satisfying everyone’s concerns, when people need to cool down and regain perspective, when gathering information, and when others can resolve the conflict more effectively. You can build trust by accommodating others when you find you’re wrong, when you need to demonstrate reasonableness, when other positions need to be heard, when issues are more important to others than to yourself, when you want to satisfy others and maintain cooperation, when you can build social credits for later issues, to minimize loss when you are outmatched and losing, and when employees should learn from their own mistakes. Consider compromising when goals are important but not worth potential disruption, when opponents with equal power are committed to mutually exclusive goals, and when you need temporary settlements to complex issues. Distributive bargaining can resolve disputes, but it often reduces the satisfaction of one or more negotiators because it is confrontational and focused on the short term. Integrative bargaining, in contrast, tends to provide outcomes that satisfy all parties and build lasting relationships. Make sure you set aggressive negotiating goals and try to find creative ways to achieve the objectives of both parties, especially when you value the long-term relationship with the other party. That doesn’t mean sacrificing your self-interest; rather, it means trying to find creative solutions that give both parties what they really want.

Conflict benefits organizations

POINT/COUNTERPOINT

POINT Such intragroup cohesion is a critical resource that groups draw on in good and especially in bad times.

Let’s briefly review how stimulating conflict can provide benefits to the organization: ●

●

Conflict is a means to solve problems and bring about radical change. It’s an effective device by which management can drastically change the existing power structure, current interaction patterns and entrenched attitudes. If there is no conflict, it means the real problems aren’t being addressed. Conflict facilitates group cohesiveness. Whereas conflict increases hostility between groups, external threats tend to cause a group to pull together as a unit. Conflict with another group brings together those within each group.

●

Conflict improves group and organizational effectiveness. Groups or organizations devoid of conflict are likely to suffer from apathy, stagnation, groupthink and other debilitating diseases. In fact, more organizations probably fail because they have too little conflict, not because they have too much. Stagnation is the biggest threat to organizations, but since it occurs slowly, its ill effects often go unnoticed until it’s too late. Conflict can break complacency – though most of us don’t like conflict, it often is the last best hope of saving an organization.

EXPERIENTIAL EXERCISE   421

COUNTERPOINT In general, conflicts are dysfunctional, and it is one of management’s major responsibilities to keep conflict intensity as low as humanly possible. A few points support this case: ●

The negative consequences from conflict can be devastating. The list of negatives associated with conflict is awesome. The most obvious negatives are increased turnover, decreased employee satisfaction, inefficiencies between work units, sabotage and labour grievances and strikes. One survey found that in the UK 370 million working days are lost to conflict in some way (i.e. being involved in a disagreement, managing a conflict between co-workers, etc). In Germany and Ireland that figure is an even higher proportion of available working time.86

●

●

Effective managers build teamwork. A good manager builds a coordinated team. Conflict works against such an objective. When a team works well, the whole becomes greater than the sum of the parts. Management creates teamwork by minimizing internal conflicts and facilitating internal coordination. Conflict is avoidable. It may be true that conflict is inevitable when an organization is in a downward spiral, but the goal of good leadership and effective management is to avoid the spiral to begin with.

QUESTIONS FOR REVIEW 1. What are the differences between the traditional and

interactionist views of conflict? 2. What are the three types of conflict and the two loci of

conflict?

5. What are the five steps in the negotiation process? 6. How do individual differences influence negotiations? 7. What are the roles and functions of third-party

­negotiations?

3. What are the steps of the conflict process? 4. What are the differences between distributive and inte-

grative bargaining?

EXPERIENTIAL EXERCISE A NEGOTIATION ROLE PLAY This role-play is designed to help you develop your negotiating skills. The class is to break into pairs. One person will play the role of Jacob, the department supervisor. The other person will play Michael, Jacob’s boss. Both participants should read ‘The situation’, ‘The negotiation’ and then their role only.

The situation Jacob and Michael work for Jako, a German sportswear manufacturer in northeast Baden-Württemberg. Jacob supervises a research laboratory and Michael is the manager of research and development. Jacob and Michael have worked for Jako for more than six years. Michael has been Jacob’s boss for two years. One of Jacob’s employees has greatly impressed him. This employee is Ana. Ana was hired 11 months ago. She is

24 years old and holds a master’s degree in mechanical engineering. Her entry-level salary was €37,500 per year. Jacob told her that, in accordance with the firm’s policy, she would receive an initial performance evaluation at six months and a comprehensive review after one year. Based on her performance record, Ana was told she could expect a salary adjustment at the time of the one-year evaluation. Jacob’s evaluation of Ana after six months was very positive. Jacob commented on the long hours Ana was putting in, her cooperative spirit, the fact that others in the lab enjoyed working with her and that she was making an immediate positive impact on the project she had been assigned. Now that Ana’s first anniversary is coming up, Jacob has again reviewed her performance. Jacob thinks Ana may be the best new person the R&D group has ever

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hired. After only a year, Jacob has ranked Ana as the number-three performer in a department of 11. Salaries in the department vary greatly. Jacob, for instance, has a base salary of €60,000, plus eligibility for a bonus that might add another €5,000 to €10,000 a year. The salary range of the 11 department members is €30,000 to €52,000. The individual with the lowest salary is a recent hire with a bachelor’s degree in physics. The two people whom Jacob has rated above Lisa earn base salaries of €46,000 and €51,500. They’re both 27 years old and have been at Jako for three and four years, respectively. The median salary in Jacob’s department is €42,500.

Jacob’s role You want to give Ana a big rise. Although she’s young, she has proven to be an excellent addition to the department. You don’t want to lose her. More importantly, she knows in general what other people in the department are earning and she thinks she’s underpaid. The company typically gives one-year rises of 5 per cent, although 10 per cent is not unusual, and 20 to 30 per cent increases have been approved on occasion. You’d like to get Ana as large an increase as Michael will approve.

Michael’s role All your supervisors typically try to squeeze you for as much money as they can for their people. You understand this because you did the same thing when you were a supervisor, but your boss wants to keep a lid on costs. He wants you to keep pay rises for recent hires generally in the 5 to 8 per cent range. In fact, he’s sent a memo to all managers and supervisors saying this. He also said that managers will be evaluated on their ability to maintain budgetary control. However, your boss is also concerned with equity and paying people what they’re worth. You feel assured that he will support any salary recommendation you make, as long as it can be justified. Your goal, consistent with cost reduction, is to keep salary increases as low as possible.

The negotiation Jacob has a meeting scheduled with Michael to discuss Ana’s performance review and salary adjustment. Take a couple of minutes to think through the facts in this exercise and to prepare a strategy. Then you have up to 15 minutes to conduct your negotiation. When your negotiation is complete, the class will compare the various strategies used and pair outcomes.

ETHICAL DILEMMA IS IT UNETHICAL TO LIE, DECEIVE OR COLLUDE DURING NEGOTIATIONS? In Chapter 11, we addressed lying in the context of communication. Here we return to the topic of lying but specifically as it relates to negotiation. We think this issue is important because, for many people, there is no such thing as lying when it comes to negotiating. It’s been said that the whole notion of negotiation is built on ethical quicksand: to succeed, you must deceive. Is this true? Apparently, a lot of people think so. For instance, one study found that 28 per cent of negotiators lied about at least one issue during negotiations, while another study found that 100 per cent of negotiators either failed to reveal a problem or actively lied about it during negotiations if they were not directly asked about the issue. Why do you think these numbers are so high? The research on negotiation provides numerous examples of lying giving the negotiator a strategic advantage.87 We can probably agree that brazen lies during negotiation are wrong. At least most ethicists would probably agree. The universal dilemma surrounds the little lies: the omissions, evasions and concealments that are often necessary to best an opponent. During negotiations, when is a lie a lie? Is exaggerating benefits, downplaying negatives, ignoring flaws or saying ‘I don’t know’ – when in reality you do – considered lying?

Is declaring ‘this is my final offer and non-negotiable’ (even when you’re posturing) a lie? Is pretending to accommodate the others’ interests to make meaningful concessions lying? Rather than being considered unethical, the use of these ‘lies’ is considered by many as an indicator that a negotiator is strong, smart and savvy. Or consider the issue of colluding, as when two bidders agree not to bid against one another in a (concealed) effort to keep the bids down. In some cases, such collusion is illegal, but even when it isn’t illegal, is it ethical?

Questions 1. When are deception, evasiveness or collusion out of

bounds? 2. Can such tactics be legal and still be unethical? 3. Is it naive to be completely honest and bare your soul

during negotiations? 4. Are the rules of negotiations unique? Is any tactic that

will improve your chance of winning acceptable? Source: Based on R. Cohen, ‘Bad bidness’, New York Times Magazine, 2 September 2006, p. 22; M. E. Schweitzer, ‘Deception in negotiations’, in S. J. Hoch and H. C. Kunreuther (eds), Wharton on Making Decisions (New York: Wiley, 2001), pp. 187–200; and M. Diener, ‘Fair enough’, Entrepreneur, January 2002, pp. 100–102.

case incident 2   423

Easily offended? The following is an extract of an interview from a local government employee talking about a situation when a new temporary member of staff started work in the interviewee’s office. At the time, another team member, called Anna, was on annual leave. I think one particular day I just sort of said to her, ‘I prefer it if you didn’t sit at that desk because that’s Anna’s desk and she’s a bit funny about people using her desk.’ I said, ‘if you could sit at your own desk’. Anyhow she must have really taken offence to it. The next time I had my supervision [appraisal by line manager], fine, brilliant, no problem but then my line manager’s manager came in at the end and said that somebody had expressed the opinion that they thought I was bullying. She filled me in on what it was about and I said, ‘I asked her not to sit at that desk because I know that that person is quite protective of her own environment.’ I said I wasn’t really nasty about it at all but she said, ‘Well we’ve had it reported and we’ve got to mention it to you.’ The complainant was then prepared to accept an apology and so an apology was made. The interviewee goes on to describe the impact of the situation following this. After that, because of what had been said previously, I was really, really paranoid about saying anything that

The complexities of negotiation Back in 2007, Airbus, the European aircraft manufacturer, desperately required restructuring to remain viable. The firm developed a plan, the Power 8, with the aim of achieving this. However, to get the plan agreed required careful negotiations with many stakeholders. For such a large firm with around 60,000 employees at the time primarily based in Germany, France, UK and Spain, there was inevitably strong political and industrial interest in the outcomes. Governments wanted to keep sites in their countries and trade unions warned that job losses and factory closures could spark Europe-wide strikes. Workers at one Airbus plant outside Paris spontaneously downed tools and walked out at the threat that their facility could close. Airbus was hoping to save €2 billion a year through a series of cuts after delays to its A380 superjumbo cost the company billions in lost earnings. The Power 8 restructuring plan called for about 3,500 jobs to go in Germany, 4,000 in France, 1,500 in the UK and 400 in Spain. Power 8 also involved the closure, sale, or partial sale, of Airbus factories, which would allow the company to outsource risk and costs

CASE INCIDENT 1 might offend. When I had the next supervision [appraisal], it was mentioned that I was very quiet and I wasn’t talking to anybody, I wasn’t being part of the team and I said, ‘I really do feel uncomfortable.’ I was disappointed that my line manager felt that she’d had to bring her line manager in to tell me something like that when really, if she had raised the matter with me I’d have just apologised for what I said. This situation continued with a bad atmosphere in the office for the next two or three months.

Questions 1. What caused the conflict in this case? 2. Describe whether it was a perceived or felt conflict? 3. What conflict management technique was used to resolve the conflict?

4. Was the outcome of the conflict functional or dysfunctional? 5. What other conflict management techniques might have led to better outcomes?

Source: Based on Managing Conflict at Work: A Guide for Line Managers, CIPD 2008.

CASE INCIDENT 2 to suppliers. A number of factories in France were candidates for outsourcing as well as Filton in the UK. The scale of job cuts and factory closures sparked a political battle when German shareholders refused to back initial Power 8 proposals because they did not give the country sufficient work on Airbus’s new aircraft, the A350. This was widely seen as a ploy to win more concessions from the French half of Airbus. A deal was then hammered out that gave Germany more A320 work while France would dominate the A350. Sources close to the German side of Airbus said this reallocation of work could lead to the eventual divorce of the German and French parts of the company. Meanwhile, EADS, Airbus’s parent company, was seeking new sources of finance. It needed to find about €10 billion to launch the A350 and with a weak balance sheet it was looking to outside investors. Sheikh Hamad bin Jassem bin Jabr al-Thani, Qatar’s Foreign Minister, visited France to talk about the Qataris buying up to 10 per cent of EADS’s stock. In return for access to Qatari finance, Airbus may be expected to locate some of its production facilities in the Arab country.

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Questions 1. Identify the stakeholders in the restructuring plan that you would need to include in the negotiations.

2. What bargaining strategies would be most appropriate? Why? Would you need to alter the strategy depending on the stakeholder?

3. Would third-parties be useful in the negotiation process? How?

4. Would you alter the negotiation process when dealing with stakeholders from different countries? How? Source: Based on ‘Strike threats loom ahead of Airbus restructuring plan’, The Times, 28 February 2007, p. 54.

ENDNOTES  1 See, for instance, D. Tjosvold, ‘Defining conflict and making choices about its management: lighting the dark side of organizational Life’, International Journal of Conflict Management, 17, 2 (2006), pp. 87–95; and M. A. Korsgaard, S. S. Jeong, D. M. Mahony and A. H. Pitariu, ‘A multilevel view of intragroup conflict’, Journal of Management, 34, 6 (2008), pp. 1222–52.

12 R. S. Peterson and K. J. Behfar, ‘The dynamic relationship between performance feedback, trust, and conflict in groups: a longitudinal study’, Organizational Behavior & Human Decision Processes, September–November 2003, pp. 102–12.

  2 K. W. Thomas, ‘Conflict and negotiation processes in organiz­ ations’, in M. D. Dunnette and L. M. Hough (eds), Handbook of Industrial and Organizational Psychology, 2nd edn, vol. 3 (Palo Alto, CA: Consulting Psychologists Press, 1992), pp. 651–717.

14 T. M. Glomb and H. Liao, ‘Interpersonal aggression in work groups: social influence, reciprocal, and individual effects’, Academy of Management Journal, 46, 4 (2003), pp. 486–96; and V. Venkataramani and R. S. Dalal, ‘Who helps and harms whom? Relational aspects of interpersonal helping and harming in organizations’, Journal of Applied Psychology, 92, 4 (2007), pp. 952–66.

  3 For a comprehensive review of the interactionist approach, see C. K. W. De Dreu and E. Van de Vliert (eds), Using Conflict in Organizations (London: Sage, 1997).   4 J. Yang and K. W. Mossholder, ‘Decoupling task and relationship conflict: the role of intragroup emotional processing’, Journal of Organizational Behavior, 25, 5, August 2004, pp. 589–605; and N. Gamero, V. González-Romá and J. M. Peiró, ‘The influence of intra-team conflict on work teams’ affective climate: a longitudinal study’, Journal of Occupational and Organizational Psychology, 81, 1 (2008), pp. 47–69.   5 N. Halevy, E. Y. Chou and A. D. Galinsky, ‘Exhausting or exhilarating? Conflict as threat to interests, relationships and identities’, Journal of Experimental Social Psychology, 48 (2012), pp. 530–7.   6 F. R. C. de Wit, L. L. Greer and K. A. Jehn, ‘The paradox of intragroup conflict: a meta-analysis’, Journal of Applied Psychology, 97 (2012), pp. 360–90.   7 J. Farh, C. Lee and C. I. C. Farh, ‘Task conflict and team creativity: a question of how much and when’, Journal of Applied Psychology, 95, 6 (2010), pp. 1173–80.   8 B. H. Bradley, A. C. Klotz, B. F. Postlethwaite and K. G. Brown, ‘Ready to rumble: how team personality composition and task conflict interact to improve performance’, Journal of Applied Psychology, 98 (2013), pp. 385–92.   9 B. H. Bradley, B. F. Postlethwaite, A. C. Klotz, M. R. Hamdani and K. G. Brown, ‘Reaping the benefits of task conflict in teams: the critical role of team psychological safety climate’, Journal of Applied Psychology, 97 (2012), pp. 151–8. 10 G. A. Van Kleef, W. Steinel and A. C. Homan, ‘On being peripheral and paying attention: prototypicality and information processing in intergroup conflict’, Journal of Applied Psychology, 98 (2013), pp. 63–79. 11 S. Benard, ‘Cohesion from conflict: does intergroup conflict motivate intragroup norm enforcement and support for centralized leadership?’, Social Psychology Quarterly, 75 (2012), pp. 107–30.

13 ‘Personality clash drives newsman from BBC’, The Times, 27 September 2005, p. 8.

15 Fight, Flight or Face it? Celebrating the Effective Management of Conflict at Work, CIPD/OPP 2008. 16 R. Friedman, C. Anderson, J. Brett, M. Olekalns, N. Goates and C. C. Lisco, ‘The positive and negative effects of anger on dispute resolution: evidence from electronically mediated disputes’, Journal of Applied Psychology, April 2004, pp. 369–76. 17 L. R. Pondy, ‘Organizational conflict: concepts and models’, Administrative Science Quarterly, September 1967, p. 302. 18 See, for instance, J. R. Curhan, ‘What do people value when they negotiate? Mapping the domain of subjective value in negotiation’, Journal of Personality and Social Psychology, September 2006, pp. 117–26; R. L. Pinkley, ‘Dimensions of conflict frame: disputant interpretations of conflict’, Journal of Applied Psychology, April 1990, pp. 117–26; and R. L. Pinkley and G. B. Northcraft, ‘Conflict frames of reference: implications for dispute processes and outcomes’, Academy of Management Journal, February 1994, pp. 193–205. 19 A. M. Isen, A. A. Labroo and P. Durlach, ‘An influence of product and brand name on positive affect: implicit and explicit measures’, Motivation & Emotion, March 2004, pp. 43–63. 20 Ibid. 21 P. J. D. Carnevale and A. M. Isen, ‘The influence of positive affect and visual access on the discovery of integrative solutions in bilateral negotiations’, Organizational Behavior and Human Decision Processes, February 1986, pp. 1–13; and C. Montes, D. Rodriguez and G. Serrano, ‘Affective choice of conflict management styles’, International Journal of Conflict Management, 23 (2012), pp. 6–18. 22 Thomas, ‘Conflict and negotiation processes in organizations’. 23 Ibid. 24 See R. A. Baron, ‘Personality and organizational conflict: effects of the Type A behavior pattern and self-monitoring’,

ENDNOTES   425 ­ rganizational Behavior and Human Decision Processes, O October 1989, pp.  281–96; R. J. Volkema and T. J. Bergmann, ‘Conflict styles as indicators of behavioral patterns in interpersonal conflicts’, Journal of Social Psychology, February 1995, pp. 5–15; and J. A. Rhoades, J. Arnold and C. Jay, ‘The role of affective traits and affective states in disputants’ motivation and behavior during episodes of organizational conflict’, Journal of Organizational Behavior, May 2001, pp. 329–45. 25 Thomas, ‘Conflict and negotiation processes in organizations’. 26 Fight, Flight or Face it? Celebrating the Effective Management of Conflict at Work, CIPD/OPP 2008. 27 See, for instance, K. A. Jehn, ‘Enhancing effectiveness: an investigation of advantages and disadvantages of value-based intragroup conflict’, International Journal of Conflict Management, July 1994, pp. 223–38; R. L. Priem, D. A. Harrison and N. K. Muir, ‘Structured conflict and consensus outcomes in group decision making’, Journal of Management, 21, 4 (1995), pp. 691–710; and K. A. Jehn and E. A. Mannix, ‘The dynamic nature of conflict: a longitudinal study of intragroup conflict and group performance’, Academy of Management Journal, April 2001, pp. 238–51. 28 S. London, ‘The art of constructive conflict: being open about differences of opinion is not only useful but also necessary for the health of any management team writes Simon London’, Financial Times, 17 May 2004, p. 9. 29 J. Hall and M. S. Williams, ‘A comparison of decision-making performances in established and ad-hoc groups’, Journal of Personality and Social Psychology, February 1966, p. 217. 30 R. L. Hoffman, ‘Homogeneity of member personality and its effect on group problem-solving’, Journal of Abnormal and Social Psychology, January 1959, pp. 27–32; R. L. Hoffman and N. R. F. Maier, ‘Quality and acceptance of problem solutions by members of homogeneous and heterogeneous groups’, Journal of Abnormal and Social Psychology, March 1961, pp. 401–7; and P. Pitcher and A. D. Smith, ‘Top management team heterogeneity: personality, power, and proxies’, Organization Science, January– February 2001, pp. 1–18. 31 See T. H. Cox, S. A. Lobel and P. L. McLeod, ‘Effects of ethnic group cultural differences on cooperative behavior on a group task’, Academy of Management Journal, December 1991, pp. 827–47; L. H. Pelled, K. M. Eisenhardt and K. R. Xin, ‘Exploring the black box: an analysis of work group diversity, conflict, and performance’, Administrative Science Quarterly, March 1999, pp. 1–28; and D. van Knippenberg, C. K. W. De Dreu and A. C. Homan, ‘Work group diversity and group performance: an integrative model and research agenda’, Journal of Applied Psychology, December 2004, pp. 1008–22. 32 For example, see J. A. Wall Jr and R. R. Callister, ‘Conflict and its management’, pp. 523–26 for evidence supporting the argument that conflict is almost uniformly dysfunctional; see also P. J. Hinds and D. E. Bailey, ‘Out of sight, out of sync: understanding conflict in distributed teams’, Organization Science, November– December 2003, pp. 615–32. 33 K. A. Jehn, L. Greer, S. Levine and G. Szulanski, ‘The effects of conflict types, dimensions, and emergent states on group outcomes’, Group Decision and Negotiation, 17, 6 (2005), pp. 777–96. 34 M. E. Zellmer-Bruhn, M. M. Maloney, A. D. Bhappu and R. Salvador, ‘When and how do differences matter? An exploration of perceived similarity in teams’, Organizational Behavior and Human Decision Processes, 107, 1 (2008), pp. 41–59. 35 K. B. Dahlin, L. R. Weingart and P. J. Hinds, ‘Team diversity and information use’, Academy of Management Journal, 48, 6 (2005), pp. 1107–23; and M. J. Pearsall, A. P. J. Ellis and J. M.

Evans, ‘Unlocking the effects of gender faultlines on team creativity: is activation the key?’, Journal of Applied Psychology, 93, 1 (2008), pp. 225–34. 36 J. Fried, ‘I know you are, but what am I?’, Inc., July/August 2010, pp. 39–40. 37 K. J. Behfar, R. S. Peterson, E. A. Mannix and W. M. K. Trochim, ‘The critical role of conflict resolution in teams: a close look at the links between conflict type, conflict management strategies, and team outcomes, Journal of Applied Psychology, 93, 1 (2008), pp. 170–88; A. G. Tekleab, N. R. Quigley and P. E. Tesluk, ‘A longitudinal study of team conflict, conflict management, cohesion, and team effectiveness’, Group and Organ­ ization Management, 34, 2 (2009), pp. 170–205; and E. Van de Vliert, M. C. Euwema and S. E. Huismans, ‘Managing conflict with a subordinate or a superior: effectiveness of conglomerated behavior’, Journal of Applied Psychology, 80 (1995), pp. 271–81. 38 A. Somech, H. S. Desivilya and H. Lidogoster, ‘Team conflict management and team effectiveness: the effects of task interdependence and team identification’, Journal of Organizational Behavior, 30, 3 (2009), pp. 359–78. 39 H. R. Markus and S. Kitayama, ‘Culture and the self: implications for cognition, emotion, and motivation’, Psychological Review, 98, 2 (1991), pp. 224–53; and H. Ren and B. Gray, ‘Repairing relationship conflict: how violation types and culture influence the effectiveness of restoration rituals’, Academy of Management Review, 34, 1 (2009), pp. 105–26. 40 M. J. Gelfand, M. Higgins, L. H. Nishii, J. L. Raver, A. Dominguez, F. Murakami, S. Yamaguchi and M. Toyama, ‘Culture and egocentric perceptions of fairness in conflict and negotiation’, Journal of Applied Psychology, October 2002, pp. 833–45; and Z. Ma, ‘Chinese conflict management styles and negotiation behaviours: an empirical test’, International Journal of Cross Cultural Management, April 2007, pp. 101–19. 41 P. P. Fu, X. H. Yan, Y. Li, E. Wang and S. Peng, ‘Examining conflict-handling approaches by Chinese top management teams in IT firms’, International Journal of Conflict Management, 19, 3 (2008), pp. 188–209. 42 CPP, Workplace conflict and how businesses can harness it to thrive, CPP Global Human Capital Report, July 2008. 43 M. H. Bazerman, J. R. Curhan, D. A. Moore and K. L. Valley, ‘Negotiation’, Annual Review of Psychology, 51 (2000), pp. 279–314. 44 See, for example, D. R. Ames, ‘Assertiveness expectancies: how hard people push depends on the consequences they predict’, Journal of Personality and Social Psychology, 95, 6 (2008), pp. 1541–57; and J. R. Curhan, H. A. Elfenbein and H. Xu, ‘What do people value when they negotiate? Mapping the domain of subjective value in negotiation’, Journal of Personality and Social Psychology, 91, 3 (2006), pp. 493–512. 45 R. Lewicki, D. Saunders and B. Barry, Negotiation, 6th edn (New York: McGraw-Hill/Irwin, 2009). 46 J. C. Magee, A. D. Galinsky and D. H. Gruenfeld, ‘Power, propensity to negotiate, and moving first in competitive interactions’, Personality and Social Psychology Bulletin, February 2007, pp. 200–12. 47 H. R. Bowles, L. Babcock and L. Lei, ‘Social incentives for gender differences in the propensity to initiative negotiations: sometimes it does hurt to ask’, Organizational Behavior and Human Decision Processes, 103 (2007), pp. 84–103. 48 D. A. Moore, ‘Myopic prediction, self-destructive secrecy, and the unexpected benefits of revealing final deadlines in negotiation’, Organizational Behavior & Human Decision Processes, July 2004, pp. 125–39.

426  14 Conflict and negotiation 49 J. R. Curhan, H. A. Elfenbein and H. Xu, ‘What do people value when they negotiate? Mapping the domain of subjective value in negotiation’, Journal of Personality and Social Psychology, 91, 3 (2006), pp. 493–512.

64 A. Zerres, J. Hüffmeier, P. A. Freund, K. Backhaus and G. Hertel, ‘Does it take two to tango? Longitudinal effects of unilaterial and bilateral integrative negotiation training’, Journal of Applied Psychology, 98 (2013), pp. 478–91.

50 Thomas, ‘Conflict and negotiation processes in organizations’.

65 G. Lelieveld, E. Van Dijk, I. Van Beest and G. A. Van Kleef, ‘Why anger and disappointment affect other’s bargaining behavior differently: the moderating role of power and the mediating role of reciprocal complementary emotions’, Personality and Social Psychology Bulletin, 38 (2012), pp. 1209–21.

51 P. M. Morgan and R. S. Tindale, ‘Group vs. individual performance in mixed-motive situations: exploring an inconsistency’, Organizational Behavior & Human Decision Processes, January 2002, pp. 44–65. 52 C. E. Naquin, ‘The agony of opportunity in negotiation: number of negotiable issues, counterfactual thinking, and feelings of satisfaction’, Organizational Behavior & Human Decision Processes, May 2003, pp. 97–107. 53 M. Giacomantonio, C. K. W. De Dreu and L. Mannetti, ‘Now you see it, now you don’t: interests, issues, and psychological distance in integrative negotiation’, Journal of Personality and Social Psychology, 98, 5 (2010), pp. 761–74. 54 F. S. Ten Velden, B. Beersma and C. K. W. De Dreu, ‘It takes one to tango: the effect of dyads’ epistemic motivation composition in negotiation’, Personality and Social Psychology Bulletin, 36, 11 (2010), pp. 1454–66. 55 C. K. W. De Dreu, L. R. Weingart and S. Kwon, ‘Influence of social motives on integrative negotiation: a meta-analytic review and test of two theories’, Journal of Personality & Social Psychology, May 2000, pp. 889–905.

66 S. Côté, I. Hideg and G. A. van Kleef, ‘The consequences of faking anger in negotiations’, Journal of Experimental Social Psychology, 49 (2013), pp. 453–63. 67 G. A. Van Kleef and C. K. W. De Dreu, ‘Longer-term consequences of anger expression in negotiation: retaliation or spillover?’, Journal of Experimental Social Psychology, 46, 5 (2010), pp. 753–60. 68 H. Adam and A. Shirako, ‘Not all anger is created equal: the impact of the expresser’s culture on the social effects of anger in negotiations’, Journal of Applied Psychology, 95, 5 (2013), pp. 785–98. 69 Lelieveld, Van Dijk, Van Beest and Van Kleef, ‘Why anger and disappointment affect other’s bargaining behavior differently’. 70 M. Olekalns and P. L Smith, ‘Mutually dependent: power, trust, affect, and the use of deception in negotiation’, Journal of Business Ethics, 85, 3 (2009), pp. 347–65.

56 This model is based on R. J. Lewicki, ‘Bargaining and negotiation’, Exchange: The Organizational Behavior Teaching Journal, 6, 2 (1981), pp. 39–40.

71 A. W. Brooks and M. E. Schweitzer, ‘Can nervous Nellie negotiate? How anxiety causes negotiators to make low first offers, exit early, and earn less profit’, Organizational Behavior and Human Decision Processes, 115, 1 (2011), pp. 43–54.

57 J. R. Curhan, H. A. Elfenbein and G. J. Kilduff, ‘Getting off on the right foot: subjective value versus economic value in predicting longitudinal job outcomes from job offer negotiations’, Journal of Applied Psychology, 94, 2 (2009), pp. 524–34.

72 M. Sinaceur, H. Adam, G. A. Van Kleef and A. D. Galinsky, ‘The advantages of being unpredictable: how emotional inconsistency extracts concessions in negotiation’, Journal of Experimental Social Psychology, 49 (2013), pp. 498–508.

58 M. H. Bazerman and M. A. Neale, Negotiating Rationally (New York: The Free Press, 1992), pp. 67–8.

73 K. Leary, J. Pillemer and M. Wheeler, ‘Negotiating with emotion’, Harvard Business Review, January–February 2013, pp. 96–103.

59 R. P. Larrick and G. Wu, ‘Claiming a large slice of a small pie: asymmetric disconfirmation in negotiation’, Journal of Personality and Social Psychology, 93, 2 (2007), pp. 212–33.

74 L. A. Liu, R. Friedman, B. Barry, M. J. Gelfand and Z. Zhang, ‘The dynamics of consensus building in intracultural and intercultural negotiations’, Administrative Science Quarterly, 57 (2012), pp. 269–304.

60 T. A. Judge, B. A. Livingston and C. Hurst, ‘Do nice guys – and gals – really finish last? The joint effects of sex and agreeableness on income’, Journal of Personality and Social Psychology, 102 (2012), pp. 390–407. 61 N. Dimotakis, D. E. Conlon and R. Ilies, ‘The mind and heart (literally) of the negotiator: personality and contextual determinants of experiential reactions and economic outcomes in negotiation’, Journal of Applied Psychology, 97 (2012), pp. 183–93. 62 E. T. Amanatullah, M. W. Morris and J. R. Curhan, ‘Negotiators who give too much: unmitigated communion, relational anxieties, and economic costs in distributive and integrative bargaining’, Journal of Personality and Social Psychology, 95, 3 (2008), pp. 723–38; and D. S. DeRue, D. E. Conlon, H. Moon and H. W. Willaby, ‘When is straightforwardness a liability in negotiations? The role of integrative potential and structural power’, Journal of Applied Psychology, 94, 4 (2009), pp. 1032–47. 63 B. Barry and R. A. Friedman, ‘Bargainer characteristics in distributive and integrative negotiation’, Journal of Personality & Social Psychology, February 1998, pp. 345–59; and H. A. Elfenbein, J. R. Curhan, N. Eisenkraft, A. Shirako and L. Baccaro, ‘Are some negotiators better than others? Individual differences in bargaining outcomes’, Journal of Research in Personality, December 2008, pp. 1463–75.

75 M. Liu, ‘The intrapersonal and interpersonal effects of anger on negotiation strategies: a cross-cultural investigation’, Human Communication Research, 35, 1 (2009), pp. 148–69; and H. Adam, A. Shirako and W. W. Maddux, ‘Cultural variance in the interpersonal effects of anger in negotiations’, Psychological Science, 21, 6 (2010), pp. 882–9. 76 P. D. Trapnell and D. L. Paulhus, ‘Agentic and communal values: their scope and measurement’, Journal of Personality Assessment, 94 (2012), pp. 39–52. 77 C. T. Kulik and M. Olekalns, ‘Negotiating the gender divide: lessons from the negotiation and organizational behavior literatures’, Journal of Management, 38 (2012), pp. 1387–415. 78 C. Suddath, ‘The art of haggling’, Bloomberg Businessweek, 26 November 2012, p. 98. 79 Kulik and Olekalns, ‘Negotiating the gender divide’, p. 1390. 80 A. Tugend, ‘Tips for putting a price on your work’, New York Times, 28 January 2012, p. B5. 81 L. J. Kray, C. C. Locke and A B. Van Zant, ‘Feminine charm: an experimental analysis of its costs and benefits in negotiations’, Personality and Social Psychology Bulletin, 38 (2012), pp. 1343–57. 82 S. de Lemus, R. Spears, M. Bukowski, M. Moya and J. Lupiáñez, ‘Reversing implicit gender stereotype activation as a function

ENDNOTES   427 of exposure to traditional gender roles’, Social Psychology, 44 (2013), pp. 109–16. 83 D. A. Small, M. Gelfand, L. Babcock and H. Gettman, ‘Who goes to the bargaining table? The influence of gender and framing on the initiation of negotiation’, Journal of Personality and Social Psychology, 93, 4 (2007), pp. 600–13. 84 E. T. Amanatullah and M. W. Morris, ‘Negotiating gender roles: gender differences in assertive negotiating are mediated by women’s fear of backlash and attenuated when negotiating on

behalf of others’, Journal of Personality and Social Psychology, 98, 2 (2010), pp. 256–67. 85 Wall and Blum, ‘Negotiations’, pp. 283–87. 86 Fight, Flight or Face it? Celebrating the Effective Management of Conflict at Work, CIPD/OPP 2008. 87 K. O’Connor and P. Carnevale, ‘A nasty but effective negotiation strategy: misrepresentation of a common-value issue’, Personality and Social Psychology Bulletin, May 1997, pp. 504–15.

CHAPTER 15 Foundations of organization structure Learning objectives After studying this chapter, you should be able to: 1 Identify the six elements of an organization’s structure. 2 Identify the characteristics of a bureaucracy. 3 Describe a matrix organization. 4 Identify the characteristics of a virtual organization. 5 Show why managers want to create boundaryless organizations. 6 Demonstrate how organizational structures differ and contrast mechanistic and organic structural models. 7 Analyse the behavioural implications of different organizational designs.

Every revolution evaporates and leaves behind only the slime of a new bureaucracy. Franz Kafka

THIS ORGANIZATION IS DIS-ORGANIZATION!

Justin Williams/Press Association Images

Three decades ago, Lars Kolind and his colleagues built a business model so daring – and so successful – that they conquered new markets and captured the imagination of business innovators around the world that has influenced organizational design to this day. Lars Kolind arrived at Oticon, a Danish hearing aid manufacturer, in 1988 to revive a deeply troubled company. He cut costs, increased productivity and quickly steered the company back into the black. But he realized that incremental improvements would not be enough to prosper against diversified giants such as Sony, Siemens and Philips. On New Year’s Day 1990, Kolind released a four-page memo on reinventing the company. It amounted to a declaration of disorganization. Oticon needed breakthroughs, Kolind wrote, and breakthroughs ‘require the combination of technology with audiology, psychology and imagination. The ability to “think the unthinkable” and make it happen.’ In organizations of the future, he continued, ‘staff would be liberated to grow, personally and professionally, and to become more creative, action-oriented, and efficient.’ What was the enemy of these new organizations? The organization itself.

So Kolind abolished the formal organization. Projects, not functions or departments, became the defining unit of work. Oticon teams formed, disbanded and formed again as the work required. Project leaders (basically, anyone with a compelling idea) competed to attract the resources and people to deliver results. Project owners (members of the company’s 10-person management team) provided advice and support, but made few actual decisions. The company had a hundred or so projects at any one time, and most people worked on several projects at once. It was, essentially, a free market in work. ‘We want each project to feel like a company, and the project leader to feel like a CEO,’ Kolind said. ‘We allow a lot of freedom. We don’t worry if we use more resources than planned. Deadlines are what really matter.’ The company’s physical space reflects its logic of work. All vestiges of hierarchy disappeared. Oticon headquarters was transformed into an anti-paper anti-office with uniform mobile workstations consisting of desks without drawers and state-of-the-art networked computers. People are always on the move, their ‘office’ nothing more than where they choose to park their caddie for the duration of a project – anywhere from a few weeks to several months. It was an environment that maximized walking, talking and acting. Kolind called it the spaghetti organization, because the place had no fixed structure yet somehow held together. Ideas bubbled up and turned into hits such as a new hearing aid that required less adjustment. Sales and profits soared and the company became a model for management creativity. Today, although some of the old structures have crept back in as the company has grown and Kolind eventually left, the spaghetti revolution still survives. Oticon moved its 900 head office employees to brand new facilities at Kongebakken specifically designed to foster daily cross-disciplinary collaboration. It features a ‘home town’ area, where personal workspaces are located. People share space with those who are working on the same projects or with their group. The nucleus of the building is the ‘downtown’ area, or ‘town square’. This is where employees spontaneously venture ‘outside’, and where ideas are encouraged and nurtured. Here, people can flip through magazines, look at sketches on whiteboards as big as living-room floors or just spar with colleagues at the coffee bar. The relaxed atmosphere helps retain top engineers, keeping Oticon at the forefront of innovation. And the company remains very successful. But some things have clearly changed. Everyone has a boss to whom they report and they no longer have total freedom to choose projects. That seems to suit people fine. A degree of freedom sparks creativity, but Oticon workers also feel comfortable with some formalization. The trick is striking the right balance.

Sources: P. LaBarre (1996) ‘This organization is dis-organization’, Fast Company, 18 December 2007; J. Ewing ‘No-cubicle culture: hearing-aid maker Oticon removed all office boundaries – and has flourished by learning which ones it needs’, Business Week, 4047, 20 August 2007, p. 60; www.oticon.com. Accessed 27 August 2015.

430  15 Foundations of organization structure

Structural decisions are arguably the most fundamental ones a leader, such as Oticon’s Lars Kolind, has to make towards sustaining organizational growth.1 In this chapter we delve into the elements of an organization’s structure and how they can affect behaviour.

REFLECTION Think about your place of work or an organization you are familiar with. Do you think the way the firm has chosen to organize its people affects the behaviour of those who work there? If so, how?

What is organizational structure? organizational structure The way in which job tasks are formally divided, grouped and coordinated.

1  Identify the six elements of an organization’s structure.

work specialization The degree to which tasks in an organization are subdivided into separate jobs.

An organizational structure defines how job tasks are formally divided, grouped and coordinated. There are six key elements that managers need to address when they design their organization’s structure: work specialization, departmentalization, chain of command, span of control, centralization and decentralization and formalization.2 Table 15.1 presents each of these elements as answers to an important structural question, and the following sections describe these six elements of structure.

Work specialization Early in the twentieth century, Henry Ford became rich and famous by building automobiles on an assembly line. Every Ford worker was assigned a specific, repetitive task. For instance, one person would just put on the right-front wheel and someone else would install the rightfront door. By dividing jobs into small standardized tasks, which could be performed over and over again, Ford was able to produce cars at the rate of one every 10 seconds, while using employees who had relatively limited skills. Ford demonstrated that work can be performed more efficiently if employees are allowed to specialize. Today we use the term work specialization, or division of labour, to describe the degree to which activities in the organization are subdivided into separate jobs. The essence of work specialization is that rather than an entire job being done by one individual, it is broken down into a number of steps, with each step being completed by a separate individual. In essence, individuals specialize in doing part of an activity rather than the entire activity. By the late 1940s, most manufacturing jobs in industrialized countries were being done with high work specialization. Because not all employees in an organization have the same

Table 15.1  Key design questions and answers for designing the proper organizational structure The key question

The answer is provided by

1.

To what degree are activities subdivided into separate jobs?

Work specialization

2.

On what basis will jobs be grouped together?

Departmentalization

3.

To whom do individuals and groups report?

Chain of command

4.

How many individuals can a manager efficiently and effectively direct?

Span of control

5.

Where does decision-making authority lie?

Centralization and decentralization

6.

To what degree will there be rules and regulations to direct employees and managers?

Formalization

What is organizational structure?   431

skills, management saw specialization as a means to make the most efficient use of its employees’ skills. (High) Managers also saw other efficiencies that could be achieved through work specialization. Employee skills at performing a task successfully increase through repetition. Less time is spent in changing tasks, in putting Im away one’s tools and equipment from a prior step in the work process, and in getting ready for another. Equally important, training for specialization is more efficient from the organization’s perspective. It’s easier and (Low) Work specialization (High) less costly to find and train workers to do specific and Figure 15.1  Economies and diseconomies of work repetitive tasks. This is especially true of highly sophisspecialization ticated and complex operations. For example, could Airbus produce an A380, the world’s largest passenger plane, if one person had to build the entire plane alone? Not likely! Finally, work specialization increases efficiency and productivity by encouraging the creation of special inventions and machinery. Thus, for much of the first half of the twentieth century, managers viewed work specializ­ ation as an unending source of increased productivity; and they were probably right. Because specialization was not widely practised, its introduction almost always generated higher productivity. But by the 1960s, there came increasing evidence that a good thing can be carried too far. The point had been reached in some jobs at which the human diseconomies from specialization – which surfaced as boredom, fatigue, stress, low productivity, poor quality, increased absenteeism and high turnover – more than offset the economic advantages (see Figure 15.1). In such cases, productivity could be increased by enlarging, rather than narrowing, the scope of job activities. In addition, a number of companies found that by giving employees a variety of activities to do, allowing them to do a whole and complete job, and putting them into teams with interchangeable skills, they often achieved significantly higher output, with increased employee satisfaction. Most managers today see work specialization as neither obsolete nor an unending source of increased productivity. Rather, managers recognize the economies it provides in certain types of jobs and the problems it creates when it’s carried too far. You’ll find, for example, high work specialization being used by McDonald’s to efficiently make and sell hamburgers and fries and by medical specialists in most health organizations. Amazon’s Mechanical Turk program, TopCoder, and others like it have facilitated a new trend in microspecialization in which extremely small pieces of programming, data processing or evaluation tasks are delegated to a global network of individuals by a program manager who then assembles the results.3 For example, a manager who has a complex but routine computer program to write might send a request for specific subcomponents of the code to be written and tested by dozens of subcontracted individuals in the network (which spans the entire globe), enabling the project to be completed far more quickly than if a single programmer were writing the parts. This emerging trend suggests there still may be advantages to be had in specialization, particularly for offices where job sharing and part-time work are prevalent.4 Wherever job roles can be broken down into specific tasks or projects, specialization is possible. This opens the potential for employers to use online platforms to assign multiple workers to tasks from a broader functional role like marketing.5 Thus, whereas specialization of yesteryear focused on breaking manufacturing tasks into specific duties within the same plant, today’s specialization breaks complex tasks into specific elements by technology, by expertise, and often globally. Yet the core principle is the same. pa c of t fro sp m ec ec ial on iza om tio n

departmentalization The basis by which jobs in an organization are grouped together.

huma Impa n d ct ise fro co m no m ie

s

Productivity

ies

Departmentalization Once you’ve divided jobs up through work specialization, you need to group these jobs together so that common tasks can be coordinated. The basis by which jobs are grouped together is called departmentalization.

432  15 Foundations of organization structure

chain of command The unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom. authority The rights inherent in a managerial position to give orders and to expect the orders to be obeyed. unity of command The idea that a subordinate should have only one superior to whom he or she is directly responsible.

One of the most popular ways to group activities is by functions performed. A m ­ anufacturing manager might organize a plant by separating engineering, accounting, manufacturing, personnel and supply specialists into departments. Of course, departmentalization by function can be used in all types of organizations. Only the functions change to reflect the organiz­ ation’s objectives and activities. A hospital might have departments devoted to research, patient care, accounting, and so forth. A professional football franchise might have departments entitled Player Personnel, Ticket Sales and Travel and Accommodations. The major advantage to this type of grouping is obtaining efficiencies from putting like specialists together. Jobs can also be departmentalized by the type of product or service the organization produces. Procter & Gamble, for instance, is organized along these lines. Each major product – such as Tide, Pampers, Charmin and Pringles – is placed under the authority of an executive who has complete global responsibility for that product. The major advantage to this type of grouping is increased accountability for product performance, since all activities related to a specific product are under the direction of a single manager. Another way to departmentalize is on the basis of geography or territory. The sales function, for instance, may have northern, western, eastern and southern European regions. Each of these regions is, in effect, a department organized around geography. If an organization’s customers are scattered over a large geographic area and have similar needs based on their location, then this form of departmentalization can be valuable. Toyota, in the words of CEO Akio Toyoda, recently changed its management structure into geographic regions ‘so that they may develop and deliver ever better products’.6 Process departmentalization works for processing customers as well as products. If you’ve ever been to a motor vehicle office to get a driver’s licence, you probably went through several departments before receiving your licence. For example, applicants may go through three steps, each handled by a separate department: (1) validation by motor vehicles division; (2) processing by the licensing department; and (3) payment collection. A final category of departmentalization is to use the particular type of customer the organization seeks to reach. Microsoft, for example, is organized around four customer markets: consumers, large corporations, software developers and small businesses. The assumption underlying customer departmentalization is that customers in each department have a common set of problems and needs that can best be met by having specialists for each. It is important to note that large organizations may use all, or at least some, of the forms of departmentalization that we’ve described. A major Japanese electronics firm, for instance, organizes each of its divisions along functional lines and its manufacturing units around processes; it departmentalizes sales around seven geographic regions and divides each sales region into four customer groupings. Departmentalization by four customer segments – consumers, software developers, small businesses and large corporations – helps Microsoft better understand and respond to each group’s needs. Products and services Microsoft designs for consumers include Bing, Windows, Xbox, Surface and Skype.

Chain of command While the chain-of-command concept was once a basic cornerstone in the design of organ­ izations, it has far less importance today.7 But contemporary managers should still consider its implications, particularly for industries that deal with life-or-death situations. The chain of command is an unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who reports to whom. You can’t discuss the chain of command without discussing two complementary concepts: authority and unity of command. Authority refers to the rights inherent in a managerial position to give orders and expect the orders to be obeyed. To facilitate coordination, each managerial position is given a place in the chain of command, and each manager is given a degree of authority in order to meet their responsibilities. The unity-of-command principle helps preserve the concept of an unbroken line of authority. It states that a person should have one and only one superior to whom that person is directly responsible. If the unity of command is broken, an employee might have to cope with conflicting demands or priorities from several superiors.

Nell Redmond/AP/Press Association Images

What is organizational structure?   433

Departmentalization by four customer segments – consumers, software developers, small businesses and large corporations – helps Microsoft better understand and respond to each group’s needs. Products and services Microsoft designs for consumers include Bing, Windows, Xbox, Surface and Skype.

Times change, and so do the basic tenets of organizational design. A low-level employee today can access information in seconds that was available only to top managers a generation ago. Operating employees are empowered to make decisions previously reserved for management. Add the popularity of self-managed and cross-functional teams as well as the creation of new structural designs that include multiple bosses, and you can see why authority and unity of command may appear to hold less relevance. However, many organizations still find they can be most productive by enforcing the chain of command. Indeed, one survey of more than 1,000 managers found that 59 per cent of them agreed with the statement, ‘There is an imaginary line in my company’s organizational chart. Strategy is created by people above this line, while strategy is executed by people below the line.’8 However, this same survey found that lower-level employees’ buy-in to the organization’s strategy was inhibited by their reliance on the hierarchy for decision making.

Span of control span of control The number of subordinates a manager can efficiently and effectively direct.

How many employees can a manager efficiently and effectively direct? This question of span of control is important because, to a large degree, it determines the number of levels and managers an organization has. All things being equal, the wider or larger the span, the more efficient the organization. An example can illustrate the validity of this statement. Assume that we have two organizations, each of which has approximately 4,100 ­operative-level employees. As Figure 15.2 illustrates, if one has a uniform span of four and the other a span of eight, the wider span would have two fewer levels and approximately 800 fewer managers. If the average manager made €50,000 a year, the wider span would save

434  15 Foundations of organization structure Members at each level Assuming Assuming span of 4 span of 8

€40 million a year in management salaries! Obviously, wider spans are more efficient in terms of cost. However, at some point, wider spans reduce 1 effectiveness. That is, when the span becomes 1 1 too large, employee performance suffers because 8 2 4 supervisors no longer have the time to provide the 64 3 16 necessary leadership and support. 512 4 64 Narrow, or small, spans have their advocates. 4,096 5 256 By keeping the span of control to five or six 6 Span of 8: 1,024 employees, a manager can maintain close control.9 Operatives = 4,096 7 But narrow spans have three major drawbacks. 4,096 Managers (Levels 1– 4) = 585 First, as already described, they’re expensive Span of 4: because they add levels of management. Second, = 4,096 Operatives they make vertical communication in the organManagers (Levels 1– 6) = 1,365 ization more complex. The added levels of hierFigure 15.2  Contrasting spans of control archy slow down decision making and tend to isolate upper management. Third, narrow spans of control encourage overly tight supervision and discourage employee autonomy. The trend in recent years has been towards wider spans of control. They’re consistent with firms’ efforts by companies to reduce costs, cut overheads, speed up decision making, increase flexibility, get closer to customers and empower employees. However, to ensure that performance doesn’t suffer because of these wider spans, organizations have been investing heavily in employee training. Managers recognize that they can handle a wider span when employees know their jobs inside and out or can turn to their co-workers when they have questions. Organizational level

(Highest)

Centralization and decentralization

centralization The degree to which decision making is concentrated at a single point in an organization.

In some organizations, top managers make all the decisions. Lower-level managers merely carry out top management’s directives. At the other extreme, there are organizations in which decision making is pushed down to the managers who are closest to the action. The former organizations are highly centralized; the latter are decentralized. The term centralization refers to the degree to which decision making is concentrated at a single point in the organization. The concept includes only formal authority – that is, the rights inherent in a position. An organization characterized by centralization is an inherently different structural animal from one that is decentralized. In a decentralized organization, action can be taken more quickly to solve problems, more people provide input into decisions and employees are less likely to feel alienated from those who make the decisions that affect their work lives. Recent research indicates the effects of centralization and decentralization can be predicted: centralized organizations are better for avoiding commission errors (bad choices), while decentralized organizations are better for avoiding omission errors (lost ­opportunities).10 Consistent with recent management efforts to make organizations more flexible and responsive, there has been a marked trend towards decentralizing decision making. In large companies, lower-level managers are closer to ‘the action’ and typically have more detailed knowledge about problems than do top managers. For instance, Germany’s SMA Solar Technology puts decision making in the hands of employees. ‘Reason instead of power’ is the motto when decisions are made. This approach leads to employees having a feeling of greater ownership over what they do and makes them more innovative and responsive to customers. Similarly, when Procter & Gamble empowered small groups of employees to make many decisions about new-product development independent of the usual hierarchy, it was able to rapidly increase the proportion of new products ready for market.11 Research investigating a large number of Finnish organizations demonstrated that companies with decentralized research and development offices in multiple locations were better at producing innovation than companies that centralized all research and development in a single office.12 Decentralization is often necessary for companies with offshore sites because localized decision making is needed to respond to each region’s profit opportunities, client base and

Common organizational designs   435

specific laws, while centralized oversight is needed to hold regional managers accountable. Failure to successfully balance these priorities can harm not only the company, but also its relationships with foreign governments, as in the groundbreaking case brought by Argentina’s government against Britain’s HSBC Holdings bank for wrongdoing at its Argentina subsidiary. If the charges in the case prove correct, the local branch aided tax evasion and money laundering through phantom accounts at the local subsidiary.13 Perhaps this is a situation in which tighter corporate oversight could have made this impossible.

Formalization formalization The degree to which jobs within an organization are standardized.

Formalization refers to the degree to which jobs within the organization are standardized. If a

job is highly formalized, then the job incumbent has a minimal amount of discretion over what is to be done, when it is to be done and how it is to be done. Employees can be expected always to handle the same input in exactly the same way, resulting in a consistent and uniform output. There are explicit job descriptions, lots of organizational rules and clearly defined procedures covering work processes in organizations in which there is high formalization. Where formalization is low, job behaviours are relatively unprogrammed and employees have a great deal of freedom to exercise discretion in their work. Formalization not only eliminates the possibility of employees engaging in alternative behaviours but it even removes the need for employees to consider alternatives. The degree of formalization can vary widely between organizations and within organizations. Certain jobs, for instance, are well known to have little formalization. University book sales reps – the representatives of publishers who call on professors to inform them of their company’s new publications – have a great deal of freedom in their jobs. They have no standard sales pitch and the extent of rules and procedures governing their behaviour may be little more than the requirement that they submit a weekly sales report and some suggestions on what to emphasize for the various new titles. At the other extreme, there are clerical and editorial positions in the same publishing houses for which employees are required to be at their desks by 8 a.m. or be docked a half-hour’s pay and, once at that desk, to follow a set of precise procedures dictated by management. Recent research from 94 high-technology Chinese firms showed that formalization is a detriment to team flexibility in decentralized organization structures, suggesting that formalization does not work as well where duties are inherently interactive, or where there is a need to be flexible and innovative.14

Common organizational designs We now turn to describing three of the more common organizational designs found in use: the simple structure, the bureaucracy and the matrix structure.

The simple structure simple structure A structure characterized by a low degree of departmentalization, wide spans of control, authority centralized in a single person and little formalization.

What do a small retail store, an electronics firm run by a hard-driving entrepreneur, and an airline in the midst of a companywide pilot’s strike have in common? They probably all use the simple structure. The simple structure is said to be characterized most by what it is not rather than by what it is. The simple structure is not elaborate.15 It has a low degree of departmentalization, wide spans of control, authority centralized in a single person and little formalization. The simple structure is a ‘flat’ organization; it usually has only two or three vertical levels, a loose body of employees and one individual in whom the decision-making authority is centralized. Most companies start as a simple structure, and many innovative technology-based firms with short expected lifespans like mobile phone app development firms remain compact by design.16 The simple structure is most widely adopted in small businesses in which the manager and the owner are one and the same. This, for example, is illustrated in Figure 15.3,

436  15 Foundations of organization structure

Jack Gold, owner–manager Johnny Moore, salesperson

Edna Joiner, salesperson

Bob Munson, salesperson

Norma Sloman, salesperson

Jerry Plotkin, salesperson

Helen Wright, cashier

Figure 15.3  A simple structure ( Jack Gold’s men’s store)

an ­organization chart for a retail men’s store. Jack Gold owns and manages this store. Although he employs five full-time salespeople, a cashier and extra personnel for weekends and holidays, he ‘runs the show’. Though he is typical, in times of crisis large companies often simplify their structures as a means of focusing their resources. When Anne Mulcahy took over as CEO at Xerox, its product mix and management structure were overly complex. She simplified both, cutting corporate overhead by 26 per cent. ‘It’s a case of placing your bets in a few areas,’ she said.17 The strength of the simple structure lies in its simplicity. It’s fast, flexible and inexpensive to maintain, and accountability is clear. One major weakness is that it’s difficult to maintain in anything other than small organizations. It becomes increasingly inadequate as an organization grows because its low formalization and high centralization tend to create information overload at the top. As size increases, decision making typically becomes slower and can eventually come to a standstill as the single executive tries to continue making all the decisions. This often proves to be the undoing of many small businesses. If the structure isn’t changed and made more elaborate, the firm often loses momentum and can eventually fail. The simple structure’s other weakness is that it’s risky – everything depends on one person. One person leaving the firm can literally destroy the organization’s information and decision-making centre.

The bureaucracy

2  Identify the characteristics of a bureaucracy.

Mike Abrahams / Alamy

Standardization! That’s the key concept that underlies all bureaucracies. Take a look at the bank where you keep your account; the department store where you buy your clothes; or the

Prisons are an example of organizations that suit bureaucratic design principles for efficiency, coordination, control, safety and security. Prisons require a very clear command structure, standardised work processes and formalised rules and regulations to effectively perform challenging tasks.

Common organizational designs   437

bureaucracy An organization structure with highly routine operating tasks achieved through specialization, very formalized rules and regulations, tasks that are grouped into functional departments, centralized authority, narrow spans of control and decision making that follows the chain of command.

government offices that collect your taxes, enforce health regulations or provide local fire protection. They all rely on standardized work processes for coordination and control. The bureaucracy is characterized by highly routine operating tasks achieved through specialization, very formalized rules and regulations, tasks that are grouped into functional departments, centralized authority, narrow spans of control and decision making that follows the chain of command. As the opening quote to this chapter attests, bureaucracy is a dirty word in many people’s minds. However, it does have its advantages. The primary strength of the bureaucracy lies in its ability to perform standardized activities in a highly efficient manner. Putting like specialties together in functional departments results in economies of scale, mini-mum duplication of personnel and equipment, and employees who have the opportunity to talk ‘the same language’ among their peers. Furthermore, bureaucracies can get by nicely with less talented – and, hence, less costly – middle- and lower-level managers because rules and regulations substitute for managerial discretion. Standardized operations, coupled with high formalization, allow decision making to be centralized. There is little need, therefore, for innovative and experienced decision makers below the level of senior executives. One of the major weaknesses of a bureaucracy is illustrated in the following dialogue among four executives in one company: ‘You know, nothing happens in this place until we produce something,’ said the production executive. ‘Wrong,’ commented the research and development manager. ‘Nothing happens until we design something!’ ‘What are you talking about?’ asked the marketing executive. ‘Nothing happens here until we sell something!’ finally, the exasperated accounting manager responded, ‘It doesn’t matter what you produce, design, or sell. No one knows what happens until we tally up the results!’ This conversation highlights that bureaucratic specialization can create conflicts in which functional-unit goals override the overall goals of the organization. The other major weakness of a bureaucracy is something we’ve all experienced at one time or another when having to deal with people who work in these organizations: obsessive concern with following the rules. When cases arise that don’t precisely fit the rules, there is no room for modification. The bureaucracy is efficient only as long as employees confront problems that they have previously encountered and for which programmed decision rules have already been established.

‘Hierarchies are a thing of the past’ Mikko Ketokivi argues that this is partly true. He claims that, ‘Hierarchies where the subordinate’s behaviour is strictly controlled by authority are – or at least should be – a thing of the past for many companies. But “healthy hierarchies” are very much “in”. Specifically, there has to be a chain of command in all organizations, and the rules of the hierarchy must be clear. Not all issues can be debated and solved on a peer-to-peer basis and through mutual adjustment, without hierarchy – nothing would get done, we’d sit in meetings all day every day and much of the decision making would become politicized (some of us already feel this pain in our

MYTH OR SCIENCE? own organizations). Some decisions must be made by referral to authority. However, at the same time the top management must understand how to identify and nurture the capabilities that reside in the middle management and the operational level, which is easier said than done.’ Ketokivi’s view reflects the notion that hierarchies are not obsolete. They have an important role to play in coordinating and controlling organizations, but hierarchies can also slow decision making causing organizations to become unresponsive in an increasingly volatile environment. Source: Based on M. Ketokivi, http://www. ketokivi.fi/. Accessed 12 April 2009.

The matrix structure matrix structure A structure that creates dual lines of authority and combines functional and product departmentalization.

Another popular organizational design option is the matrix structure. You’ll find it being used in advertising agencies, aerospace firms, research and development laboratories, construction companies, hospitals, government agencies, universities, management consulting firms and entertainment companies. It combines two forms of departmentalization: functional and product.

438  15 Foundations of organization structure

3  Describe a matrix organization.

Companies that use matrix-like structures include Boeing, BMW, IBM and P&G.18 The strength of functional departmentalization lies in putting like specialists together, which minimizes the number necessary while allowing the pooling and sharing of specialized resources across products. Its major disadvantage is the difficulty of coordinating the tasks of diverse functional specialists so that their activities are completed on time and within budget. Product departmentalization, on the other hand, has exactly the opposite benefits and ­disadvantages. It facilitates coordination among specialties to achieve on-time completion and to meet budget targets. Furthermore, it provides clear responsibility for all activities related to a product, but with duplication of activities and costs. The matrix attempts to gain the strengths of each, while avoiding their weaknesses. The most obvious structural characteristic of the matrix is that it breaks the unity-ofcommand concept. Employees in the matrix have two bosses – their functional department managers and their product managers. Therefore, the matrix has a dual chain of command. Figure 15.4 shows the matrix form as used in a college of business administration. The academic departments of accounting, decision and information systems, marketing and so forth are functional units. In addition, specific programmes (that is, products) are overlaid on the functions. In this way, members in a matrix structure have a dual chain of command – to their functional department and to their product groups. For instance, a professor of accounting who is teaching an undergraduate course may report to the director of undergraduate programmes as well as to the chairperson of the accounting department. The strength of the matrix is its ability to facilitate coordination when the organization has a number of complex and interdependent activities. Direct and frequent contacts between different specialties in the matrix can let information permeate the organization and more quickly reach the people who need it. The matrix reduces ‘bureaupathologies’ – the dual lines of authority reduce people’s tendency to become so busy protecting their little worlds that the organization’s goals become secondary.19 A matrix also achieves economies of scale and facilitates the allocation of specialists by providing both the best resources and an effective way of ensuring their efficient deployment. The major disadvantages of the matrix lie in the confusion it creates, its propensity to foster power struggles and the stress it places on individuals.20 When you dispense with the unity-of-command concept, ambiguity is significantly increased, and ambiguity often leads to conflict. For example, it’s frequently unclear who reports to whom, and it is not unusual for product managers to fight over getting the best specialists assigned to their products. Confusion and ambiguity also create the seeds of power struggles. Bureaucracy reduces the potential for power grabs by defining the rules of the game. When those rules are ‘up for grabs’, power struggles between functional and product managers result. For individuals who desire security and absence from ambiguity, this work climate can produce stress. Reporting to more than one

Programmes Academic departments

Undergraduate Master’s

PhD

Research

Executive development

Accounting Finance Decision and information systems Management Marketing

Figure 15.4  Matrix structure for a college of business administration

Community service

New design options   439

boss introduces role conflict, and unclear expectations introduce role ambiguity. The comfort of bureaucracy’s predictability is absent, replaced by insecurity and stress.

New design options 4  Identify the characteristics of a virtual organization.

Senior managers in a number of organizations have been developing new structural options with fewer layers of hierarchy and more emphasis on opening the boundaries of the organiz­ ation.21 In this section, we describe two such designs: the virtual organization and the boun­ daryless organization. We’ll also discuss how efforts to reduce bureaucracy and increase strategic focus have made downsizing routine.

The virtual organization Why own when you can rent? That question captures the essence of the virtual organization (also sometimes called the network, or modular, organization), typically a small, core organ­ ization that outsources major business functions.22 In structural terms, the virtual organization is highly centralized, with little or no departmentalization. The prototype of the virtual structure is today’s movie-making organization. In Hollywood’s golden era, movies were made by huge, vertically integrated corporations. Studios such as MGM, Warner Brothers and 20th Century Fox owned large movie lots and employed thousands of full-time specialists – set designers, camera people, film editors, directors, and even actors. Today, most movies are made by a collection of individuals and small companies who come together and make films project by project.23 This structural form allows each project to be staffed with the talent most suited to its demands, rather than having to choose just from the people employed by the studio. It minimizes bureaucratic overheads because there is no lasting organization to maintain. And it lessens long-term risks and their costs because there is no long term – a team is assembled for a finite period and then disbanded. Philip Rosedale runs a virtual company called LoveMachine that lets employees send brief electronic messages to one another to acknowledge a job well done; the messages can be then used to facilitate company bonuses. The company has no full-time software d ­ evelopment staff – instead, LoveMachine outsources assignments to freelancers who submit bids for projects like debugging software or designing new features. Programmers work from around the world, including Russia, India, Australia and the United States.24 Similarly, Newman’s Own, the food products company, sells hundreds of millions of dollars in food every year yet employs only 28 people. This is possibly because it outsources almost everything: manufacturing, procurement, shipping and quality control. Figure 15.5 shows a virtual organization in which management outsources all of the primary functions of the business. The core of Independent research and the organization is a small group of executives whose job is to oversee Advertising development directly any activities that are done in-house and to coordinate relaagency consulting tionships with the other organizations that manufacture, distribute firm and perform other crucial functions for the virtual organization. The dotted lines in Figure 15.5 represent the relationships typically maintained under contracts. In essence, managers in virtual strucExecutive tures spend most of their time coordinating and controlling external group relations, typically by way of computer-network links. The major advantage of the virtual organization is its flexibility, which allows individuals with an innovative idea and little money to Factories Commissioned successfully compete against larger, more established organizations. in sales Virtual organizations also save a great deal of money by eliminating South Korea representatives permanent offices and hierarchical roles.25 Virtual organizations’ drawbacks have become increasingly clear as their popularity has grown.26 They are in a state of perpetual Figure 15.5  A virtual organization virtual organization A small, core organization that outsources major business functions.

440  15 Foundations of organization structure

flux and reorganization, which means roles, goals and responsibilities are unclear, setting the stage for political behaviour. Cultural alignment and shared goals can be lost because of the low degree of interaction among members. Team members who are geographically dispersed and communicate infrequently find it difficult to share information and knowledge, which can limit innovation and slow response time. Ironically, some virtual organizations are less adaptable and innovative than those with well-established communication and collaboration networks. A leadership presence that reinforces the organization’s purpose and facilitates communication is thus especially valuable.

The boundaryless organization General Electric’s former chairman, Jack Welch, coined the term boundaryless organization to describe his idea of what he wanted GE to become. Welch wanted to turn his company into a ‘family grocery store’.27 That is, in spite of its monstrous size (2014 revenues were €129 billion), he wanted to eliminate vertical and horizontal boundaries within GE and break down external barriers between the company and its customers and suppliers. The boundaryless organization seeks to eliminate the chain of command, have limitless spans of control and replace departments with empowered teams. Although GE has not yet achieved this boundaryless state – and probably never will – it has made significant progress towards that end. So have other companies, such as Airbus, Nissan, Nestlé and 3M. Let’s take a look at what a boundaryless organization looks like and what some firms are doing to try to make it a reality. By removing vertical boundaries, management flattens the hierarchy. Status and rank are minimized. Cross-hierarchical teams (which include top executives, middle managers, supervisors and operative employees), participative decision-making practices, and the use of 360-degree performance appraisals (in which peers and others above and below the employee evaluate performance) are examples of what GE is doing to break down vertical boundaries. Functional departments create horizontal boundaries. And these boundaries stifle interaction between functions, product lines and units. The way to reduce these barriers is to replace functional departments with cross-functional teams and to organize activities around processes.

boundaryless organization An organization that seeks to eliminate the chain of command, have limitless spans of control, and replace departments with empowered teams.

Bloomberg via Getty Images

5  Show why managers want to create boundaryless organizations.

BMW Group operates as a boundaryless organization in designing, developing and producing its BMW, Rolls-Royce and Mini cars. The automaker’s plant shown here in Jakarta, Indonesia, is part of BMW’s flexible global production network that responds quickly to fluctuations in customer demands and market requirements.

New design options   441

For instance, Xerox now develops new products through multidisciplinary teams that work in a single process instead of around narrow functional tasks. Another way management can cut through horizontal barriers is to use lateral transfers, rotating people into and out of different functional areas. This approach turns specialists into generalists. To break down external boundaries, companies may allow customers to perform functions previously done by management. For example, employee bonuses may be based on customer evaluations. When fully operational, the boundaryless organization also breaks down geographic barriers. Today, most large companies see themselves as global corporations, but some struggle to incorporate geographic regions into their structure. One way to do so is through strategic alliances.28 Firms such as NEC Corporation, Boeing and Apple each have strategic alliances or joint partnerships with dozens of companies. These alliances blur the distinction between one organization and another as employees work on joint projects. Research from 119 international joint ventures (IJVs) in China indicates that these partnerships allow firms to learn from each other and obtain higher new product performance especially where a strong learning culture exists.29

The world is my corporate headquarters ‘Going global’ has meant many things in the evolution of worldwide business: sourcing materials from abroad, selling products overseas and sending employees worldwide among them. In all earlier models, the common theme was that the corporate office is here, and global means out there. This thinking is changing. Enter the rise of office-less companies such as Automattic Inc., with 123 employees working in 26 countries, and Kalypso LP, with 150 employees around the globe. Neither company has a corporate headquarters or, truly, an office of any sort. The implications of this new understanding of what it means to be a global business are logistical, structural and human. On the logistics end of getting work done, office-less companies utilize every technology available, from Skype to blogs. Sensitive information is limited to phone discussions, though the difficulty of scheduling virtual meetings can be tricky across a number of time zones. When needed and at least annually, employees fly to designated intermediate spots for face-to-face time. Employees live where they want or where a strategic company presence for clients is desired. The office-less company isn’t a good fit for every industry. The complete decentralization of the organization’s physical structure dictates a nonhierarchical organization chart. High employee autonomy and empowerment to make decisions means supervision must be very light in order for the company to compete and take advantage of business opportunities specific to one employee’s region, which the rest of the company cannot see.

glOBal

With hiring possibilities worldwide, the company must also be clear about who can recruit new candidates and how to fit them into the organizational structure. Though the officeless company sounds like a good opportunity to maximize the worldwide talent pool, it presents challenges on a human level. According to Bill Poston, founding partner of Kalypso, the office-less company doesn’t work for people ‘who are uncomfortable with ambiguity’. With the technology available, workers aren’t isolated, but the necessary lack of hierarchy means some workers may feel underappreciated. Strong hiring and orientation methods may counteract these challenges, however, and Automattic even has job candidates work on projects before being hired to determine whether they will work well in its office-less environment. Research supports the idea that testing candidates for their natural fit is preferable to subjecting employees to surveillance technology, whether keystroke counts or body sensors. The office-less company is still a rarity in the world, but its popularity is growing. It’s very possible that truly global corporations of the future will need to consider a decentralization strategy that includes either many headquarters – or no headquarters at all. Sources: T. Johns and L. Gratton, ‘The third wave of virtual work’, Harvard Business Review, January–February 2013, pp. 66–73; R. E. Silverman, ‘Step into the office-less company’, Wall Street Journal, 15 September 2012), p. B6; and R. E. Silverman, ‘Tracking sensors invade the workplace’, Wall Street Journal, 7 March 2013, p. B1.

The leaner organization: downsizing The goal of the new organizational forms we’ve described is to improve agility by creating a lean, focused, and flexible organization. Downsizing is a systematic effort to make an o ­ rganization leaner by closing locations, reducing staff, or selling off business units that don’t add value.

442  15 Foundations of organization structure

The radical shrinking of Motorola Mobility in 2012 and 2013 is a case of downsizing to survive after its merger with Google. In response to declining demand for its smartphones, Motorola cut the workforce by 20 per cent in August 2012. When the company posted a €300 million fourth-quarter loss in 2012, with a 40 per cent revenue decline, it cut the workforce again, by 10 per cent. Google called this ‘rightsizing’ and hoped a new Motorola phone would save the company from further layoffs.30 Unfortunately, the hopes were unfounded and Google sold Motorola Mobility to Lenovo in 2014. There are clear advantages of being a lean organization but the impact of downsizing on organizational performance has been a source of controversy.31 Reducing the size of the workforce has an immediately positive outcome in the form of lower wage costs. Companies ­downsizing to improve strategic focus often see positive effects on stock prices after the announcement. An example of this was with Russia’s Gorky Automobile Factory (GAZ), which realized a profit for the first time in many years after President Bo Andersson fired 50,000 workers, half the workforce.32 On the other hand, among companies that only cut employees but don’t restructure, profits and stock prices usually decline. Part of the problem is the effect of downsizing on employee attitudes. Those who remain often feel worried about future layoffs and may be less committed to the organization.33 Stress reactions can lead to increased sickness absences, lower concentration on the job and lower creativity. In companies that don’t invest much in their employees, downsizing can also lead to more voluntary turnover, so vital human capital is lost. The result is a company that is more anaemic than lean. Companies can reduce negative impacts by preparing in advance, thus alleviating some employee stress and strengthening support for the new direction.34 Here are some effective strategies for downsizing. Most are closely linked to the principles for organizational justice we’ve discussed previously: ●

●

●

●

Investment. Companies that downsize to focus on core competencies are more effective when they invest in high-involvement work practices afterwards. Communication. When employers make efforts to discuss downsizing with employees early, employees are less worried about the outcomes and feel the company is taking their perspective into account. Participation. Employees worry less if they can participate in the process in some way. Voluntary early-retirement programmes or severance packages can help achieve leanness without layoffs. Assistance. Severance, extended health care benefits and job search assistance demonstrate a company cares about its employees and honours their contributions.

In short, companies that make themselves lean can be more agile, efficient and productive – but only if they make cuts carefully and help employees through the process.

OB IN THE NEWS

Volkswagen cost cuts will test Herbert Diess by Chris Bryant When Herbert Diess, a former BMW executive, became head of Volkswagen’s core passenger car brand in July 2015, he took on one of the hardest jobs in global carmaking. VW Group boss Martin Winterkorn expects him to lift the underperforming brand’s return on sales to 6 per cent by 2018, compared with 2.5 per cent in 2014, by completing a €5bn cost-cutting plan.

Mr Diess, an Austrian national, must do this without ostracizing VW’s powerful labour chiefs or displeasing Mr Winterkorn. Chief among the challenges at VW is low productivity. Like VW, arch-rival Toyota built over 10m vehicles in 2014, but did so with a quarter of a million fewer employees. That efficiency helped the Japanese carmaker achieve a 10.1 per cent return on sales.

Why do structures differ?   443

Despite the disparity, VW’s German workforce won a 3.4 per cent pay increase and the group’s annual research and development bill rose to €11.5bn. That was the biggest R&D outlay by any global company and more than 80 per cent higher than VW’s R&D spend in 2010. Further, a recession in Brazil and Russia has left the carmaker with excess production capacity and VW is underperforming in the US due to a lack of sport utility vehicles and also faces a slowdown in China. Parting with some of the VW group’s almost 600,000 employees, shuttering one its 130 plants or shifting production away from high-cost Germany would be by far

the simplest way for the carmaker to cut costs. However, history suggests Mr Diess would be foolish to try. In 2004 the carmaker hired restructuring expert Wolfgang Bernard from Chrysler to head the VW brand but his plan to eliminate 20,000 German jobs caused friction with workers and he stood down two years later. ‘Every 10 years or so VW hires an outsider to shake the place up . . . But if you try to move too fast at VW, the body rejects the transplant,’ says Max Warburton at Bernstein Research.

Source: Adapted from Bryant, C. (2015)Volkswagen cost cuts will test Herbert Diess, FT.com, 20 August. © The Financial Times Limited. All Rights Reserved. Pearson Education Ltd. is responsible for providing this adaptation of the original article.

Why do structures differ? 6 Demonstrate how organizational structures differ and contrast mechanistic and organic structural models. mechanistic model A structure characterized by extensive ­departmentalization, high formalization, a limited information ­network and ­centralization. organic model A structure that is flat, uses cross-hierarchical and cross-functional teams, has low formalization, possesses a comprehensive information network and relies on participative decision making.

We’ve described a variety of organizational designs ranging from the highly structured and standardized bureaucracy to the loose and amorphous boundaryless organization. The other designs we discussed tend to exist somewhere between these two extremes. Figure 15.6 recaps our discussions by presenting two extreme models of organizational design. One we’ll call the mechanistic model. It’s generally synonymous with the bureaucracy in that it has highly standardized processes for work, high formalization and more managerial hierarchy. The other extreme, the organic model, looks a lot like the boundaryless organiz­ ation. It’s flat, has fewer formal procedures for making decisions, has multiple decision makers and favours flexible practices.35 With these two models in mind, we’re now prepared to address a couple of questions: Why are some organizations structured along more mechanistic lines whereas others follow organic characteristics? What are the forces that influence the design that is chosen? In this section, we present the major causes or determinants of an organization’s structure.36

The mechanistic model

• • • • • •

High specialization Rigid departmentalization Clear chain of command Narrow spans of control Centralization High formalization

Figure 15.6  Mechanistic versus organic models

The organic model

• • • • • •

Cross-functional teams Cross-hierarchical teams Free flow of information Wide spans of control Decentralization Low formalization

444  15 Foundations of organization structure

Organizational strategy

innovation strategy A strategy that emphasizes the introduction of major new products and services. cost-minimization strategy A strategy that emphasizes tight cost controls, avoidance of unnecessary innovation or marketing expenses, and price cutting. imitation strategy A strategy that seeks to move into new products or new markets only after their viability has already been proven.

An organization’s structure is a means to help management achieve its objectives. Because objectives are derived from the organization’s overall strategy, it’s only logical that strategy and structure should be closely linked. More specifically, structure should follow strategy. If management makes a significant change in its organization’s strategy, the structure will need to be modified to accommodate and support this change.37 Most current strategy frameworks focus on three strategy dimensions – innovation, cost minimization and imitation – and the structural design that works best with each.38 To what degree does an organization introduce major new products or services? An ­innovation strategy does not mean a strategy merely for simple or cosmetic changes from previous offerings but rather one for meaningful and unique innovations. Obviously, not all firms pursue innovation. This strategy may appropriately characterize GlaxoSmithKline and Apple, but it’s not a strategy pursued by conservative retailer Marks & Spencer. Innovative firms will use competitive pay and benefits to attract top candidates and motivate employees to take risks. Some degree of mechanistic structure can actually benefit innovation. Well-developed communication channels, policies for enhancing long-term commitment and clear channels of authority all may make it easier for rapid changes to occur smoothly. An organization that is pursuing a cost-minimization strategy tightly controls costs, refrains from incurring unnecessary innovation or marketing expenses, and cuts prices in selling a basic product. This would describe the strategy pursued by Carrefour or the makers of generic grocery products. Organizations following an imitation strategy try to both minimize risk and maximize opportunity for profit, moving new products or entering new markets only after innovators have proven their viability. Mass-market fashion manufacturers that copy designer styles follow this strategy, as do firms such as Hewlett-Packard and Caterpillar. They follow smaller and more innovative competitors with superior products, but only after competitors have demonstrated the market is there. Italy’s Moleskine SpA, a small maker of fashionable notebooks, is another example of imitation strategy, but in the reverse; looking to open more retail shops around the world, it is employing the expansion strategies of larger, successful fashion companies Salvatore Ferragamo SpA and Brunello Cucinelli.39 Table 15.2 describes the structural option that best matches each strategy. Innovators need the flexibility of the organic structure, whereas cost minimizers seek the efficiency and stability of the mechanistic structure. Imitators combine the two structures. They use a mechanistic structure in order to maintain tight controls and low costs in their current activities, while at the same time they create organic subunits in which to pursue new undertakings.

Organization size There is considerable evidence to support the idea that an organization’s size significantly affects its structure.40 For instance, large organizations – those that typically employ 2,000 or more people – tend to have more specialization, more departmentalization, more vertical levels and more rules and regulations than do small organizations. However, size becomes less important as an organization expands. Why is this? Essentially, once an organization has Table 15.2  The strategy–structure relationship Strategy

Structural option

Innovation

Organic: A loose structure; low specialization, low formalization, decentralized

Cost minimization

Mechanistic: Tight control; extensive work specialization, high formalization, high centralization

Imitation

Mechanistic and organic: Mix of loose with tight properties; tight controls over current activities and looser controls for new undertakings

Why do structures differ?   445

around 2,000 employees, it’s already fairly mechanistic. An additional 500 employees will not have much impact. On the other hand, adding 500 employees to an organization that has only 300 members is likely to result in a significant shift towards a more mechanistic structure.

Technology technology The way in which an organization transfers its inputs into outputs.

The term technology refers to how an organization transfers its inputs into outputs. Every ­ rganization has at least one technology for converting financial, human and physical resources o into products or services. Daimler AG, for instance, predominantly uses an a­ ssembly-line process to make its cars and trucks. On the other hand, universities may use a number of instruction technologies – the ever-popular formal lecture method, the case-analysis, the experiential exercise, programmed learning, online instruction, distance learning and so forth. Regardless, organizational structures adapt to their technology. Numerous studies have been carried out on the technology–structure relationship.41 What differentiates technologies is their degree of routineness. Routine activities are characterized by automated and standardized operations. Examples are injection-mould production of plastic knobs, automated transaction processing of sales transactions and the printing and binding of books. Non-routine activities are customized and require frequent revision and updating. They include furniture restoring, custom shoemaking, genetic research and the writing and editing of books. In general, organizations engaged in non-routine activities tend to prefer organic structures, while those performing routine activities prefer mechanistic structures.

Environment An organization’s environment is composed of institutions or forces outside the organiz­ ation that potentially affect the organization’s performance. These typically include suppliers, customers, competitors, government regulatory agencies, public pressure groups and the like. Why should an organization’s structure be affected by its environment? Because of environmental uncertainty. Some organizations face relatively static environments – few forces in their environment are changing. There are, for example, no new competitors, no new technological breakthroughs by current competitors or little activity by public pressure groups to influence the organization. Other organizations face very dynamic environments – rapidly changing government regulations affecting their business, new competitors, difficulties in acquiring raw materials, continually changing product preferences by customers and so on. Static environments create significantly less uncertainty for managers than do dynamic ones. And because uncertainty is a threat to an organization’s effectiveness, management will try to minimize it. One way to reduce environmental uncertainty is through adjustments in the organization’s structure.42 Research has helped clarify what is meant by environmental uncertainty. It’s been found that there are three key dimensions to any organization’s environment: capacity, volatility and complexity.43 The capacity of an environment refers to the degree to which it can support growth. Rich and growing environments generate excess resources, which can buffer the organization in times of relative scarcity. The degree of routineness differentiates technologies. The The degree of instability in an environment is captured film director Peter Jackson is shown here directing the very in the volatility dimension. When there is a high degree of successful Hobbit trilogy. Nonroutineness characterizes the unpredictable change, the environment is dynamic. This customized work of Jackson who is responsible for creating a makes it difficult for management to predict accurately the vision for the film and guiding the technical crew and actors probabilities associated with various decision alternatives. in the fulfillment of the vision.

Rex: REX Shutterstock/NEW LINE CINEMA/ The Kobal Collection

environment Institutions or forces outside an organization that potentially affect the organization’s performance.

446  15 Foundations of organization structure Stable

Because information technology changes at such a rapid pace, more organizations’ environments are Abundant becoming volatile. Finally, the environment needs to be assessed in terms of complexity – that is, the degree of heterogeneity and concentration among environmental elements. Simple environments – like the gold mining Simple Complex industry where the methods of production, competitive and regulatory pressures and the like haven’t changed significantly in quite some time – are reasonably homogeneous and concentrated. Environments characterized by heterogeneity and dispersion – like the broadband industry – are complex and diverse, Scarce with numerous competitors. Figure 15.7 summarizes our definition of the enviDynamic ronment along its three dimensions. The arrows in Figure 15.7  Three-dimensional model of the environment this figure are meant to indicate movement towards higher uncertainty. So organizations that operate in environments characterized as scarce, dynamic and complex face the greatest degree of uncertainty. Why? Because they have little room for error, high unpredictability and a diverse set of elements in the environment to monitor constantly. Given this three-dimensional definition of environment, we can offer some general conclusions. There is evidence that relates the degrees of environmental uncertainty to different structural arrangements. Specifically, the more scarce, dynamic and complex the environment, the more organic a structure should be. The more abundant, stable and simple the environment, the more the mechanistic structure will be preferred.

EMPLOYABILITY AND STRUCTURE The following excerpt is one author’s take on working in a bureaucratic organization: Bureaucratic organizations are impersonal places to work. Individuals are valued by the tasks they perform, and these tasks are specific and detailed. Formal structures exist that limit individual and personal decisions, and policies allow for little deviation from the norm. Regulations are in place for every job title and little creativity is allowed. Titles for positions are prevalent and everyone is expected to behave according to company policy. Formality at all times is valued and strict discipline is essential for success.

Although most organizations may not be as truly bureaucratic as this, you may react with horror at working at such a place, or perhaps this is your preference? There is substantial evidence that individuals are attracted to, selected by and stay with organizations that suit their personal characteristics. Job candidates who prefer predictability, for instance, are likely to seek out and take employment in bureaucratic structures, and those who want autonomy are more likely to end up in organic structures. It’s important to realize that one structure does not suit all. Source: Quote from Kermit Burley, ‘What is a bureaucratic organization?’, Houston Chronicle, http://smallbusiness.chron.com/bureaucratic-organiz­ ation-20379.html. Accessed 27 August 2015.

Organizational designs and employee behaviour 7  Analyse the behavioural implications of different organizational designs.

We opened this chapter by implying that an organization’s structure can have significant effects on its members. In this section, we want to assess directly just what those effects might be. A review of the evidence linking organizational structures to employee performance and satisfaction leads to a pretty clear conclusion – you can’t generalize! Not everyone prefers the freedom and flexibility of organic structures. Some people are most productive and satisfied when work tasks are standardized and ambiguity is minimized – that is, in mechanistic ­structures. Different factors

Organizational designs and employee behaviour   447

stand out in different structures as well. In highly formalized, heavily structured, mechanistic organizations, the level of fairness in formal policies and procedures is a very important predictor of satisfaction. In more personal, individually adaptive organic organizations, employees value interpersonal justice more.44 So any discussion of the effect of organizational design on employee behaviour has to address individual differences. To illustrate this point, let’s consider employee preferences for work specialization, span of control and centralization.45 The evidence generally indicates that work specialization contributes to higher employee productivity, but at the price of reduced job satisfaction. However, this statement ignores individual differences and the type of job tasks people do. As we noted previously, work ­specialization is not an unending source of higher productivity. Problems start to surface and productivity begins to suffer, when the human diseconomies of doing repetitive and narrow tasks overtake the economies of specialization. As the workforce has become more highly educated and desirous of jobs that are intrinsically rewarding, the point at which productivity begins to decline seems to be reached more quickly than in decades past. Although more people today are undoubtedly turned off by overly specialized jobs than were their parents or grandparents, it would be naive to ignore the reality that there is still a segment of the workforce that prefers the routine and repetitiveness of highly specialized jobs. Some individuals want work that makes minimal intellectual demands and provides the security of routine. For these people, high work specialization is a source of job satisfaction. The empirical question, of course, is whether this represents 2 per cent of the workforce or 52 per cent. Given that there is some self-selection operating in the choice of careers, we might conclude that negative behavioural outcomes from high specialization are most likely to surface in professional jobs occupied by individuals with high needs for personal growth and diversity. A review of the research indicates that it is probably safe to say there is no evidence to support a relationship between span of control and employee satisfaction or performance. Although it is intuitively attractive to argue that large spans might lead to higher employee performance because they provide more distant supervision and more opportunity for personal initiative, the research fails to support this notion. At this point it’s impossible to state that any particular span of control is best for producing high performance or high satisfaction among employees. Again, the reason is probably individual differences. That is, some people like to be left alone, while others prefer the security of a boss who is quickly available at all times. Consistent with several of the contingency theories of leadership discussed in Chapter 12, we would expect factors such as employees’ experiences and abilities and the degree of structure in their tasks to explain when wide or narrow spans of control are likely to contribute to their performance and job satisfaction. However, there is some evidence indicating that a manager’s job satisfaction increases as the number of employees supervised increases. We find fairly strong evidence linking centralization and job satisfaction. In general, organ­ izations that are less centralized have a greater amount of autonomy. And the evidence suggests that autonomy is positively related to job satisfaction. But, again, individual differences surface. While one employee may value their freedom, another may find autonomous environments frustratingly ambiguous. Our conclusion: to maximize employee performance and satisfaction, individual differences, such as experience, personality and the work task, should be taken into account. As we’ll note shortly, culture needs to be taken into consideration, too. One obvious insight needs to be made before we leave this topic: people don’t select employers randomly. There is substantial evidence that individuals are attracted to, selected by and stay with organizations that suit their personal characteristics.46 Job candidates who prefer predictability, for instance, are likely to seek out and take employment in mechanistic structures, and those who want autonomy are more likely to end up in an organic structure. So the effect of structure on employee behaviour is undoubtedly reduced when the selection process facilitates proper matching of individual characteristics with organizational characteristics. Furthermore, companies should strive to establish, promote and maintain the unique identity of their structures since skilled employees may quit as a result of dramatic changes.47 Research suggests national culture influences the preference for structure.48 Organizations that operate with people from high power-distance cultures, such as Greece, France and most of

448  15 Foundations of organization structure

Latin America, find their employees are much more accepting of mechanistic structures than are employees from low-power-distance countries. So consider cultural differences along with individual differences when predicting how structure will affect employee performance and satisfaction. Finally, the changing landscape of organizational structure designs has implications for the individual progressing on a career path. Recent research interviews with managers in Japan, the United Kingdom and the United States indicate that employees who have weathered downsizing and resulting hybrid organizational structures consider their future career prospects diminished. While this may or may not be true, it shows that organizational structure does affect the employee and thus must be carefully designed.49

Work organization

FACE THE FACTS

A survey of work organization in the EU member states characterized four organizational forms:

Advanced forms 1. The learning form (high levels of autonomy, task complexity, learning and problem solving; and by low levels of task monotony, work-rate constraints, teamwork and job rotation). 2. The lean form (high levels of teamwork, job rotation, and learning and problem solving; and by low levels of autonomy and tight quantitative production norms).

Conventional forms 1. The Taylorist form (basically the opposite of those defining the learning form).

2. The traditional form (a residual category that cannot be well characterized, although it is associated with high levels of task monotony).

The results ●

67 per cent of EU employees work in organizations characterized as ‘advanced forms’.

●

64 per cent of Dutch employees work in learning organiz­ ations, compared with 19 per cent in Greece.

●

The learning form is more prevalent in the Netherlands, the Nordic countries and to a lesser extent Germany and Austria. The lean form has a greater presence in the United Kingdom, Spain, Ireland and France.

Source: Employment in Europe, European Commission.

SUMMARY The theme of this chapter has been that an organization’s internal structure contributes to explaining and predicting behaviour. That is, in addition to individual and group factors, the structural relationships in which people work has a bearing on employee attitudes and behaviour. What’s the basis for the argument that structure has an impact on both attitudes and behaviour? To the degree that an organization’s structure reduces ambiguity for employees and clarifies concerns such as ‘What am I supposed to do?’ ‘How am I supposed to do it?’ ‘To whom do I report?’ and ‘To whom do I go if I have a problem?’ it shapes their attitudes and facilitates and motivates them to higher levels of performance. Figure 15.8 summarizes what we’ve discussed. Causes • Strategy • Size • Technology • Environment

determines

Structural designs • Mechanistic • Organic

associated with

Moderated by individual differences and cultural norms

Figure 15.8  Organization structure: its determinants and outcomes

Performance and satisfaction

POINT/COUNTERPOINT   449

IMPLICATIONS FOR MANAGERS ●

● ●

●

●

Specialization can make operations more efficient, but remember that excessive specializ­ ation can create dissatisfaction and reduced motivation. Avoid designing rigid hierarchies that overly limit employees’ empowerment and autonomy. Balance the advantages of virtual and boundaryless organizations against the potential pitfalls before adding flexible workplace options. Downsize your organization to realize major cost savings and focus the company around core competencies – but only if necessary because downsizing can have a significant nega­ tive impact on employee affect. Consider the scarcity, dynamism and complexity of the environment and balance the organic and mechanistic elements when designing an organizational structure.

The end of management?

POINT/COUNTERPOINT

POINT Management – at least as we know it – is dying. Formal organizational structures are giving way to flatter, less bureaucratic, less formal structures. And that’s a good thing. Today, leaders are celebrated for triumphing over structure rather than for working well within it. Innovative companies like Apple, Google, Facebook and Twitter were born and now thrive thanks not to a multilayered bureaucracy, but to an innovative idea that was creatively executed by a flexible group of people freely collaborating. Management in those companies exists to facilitate, rather than control. Only 100 of today’s Fortune 500 companies existed in 1957. Yet management theory and practice continue to adhere to a 1957 mode of thinking. As one future-minded expert noted, ‘The single biggest reason companies fail is that they overinvest in what is, as opposed to what might be.’ How does a traditional, formal, bureaucratic structure foster ‘what might be’ thinking? It doesn’t. The new wave of eliminating job titles is a prime indicator of companies learning to structure for innovation. This trend is a reflection of the changes in job scope that have come with increased technological savvy. For instance, the fact that most managers do their own keyboarding has dramat-

ically changed the job of the office secretary of generations before. The scope of what managers do has broadened to include typing, taking notes and managing their own files/ schedules, while the scope of what secretaries (or administrative assistants) do has broadened to include making social media posts and assuming technical duties. The most innovative firms have questioned whether they need job titles at all, instead emphasizing collaboration throughout the organization. The best companies have eliminated offices altogether and encourage employees to mingle and form teams according to their project interests. This suits younger workers who never did want offices, who aspire to work with the top players rather than report to them, and who value flexible hours and work from home options. Job titles are gone, roles are ambiguous and reporting relationships morph by project. ‘There’s a struggle right now between the old and the new,’ notes Adam Leitman Bailey, a real estate lawyer. ‘We don’t what know works. In the end, it’s what’s going to be best for the talent we hire.’ The talent is ready for the elimination of management as we know it. The successful corporation of the future will have a flatter organizational structure and accountability based on performance.

COUNTERPOINT There is no ‘right size fits all’ approach to organizational structure. How flat, informal and collaborative an ­organization should be depends on many factors, but no matter what, management structure is needed. Let’s consider two cases. People lauded how loosely and informally Warren Buffett structured his investment firm, Berkshire Hathaway. Buffett spends most of his day reading and talking informally ‘with highly gifted people whom he trusts and who trust him’. This sounded wonderful until it was discovered Buffett’s CFO and heir apparent David Sokol was on the take. Sokol made

€2.6  million when he successfully lobbied for Berkshire Hathaway to acquire a firm in which he had secretly acquired a significant stake. His insider manoeuvres discovered, Sokol was forced to resign. Wouldn’t Buffett have known Sokol was compromised if he supervised more closely or had structures in place to check such ‘freedom’? It’s hard to argue with Berkshire Hathaway’s past successes, but they don’t prove the company is ideally structured. Berkshire Hathaway is a cautionary example of the perils of a structure that’s too flat and informal. For the benefits of

450  15 Foundations of organization structure

a formal structure, look no further than Honeywell International. CEO David Cote seems relaxed and fun-loving (witness his Harley-Davidson rides through upscale suburban streets, office attire of leather bomber jacket and jeans, and hip background music at corporate headquarters), but his hard-hitting work ethic is legendary. As the leader of a global technology and manufacturing conglomerate, Cote keeps a tight rein on the four industry divisions and 132,000 employees. Cote’s control focus doesn’t end at the executive suite, thanks to a formal organizational structure with job titles, security clearances, role descriptions . . . the works, at all levels on the organization chart. At the factories, job titles are painted literally on the floor to indicate who needs to be present – and standing – at organizational meetings monitored with a clock hand that turns red when 15 minutes is up. Is Cote a control freak? Maybe, but you can’t argue with success: not only did he successfully merge three disparate company cultures and more than 250 factories, but the new Honeywell has climbed up the Fortune 500 ranks and pulls in €32 billion in annual sales.

The company’s profits have increased faster than sales, in part due to Cote’s insistence on freezing rises and hiring only two to three employees for every four to five who exit. The examples of Berkshire Hathaway and Honeywell illustrate the strong need for management structure in an everchanging, diverse, worldwide marketplace. Sources: A. Bryant, ‘Structure? The flatter the better’, New York Times, 17 January 2010, p. BU2; ‘Honeywell International: from bitter to sweet’, Economist, 14 April 2012, www.economist.com/node/21552631; A. Efrati and S. Morrison, ‘Chief seeks more agile Google’, Wall Street Journal, 22 January 2011, pp. B1, B4; H. El Nasser, ‘What office? Laptops are workspace’, USA Today, 6 June 2012; Fortune 500 rankings, http://money.cnn.com/magazines/fortune/ fortune500/2012/full_list/; ‘Honeywell company structure information from ICIS’, ICIS.com, www.icis.com/v2/companies/9145292/honeywell/structure. html; K. Linebaugh, ‘Honeywell’s hiring is bleak’, Wall Street Journal, 6 March 2013, p. B3; A. Murray, ‘The end of management’, Wall Street Journal, 21 August 2010, p. W3; A. R. Sorkin, ‘Delegator in chief ’, New York Times, 24 April 2011, p. B4; and S. Tully, ‘How Dave Cote got Honeywell’s groove back’, CNN Money, 14 May 2012, http://management.fortune.cnn.com/2012/05/14/500-­ honeywell-cote/.

QUESTIONS FOR REVIEW 1. What are the six key elements that define an organiz­

ation’s structure? 2. What is a bureaucracy, and how does it differ from a

simple structure? 3. What is a matrix organization? 4. What are the characteristics of a virtual organization?

5. How can managers create a boundaryless organization? 6. Why do organizational structures differ, and what is

the difference between a mechanistic structure and an organic structure? 7. What are the behavioural implications of different

organizational designs?

EXPERIENTIAL EXERCISE DISMANTLING A BUREAUCRACY Pre-work

Assess bureaucracy

In order to understand how to improve an organizational structure, it is important to start with a clear understanding of how an organization is currently structured. For this exercise, you will perform research on the college or university you are attending or another organization that your professor identifies. Using the organization’s website, find out about different administrative units, paying special attention to noncore functions like information technology and human resources. While doing this research, assemble a list of five features that resemble a bureaucracy and five features that you think might be successfully managed by an external partner.

Your initial task will be to share your assessments of the features of the organization that seem bureaucratic in nature. What are the common functions that tend to be run in a bureaucratic manner? Try to identify standardized work practices that enhance coordination and control. In particular, think of systems of rules, regulations, departments and offices that have highly specific and specialized roles. Collectively, your team should allocate about 15 minutes to accomplish this task.

Create groups

To dismantle a bureaucracy, it is important to consider both the advantages and disadvantages of the current system.

Your instructor will form you into groups of at least four individuals at the start of class.

Dismantle bureaucracy

ETHICAL DILEMMA   451

Thus, the goal of the second part of the exercise is to employ techniques related to boundaryless and virtual organizations to reduce bureaucracy in a debate format, with one person arguing for why changes can be good, while the other person argues for why changes might be disruptive. The team will start by dividing into two subgroups and will work in these groups independently for about 10  minutes. One member will have the responsibility to identify alternative mechanisms that might be able to replace the current bureaucratic structure while still keeping all the same functions ‘in-house’ by creating a boundaryless organization. How can the organizations get the same results but with a different set of control systems? Another member will identify reasons it might be difficult to transition from a bureaucracy to the system you advocated. What are the potential sources of resistance to change? These two members should work together to arrive at a consensus for how bureaucracy might be minimized without damaging organizational productivity and efficiency. At the same time, the second group of two individuals will work on a different task. One member will consider how each organization can take on elements of a virtual organization as a way to become less ­ bureaucratic.

I­dentify elements of the organization that might be downsized or outsourced. Another member will identify why ‘going virtual’ might be a bad idea, looking to potential loss of control and poor information exchange as possible obstacles. These two members will arrive at a consensus for how the organization can be made as lean as possible without damaging organizational productivity and efficiency. Finally, all four members of the team will come together to arrive at a consensus for how to limit bureaucracy by either (1) using new systems that are consistent with a boundaryless organization or (2) using elements of a lean, virtual organization to strip off unnecessary bureaucratic layers. This final combination process should take about 10 minutes.

Debriefing After each group has come to a consensus for how to limit bureaucracy, the instructor will lead an all-class discussion in which each group will describe its eventual approach to minimizing bureaucracy in its organiz­ ation. Your instructor will provide additional insight into why it may be difficult to change a bureaucracy, as well as suggesting areas where bureaucracy can be effectively limited through either boundarylessness or virtuality.

ETHICAL DILEMMA ETHICAL CONCERNS OF DESKLESS WORKPLACES Once upon a time, students fresh from business schools couldn’t wait for that first cubicle to call home, mid-level managers aspired to an office of their own, and executives coveted the corner office on the top floor. These days, the walls are coming down. At online retailer Zappos, not even the CEO wants an office, and all 1,300 employees are welcome throughout the open spaces. Other firms like Google have followed the trend, giving rise to new workplace designs of public rooms with lounge areas and large, multiperson tables. According to Edward Danyo, manager of workplace strategy at pharmaceuticals firm GlaxoSmithKline, shared environments create great work gains, including what he estimates is a 45 per cent increase in the speed of decision making. But there are ethical concerns for the dismantling of the physical and mental organizational structure. Here are some questions for you to consider for managing employees in one of these workplaces of the future: ●

Where will confidential discussions take place? As a manager, you need to be able to address issues with your employees privately, and your employees likewise need

●

●

to feel welcome to meet with you and human resource professionals privately. In some contemporary workplace designs, ad hoc conference rooms address the need for separate gatherings. This may not be optimal if the walls are made of glass, if your employees will feel stigmatized when called into a meeting room with you or a human resources professional, or if your employees become reluctant to approach human resources staff with issues. As a manager, you will need to be sensitive to employees’ concerns. How can differences in personality traits be overcome? Just like in a school cafeteria, employees high in extroversion will be more comfortable building collaborative relationships without assigned workspaces, while highly introverted individuals may be uncomfortable without an established office structure where they can get to know others over time. Your input on team building will be even more important to keep your projects moving forward. How can personal privacy be maintained? Zappos gives employees personal lockers, asks employees to angle

452  15 Foundations of organization structure

laptop screens away from neighbours, and tries to make open spaces more private by encouraging ear buds to create a sound barrier between working employees. It may be best to think of the deskless office as being as public as, for instance, a library. You will need to communicate the company’s expectations and protocol for reporting violations to your employees and respond to their concerns. ●

●

How can you assure your clients of confidentiality? Even walled, soundproof rooms for virtual or live meetings may not provide the desired level of security for clients who need to know their business will stay on a need-toknow basis. As a manager, you will need to help create an environment in which clients can trust that their interactions with your employees will be secure. Where will electronic and paper files be stored, and how will access to them be limited? Cloud-based storage is common and paper files are at the lowest levels ever in

organizations, but security issues for each need to be considered in organizational design, and access needs to be assigned from the organizational chart. You will be responsible for knowing which of your employees has access to files in the cloud and physically. ●

How will expectations and accountabilities be enforced? In an environment without offices and sometimes without job titles, there is an even greater need for clearly assigned goals, roles and expectations. Open, collaborative structures may foster the diffusion of responsibility we discussed as problems of groups and teams in Chapters 9 and 10.

Sources: S. Henn, ‘“Serendipitous interaction” key to tech firms’ workplace design’, NPR, 13 March 2013, www.npr.org/blogs/alltechconsidered/ 2013/03/13/174195695/serendipitous-interaction-key-to-tech-firmsworkplace-design; H. El Nasser, ‘What office? Laptops are workspace’, USA Today, 6 June 2012, pp. 1B–2B; R. W. Huppke, ‘Thinking outside the cubicle’, Chicago Tribune, 29 October 2012, pp. 2–1, 2–3; ‘Inside the new deskless office’, Forbes, 16 July 2012, p. 34; and E. Maltby, ‘My space is our space’, Wall Street Journal, 21 May 2012, p. R9.

New demands on managers and organizations The shifting emphasis from vertical designs to horizontal designs to partnership designs has reshaped the roles of managers. The biggest change has been from having direct control over resources required for performance towards dependence on others over whom there is no direct control. Even with more dependence and less control under newer structural designs, managers are still responsible for performance outcomes. For a manager who is used to a traditional top-down approach, it is hard to let go of control. The late business guru Peter Drucker once noted that the problem with large company managers is that they are used to giving orders and not to working with a partner – a totally different proposition. A good example is provided by the transition of Strida, a UK-based company that sells lightweight foldable bicycles, from a functional design, vertically integrated manufacturer to a completely new form. It began when Strida received a large order from an Italian customer, willing to buy at a price that was below the cost of producing the bicycles in the UK. The CEO of the company at the time, Steedman Bass, immediately began investigating ways of making the organization more efficient. First, he decided to shut down the in-house production plant and identified a manufacturing partner in the Far East who could make the bike at lower cost. He used expert contractors to continue developing new bicycle models, to design the owner’s manual, to design the company’s website. He used various web-based software services to ensure smooth communication between the designers

CASE INCIDENT 1

and the manufacturer, to manage accounts, materials and documents. He then turned to a long-time vendor to take over the back-end operation of the company – including warehouse management, order fulfilment, inventory control, customer service, inbound container management and accounts generation. The company has low overheads and is now structured to ramp up and down quickly in response to market fluctuations. Bass focuses almost exclusively on managing the various relationships that make up the business. Bass had loved making his own bikes, and therefore the biggest barrier in making the transition was in his willingness to find, trust and hand over that responsibility to someone else that could do it more efficiently.

Questions 1. How would you describe the new organizational structure at Strida?

2. How did the role of CEO Steedman Bass change? 3. What new demands are these new organizational structures placing on managers?

4. How do you think the restructuring affected the firm’s original employees? Source: N. Anand and R. Daft (2007) ‘What is the right organization design’? Organizational Dynamics, 36, 4, pp. 329–44

ENDNOTEs   453

How have organizational structures changed? The following is taken from an article written by Stanley Klion and Donald Markstein in 1967. Organizational structure is essential to perform successfully any activity involving the efforts of numbers of people. It is formal recognition that achieving goals requires a sound dispersion of responsibilities among the management group. Simply stated, the implementation of an organization structure in a business entity involves logically grouping the spectrum of work functions to be performed and assigning them to individuals for execution in a manner designed to meet the entity’s objectives. Organization structure is near to the heart of the management process itself. The management process is a wheel which starts with planning and proceeds sequentially through organization, execution and control. Feedback leads to either continuing or changing the course of action in any phase of the cycle, such as (1) continuing the present plan, (2)  modifying the present plan, (3) improving the effectiveness of the execution effort with the present organization structure and resources or (4) assembling a new structure or team of people or new resources to do a better job of meeting the original or modified plan. Effective organization structure is essential to the proper functioning of the overall management process. These authors go on to propose the following principles of organization:

Objectives 1. The objectives of the enterprise and its component elements should be clearly defined and stated in writing. The organization should be kept simple and flexible.

Activities and grouping of activities 2. The responsibilities assigned to a position should be confined as far as possible to the performance of a single leading function.

3. Functions should be assigned to organizational units on the basis of homogeneity of objective to achieve most efficient and economic operation.

CASE INCIDENT 2

Authority 4. There should be clear lines of authority running from the top to the bottom of the organization, and accountability from bottom to top.

5. The responsibility and authority of each position should be clearly defined in writing.

6. Accountability should always be coupled with corresponding authority.

7. Authority to take or initiate actions should be delegated as close to the scene of action as possible.

8. The number of levels of authority should be kept to a minimum.

Relationships 9. There is a limit to the number of positions that can be effectively supervised by a single individual.

10.  Everyone in the organization should report to only one supervisor.

11. The accountability of higher authority for the acts of its subordinates is absolute.

Questions 1. How would you characterize the organizational structure that Klion and Markstein proposed using terms from this chapter?

2. Are these principles of organization still relevant today? Why or why not? What has changed?

3. Can you name any examples of organizations today that seem to follow these organization principles?

4. Would you respond favourably to working in this type of organization? Why or why not? Source: S. Klion and D. Markstein, ‘Organizational structure’, Journal of Accountancy, 123, 1 (1967), pp. 84–6. Copyright 1967. American Institute of Certified Public Accountants, Inc. All rights reserved. Used with permission.

ENDNOTES  1 L. Garicano and Y. Wu, ‘Knowledge, communication, and organizational capabilities’, Organization Science, September– October 2012, pp. 1382–97.

  6 C. Woodyard, ‘Toyota brass shakeup aims to give regions more control’, USA Today, 6 March 2013, www.usatoday.com/story/ money/cars/2013/03/06/toyotashakeup/1966489/.

  2 See, for instance, R. L. Daft, Organization Theory and Design, 10th edn, (Cincinnati, OH: South-Western Publishing, 2010).

  7 C. Hymowitz, ‘Managers suddenly have to answer to a crowd of bosses’, Wall Street Journal, 12 August 2003, p. B1.

  3 T. W. Malone, R. J. Laubacher and T. Johns, ‘The age of hyperspecialization’, Harvard Business Review, July–August 2011, pp. 56–65.

  8 See, for instance, ‘How hierarchy can hurt strategy execution’, Harvard Business Review, July–August 2010, pp. 74–5.

  4 J. G. Miller, ‘The real women’s issue: time’, Wall Street Journal, 9–10 March 2013, p. C3.   5 J. Schramm, ‘A cloud of workers’, HR Magazine, March 2013, p. 80.

  9 See, for instance, L. Urwick, The Elements of Administration (New York: Harper & Row, 1944), pp. 52–3; and J. H. Gittell, ‘Supervisory span, relational coordination, and flight departure performance: a reassessment of postbureaucracy theory’, Organization Science, July–August 2001, pp. 468–83.

454  15 Foundations of organization structure 10 F. A. Csascar, ‘Organizational structure as a determinant of performance: evidence from mutual funds,’ Strategic Manage­ ment Journal, June 2013, pp. 611–32. 11 B. Brown and S. D. Anthony, ‘How P&G tripled its innovation success rate’, Harvard Business Review, June 2011, pp. 64–72. 12 A. Leiponen and C. E. Helfat, ‘Location, decentralization, and knowledge sources for innovation’, Organization Science, 22, 3 (2011), pp. 641–58. 13 K. Parks, ‘HSBC unit charged in Argentine tax case’, Wall Street Journal, 19 March 2013, p. C2. 14 P. Hempel, Z.-X. Zhang and Y. Han, ‘Team empowerment and the organizational context: decentralization and the contrasting effects of formalization’, Journal of Management, March 2012, pp. 475–501. 15 H. Mintzberg, Structure in Fives: Designing Effective Organiza­ tions (Upper Saddle River, NJ: Prentice-Hall, 1983), p. 157. 16 A. Murray, ‘Built not to last’, Wall Street Journal, 18 March 2013, p. A11. 17 W. M. Bulkeley, ‘Back from the brink’, Wall Street Journal, 24 April 2006, pp. B1, B3. 18 L. R. Burns and D. R. Wholey, ‘Adoption and abandonment of matrix management programs: effects of organizational characteristics and interorganizational networks’, Academy of Management Journal, February 1993, pp. 106–38; J. R. Galbraith, Designing Matrix Organizations That Actually Work: How IBM, Procter & Gamble, and Others Design for Success (San Francisco: Jossey Bass, 2009); and E. Krell, ‘Managing the matrix’, HR Magazine, April 2011, pp. 69–71. 19 See, for instance, M. Bidwell, ‘Politics and firm boundaries: how organizational structure, group interests, and resources affect outsourcing’, Organization Science, November–December 2012, pp. 1622–42. 20 See, for instance, S. M. Davis and P. R. Lawrence, ‘Problems of matrix organization’, Harvard Business Review, May–June 1978, pp. 131–42; and T. Sy and S. Cote, ‘Emotional intelligence: a key ability to succeed in the matrix organization’, Journal of Management Development, 23, 5 (2004), pp. 437–55. 21 N. Anand and R. L. Daft, ‘What is the right organization design?’, Organizational Dynamics, 36, 4 (2007), pp. 329–44. 22 J. Bates, ‘Making movies and moving on’, Los Angeles Times, 19 January 1998, p. A1. 23 C. Dougherty, ‘Cuts at Porsche’s Finnish workshop’, New York Times, 4 April 2009, p. B3(L). 24 D. Dahl, ‘Want a job? Let the bidding begin’, Inc., March 2011, pp. 94–6. 25 J. Schramm, ‘At work in a virtual world’, HR Magazine, June 2010, p. 152. 26 C. B. Gibson and J. L. Gibbs, ‘Unpacking the concept of virtuality: the effects of geographic dispersion, electronic dependence, dynamic structure, and national diversity on team innovation’, Administrative Science Quarterly, 51, 3 (2006), pp. 451–95; H. M. Latapie and V. N. Tran, ‘Subculture formation, evolution, and conflict between regional teams in virtual organizations’, Business Review, Summer 2007, pp. 189–93; and S. Davenport and U. Daellenbach, ‘“Belonging” to a virtual research center: exploring the influence of social capital formation processes on member identification in a virtual organization’, British Journal of Management, 22, 1 (2011), pp. 54–76. 27 ‘GE: just your average everyday $60 billion family grocery store’, IndustryWeek, 2 May 1994, pp. 13–18.

28 See, for example, U. Wassmer, ‘Alliance portfolios: a review and research agenda’, Journal of Management, 36, 1 (2010), pp. 141–71; A. M. Hess and F. T. Rothaemel, ‘When are assets complementary? Star scientists, strategic alliances, and innovation in the pharmaceutical industry’, Strategic Management Journal, 32, 8 (2011), pp. 895–909; and J. A. Adegbesan and M. J. Higgins, ‘The intra-alliance division of value created through collaboration’, Strategic Management Journal, 32, 2 (2011), pp. 187–211. 29 Z. Yao, Z. Yang, G. Fisher, C. Ma and E. Fang, ‘Knowledge complementarity, knowledge absorption effectiveness, and new product performance: the exploration of international joint ventures in China’, International Business Review, February 2013, pp. 216–27. 30 S. Constable, ‘Google’s Motorola Ssarts layoffs’, Wall Street Journal, 8 March 2013), video broadcast with George Stahl, http://online.wsj.com/article/B5AAEF65–2F62–487EAE7EEDBD4E0D20F8.html#!B5AAEF65–2F62–487E-AE7EEDBD4E0D20F8; and R. Yu, ‘Google’s Motorola Mobility to cut additional 1,200 jobs’, USA Today, 8 March 2013), www. usatoday.com/story/tech/2013/03/08/googlesmotorola-mobility-to-cut-jobs/1973007/. 31 See J. P. Guthrie and D. K. Datta, ‘Dumb and dumber: the impact of downsizing on firm performance as moderated by industry conditions’, Organization Science, 19, 1 (2008), pp. 108–23; and K. P. De Meuse, T. J. Bergmann, P. A. Vanderheiden and C. E. Roraff, ‘New evidence regarding organizational downsizing and a firm’s financial performance: a long-term analysis’, Journal of Managerial Issues, 16, 2 (2004), pp. 155–77. 32 L. Alpert, ‘Can imported CEO fix Russian cars?’, Wall Street Journal, 20 March 2013, p. B1. 33 See, for example, C. O. Trevor and A. J. Nyberg, ‘Keeping your headcount when all about you are losing theirs: downsizing, voluntary turnover rates, and the moderating role of HR practices’, Academy of Management Journal, 51, 2 (2008), pp. 259–76; T. M. Probst, S. M. Stewart, M. L. Gruys and B. W. Tierney, ‘Productivity, counterproductivity and creativity: the ups and downs of job insecurity’, Journal of Occupational and Organizational Psychology, 80, 3 (2007), pp. 479–97; and C. P. Maertz, J. W. Wiley, C. LeRouge and M. A. Campion, ‘Downsizing effects on survivors: layoffs, offshoring, and outsourcing’, Industrial Relations, 49, 2 (2010), pp. 275–85. 34 C. D. Zatzick and R. D. Iverson, ‘High-involvement management and workforce reduction: competitive advantage or disadvantage?’, Academy of Management Journal, 49, 5 (2006), pp. 999–1015; A. Travaglione and B. Cross, ‘Diminishing the social network in organizations: does there need to be such a phenomenon as “survivor syndrome” after downsizing?’, Strategic Change, 15, 1 (2006), pp. 1–13; and J. D. Kammeyer-Mueller, H. Liao and R. D. Arvey, ‘Downsizing and organizational performance: a review of the literature from a stakeholder perspective’, Research in Personnel and Human Resources Management, 20 (2001), pp. 269–329. 35 T. Burns and G. M. Stalker, The Management of Innovation (London: Tavistock, 1961); and J. A. Courtright, G. T. Fairhurst and L. E. Rogers, ‘Interaction patterns in organic and mechanistic systems’, Academy of Management Journal, December 1989, pp. 773–802. 36 This analysis is referred to as a contingency approach to organization design. See, for instance, J. M. Pennings, ‘Structural contingency theory: a reappraisal’, in B. M. Staw and L. L. Cummings (eds), Research in Organizational Behavior, vol. 14

ENDNOTES   455 (Greenwich, CT: JAI Press, 1992), pp. 267–309; J. R. Hollenbeck, H. Moon, A. P. J. Ellis, B. J. West, D. R. Ilgen, L. Sheppard, C. O. L. H. Porter and J. A. Wagner III, ‘Structural contingency theory and individual differences: examination of external and internal person-team fit’, Journal of Applied Psychology, June 2002, pp. 599–606; and A. Drach-Zahavy and A. Freund, ‘Team effectiveness under stress: a structural contingency approach’, Journal of Organizational Behavior, 28, 4 (2007), pp. 423–50. 37 The strategy–structure thesis was originally proposed in A. D. Chandler, Jr, Strategy and Structure: Chapters in the History of the Industrial Enterprise (Cambridge, MA: MIT Press, 1962). For an updated analysis, see T. L. Amburgey and T. Dacin, ‘As the left foot follows the right? The dynamics of strategic and structural change’, Academy of Management Journal, December 1994, pp. 1427–52. 38 See R. E. Miles and C. C. Snow, Organizational Strategy, Struc­ ture, and Process (New York: McGraw-Hill, 1978); D. C. Galunic and K. M. Eisenhardt, ‘Renewing the strategy–structure–performance paradigm’, in B. M. Staw and L. L. Cummings (eds), Research in Organizational Behavior, vol. 16 (Greenwich, CT: JAI Press, 1994), pp. 215–55; and S. M. Toh, F. P. Morgeson and M. A. Campion, ‘Human resource configurations: investigating fit with the organizational context’, Journal of Applied Psychology, 93, 4 (2008), pp. 864–82. 39 M. Mesco, ‘Moleskine tests appetite for IPOs’, Wall Street Journal, 19 March 2013, p. B8. 40 See, for instance, P. M. Blau and R. A. Schoenherr, The Structure of Organizations (New York: Basic Books, 1971); D. S. Pugh, ‘The Aston program of research: retrospect and prospect’, in A. H. Van de Ven and W. F. Joyce (eds), Perspectives on Organization Design and Behavior (New York: Wiley, 1981), pp. 135–66; R. Z. Gooding and J. A. Wagner, III, ‘A meta-analytic review of the relationship between size and performance: the productivity and efficiency of organizations and their subunits’, Administrative Science Quarterly, December 1985, pp. 462–81; and A. C. Bluedorn, ‘Pilgrim’s progress: trends and convergence in research on organizational size and environments’, Journal of Management, Summer 1993, pp. 163–92. 41 See J. Woodward, Industrial Organization: Theory and Practice (London: Oxford University Press, 1965); C. Perrow, ‘A framework for the comparative analysis of organizations’, American Sociological Review, April 1967, pp. 194–208; J. D. Thompson, Organizations in Action (New York: McGraw-Hill, 1967); J. Hage and M. Aiken, ‘Routine technology, social structure, and organizational goals’, Administrative Science Quarterly, September 1969, pp. 366–77; C. C. Miller, W. H. Glick, Y. Wang and G. P. Huber, ‘Understanding technology-structure relationships: theory development and meta-analytic theory testing’, Academy of Management Journal, June 1991, pp. 370–99; and K. H. Roberts and M. Grabowski, ‘Organizations, technology, and structuring’, in S. R. Clegg, C. Hardy and W. R. Nord (eds),

Managing Organizations: Current Issues (Thousand Oaks, CA: Sage, 1999), pp. 159–71. 42 See F. E. Emery and E. Trist, ‘The causal texture of organizational environments’, Human Relations, February 1965, pp.  21–32; P. Lawrence and J.W. Lorsch, Organization and Environment: Managing Differentiation and Integration (Boston, MA: Harvard Business School, Division of Research, 1967); M. Yasai-Ardekani, ‘Structural adaptations to environments’, Academy of Management Review, January 1986, pp. 9–21; Bluedorn, ‘Pilgrim’s progress’; and M. Arndt and B. Bigelow, ‘Presenting structural innovation in an institutional environment: hospitals’ use of impression management’, Administrative Science Quar­ terly, September 2000, pp. 494–522. 43 G. G. Dess and D. W. Beard, ‘Dimensions of organizational task environments’, Administrative Science Quarterly, March 1984, pp. 52–73; E. A. Gerloff, N. K. Muir and W. D. Bodensteiner, ‘Three components of perceived environmental uncertainty: an exploratory analysis of the effects of aggregation’, Journal of Management, December 1991, pp. 749–68; and O. Shenkar, N. Aranya and T. Almor, ‘Construct dimensions in the contingency model: an analysis comparing metric and non-metric multivariate instruments’, Human Relations, May 1995, pp. 559–80. 44 C. S. Spell and T. J. Arnold, ‘A multi-level analysis of organ­ izational justice and climate, structure, and employee mental health’, Journal of Management, 33, 5 (2007), pp. 724–51; and M. L. Ambrose and M. Schminke, ‘Organization structure as a moderator of the relationship between procedural justice, interactional justice, perceived organizational support, and supervisory trust’, Journal of Applied Psychology, 88, 2 (2003), pp. 295–305. 45 See, for instance, Spell and Arnold, ‘A multi-level analysis of organizational justice climate, structure, and employee mental health’; J. D. Shaw and N. Gupta, ‘Job complexity, performance, and well-being: when does supplies-values fit matter?’, Personnel Psychology, 57, 4 (2004), 847–79; and C. Anderson and C. E. Brown, ‘The functions and dysfunctions of hierarchy’, Research in Organizational Behavior, 30 (2010), pp. 55–89. 46 See, for instance, B. Schneider, H. W. Goldstein and D. B. Smith, ‘The ASA framework: an update’, Personnel Psychology, 48 (Winter 1995), pp. 747–73. 47 J. B. Stewart, ‘A place to play for Google staff’, New York Times, 16 March 2013, p. B1. 48 See, for instance, B. K. Park, J. A. Choi, M. Koo, et al., ‘Culture, self, and preference structure: transitivity and context independence are violated more by interdependent people’, Social Cogni­ tion, February 2013, pp. 106–18. 49 J. Hassard, J. Morris and L. McCann, ‘“My brilliant career”? New organizational forms and changing managerial careers in Japan, the UK, and USA’, Journal of Management Studies, May 2012, pp. 571–99.

CHAPTER 16 Organizational culture Learning objectives After studying this chapter, you should be able to: 1 Describe the common characteristics of organizational culture. 2 Compare the functional and dysfunctional effects of organizational culture on people and the organization. 3 Identify the factors that create and sustain an organization’s culture. 4 Show how culture is transmitted to employees. 5 Demonstrate how an ethical culture can be created. 6 Describe a positive organizational culture. 7 Identify characteristics of a spiritual culture. 8 Show how national culture can affect the way organizational culture is transported to another country.

A culture of discipline is not a principle of business; it is a principle of greatness. Jim Collins, Good to Great and the Social Sectors

A CULTURE OUT OF THIS WORLD: MARS INC.

Orlin Wagner/AP/Press Association Images

At first glance, it doesn’t seem Mars Inc. would offer a positive organizational culture. Employers, managers and even the president punch time clocks, and being late will cost you 10 per cent of your daily pay. There are no stock options or pensions. There is no free lunch or comfy play area. There are few windows and the doors to the buildings are kept locked. Associates are called Martians. Yet Mars, the €30 billion multinational candy and pet food producer behind iconic brands M&M, Uncle Ben’s and Pedigree pet food, is one of Fortune’s ‘100 Best Companies to Work For’. Mars employees are loyal and longstanding. One family member or another of one 78-year-old associate has worked for Mars over the past six decades, and third-generation employees are not uncommon. Employees credit the organizational culture. One associate wrote upon his retirement after 33 years, ‘What a wonderful company to have worked for . . . associates became like family . . . made hundreds of friends there.’ Nearly everyone posting on Glassdoor, a website for employees to post reviews of their organizations, lists the ‘open’ organizational culture as the highlight of their Mars experience. Five principles are posted throughout the company’s 400 facilities in 73 countries and shape the Mars organizational culture: quality, responsibility, mutuality, efficiency and freedom. The principles get results. For example, the principle of quality has resulted in a quality rejection rate for M&M’s of only 2 per cent at one US factory. The principle of responsibility is practised internally as fairness for employees and 38 per cent female management, and externally as paid time off for volunteering and in a significant corporate commitment to develop food crops for Africa.

The principle of mutuality means teamwork. In addition to mentorships and reverse internships (in which younger associates teach older associates social media strategy), the ‘open office environment spurs collaboration and approachability’, one Mars Security Analyst observed. The principle of efficiency is a good counterbalance to the quirky atmosphere and explains the lack of luxury in the third-largest private company in the United States. President Paul S. Michaels says, ‘Does it add value for the consumer [for] Snickers bars to pay for marble floors and Picassos?’ Freedom is the underlying principle that frames the Mars organizational culture – and the company’s success. Associates are encouraged to innovate, experiment and seek help in a non-hierarchical environment. They find senior management ‘approachable’ and ‘available’. One associate in England cites ‘a lot of freedom and responsibility the minute you walk through the door’. Martian culture is a unique blend of secrecy and transparency. To the outside world, it offers locked doors, loyal employees who won’t divulge its secrets, and family owners who won’t give interviews. But within, the culture is fully transparent. Company sales, earnings, cash flow and site-­ efficiency data stream continuously across open-area screens, for instance, and bonuses are awarded on a team level. While no one would expect the organizational culture of people who call themselves Martians to be ordinary, the Mars experience seems exceptional. ‘This is a company you’re not embarrassed to tell people you work for,’ Michaels said, and employees agree.

Sources: A. Gajdosik, ‘Mars, Inc. and Partners offer genome data to the public’, Candy Industry, 1 May 2013, www.candyindustry.com/articles/85670-mars-incand-partners-offer-genomedata-to-the-public; D. A. Kaplan, ‘Inside Mars’, Fortune, 4 February 2013, pp. 72–82; Mars Inc. Press Release, ‘Mars, Incorporated and Partners confirm that genome data of africa’s “orphan crops” to be made public’, Wall Street Journal, 29 April 2013, www.marketwatch.com/story/marsincorporated-and-partners-confirm-that-genome-data-of-africas-orphan-crops-to-bemade-public-2013–04–29; and reviews for Mars Inc., Mars Chocolate North America, and Mars Petcare on Glassdoor, www.glassdoor.com. Accessed 5 June 2013.

458  16 Organizational culture

A strong organizational culture provides stability to an organization. But as Mars Inc. illustrates, many minute components make up organizational culture. For some organizations, culture can be a major barrier to change. In this chapter, we show that every organization has a culture that, depending on its strength, can have a significant influence on the attitudes and behaviours of organization members.

REFLECTION Describe the culture of the organization you work for, or one you are familiar with, in four or five words or phrases. For example, fun; entrepreneurial; exciting; innovative; boring; ‘do as you are told’; ‘take risks’; ‘people are important’.

What is organizational culture? 1 Describe the common characteristics of organizational culture. organizational culture A system of shared meaning held by members that distinguishes the organization from other organizations.

A number of years back, an executive was asked what he thought organizational culture meant. His answer was, ‘I can’t define it, but I know it when I see it.’ In this section, we propose a specific definition and review several related ideas to better understand the phenomenon of organizational culture.

A definition of organizational culture Organizational culture refers to a system of shared meaning held by members that distinguishes the organization from other organizations.1 Seven primary characteristics seem to capture the essence of an organization’s culture:2 1. Innovation and risk taking. The degree to which employees are encouraged to be innovative

and take risks. 2. Attention to detail. The degree to which employees are expected to exhibit precision, anal-

ysis and attention to detail. 3. Outcome orientation. The degree to which management focuses on results or outcomes

rather than on the techniques and processes used to achieve those outcomes. 4. People orientation. The degree to which management decisions take into consideration the

effect of outcomes on people within the organization. 5. Team orientation. The degree to which work activities are organized around teams rather

than individuals. 6. Aggressiveness. The degree to which people are aggressive and competitive rather than easy-

going. 7. Stability. The degree to which organizational activities emphasize maintaining the status

quo in contrast to growth. Each of these characteristics exists on a continuum from low to high. Appraising the organization on them, then, gives a composite picture of its culture and a basis for the shared understanding members have about the organization, how things are done in it and the way they are supposed to behave. Let’s identify where Mars Inc. may fall on each of these characteristics from the chapter opener. The Mars culture is likely to be high in innovation and risk-taking, high in attention to detail and high in team orientation. The company’s outcome orientation may be moderate because it is already a top industry performer, but it is consensus driven and promotes work–life balance. Its people orientation seems to be high, judging by the open culture, and, as Victoria Mars (greatgranddaughter of founder Frank Mars) tells associates, ‘You are valued for you.’

What is organizational culture?   459

The aggressiveness of Mars’ culture may be moderate to low because there are few employee complaints of competitiveness, though we’ve noted it is also secretive, so perhaps employees don’t discuss this element. Finally, it appears stable in terms of sustainability and seems moderately committed to growth. Table 16.1 contrasts how companies may be very different along these dimensions. Some research has conceptualized culture into four different types based on competing values:3 the collaborative and cohesive clan, the innovative and adaptable adhocracy, the controlled and consistent hierarchy, and the competitive and customer-focused market. A review of 94 studies found that job attitudes were especially positive in clan-based cultures, innovation was especially strong in market cultures, and financial performance was especially good in market cultures.4 Although the competing values framework received some support, the review authors noted that further theoretical work is needed to ensure it is consistent with the actual cultural values found in organizations.

Culture is a descriptive term Organizational culture is concerned with how employees perceive the characteristics of an organization’s culture, not with whether they like them. That is, it’s a descriptive term. This is important because it differentiates this concept from job satisfaction. Research on organizational culture has sought to measure how employees see their organization: Does it encourage teamwork? Does it reward innovation? Does it stifle initiative? In contrast, job satisfaction seeks to measure affective responses to the work environment. It’s concerned with how employees feel about the organization’s expectations, reward practices and the like. Although the two terms undoubtedly have overlapping characteristics, keep in mind that the term organizational culture is descriptive, whereas job satisfaction is evaluative.

Do organizations have uniform cultures? Organizational culture represents a common perception held by the organization’s members. This was made explicit when we defined culture as a system of shared meaning. We should Table 16.1  Contrasting organizational cultures Organization A

Organization B

This organization is a manufacturing firm. Managers are expected to fully document all decisions, and ‘good managers’ are those who can provide detailed data to support their recommendations. Creative decisions that incur significant change or risk are not encouraged. Because managers of failed projects are openly criticized and penalized, managers try not to implement ideas that deviate much from the status quo. One lower-level manager quoted an often-used phrase in the company: ‘If it ain’t broke, don’t fix it.’

This organization is also a manufacturing firm. Here, however, management encourages and rewards risk taking and change. Decisions based on intuition are valued as much as those that are well rationalized. Management prides itself on its history of experimenting with new technologies and its success in regularly introducing innovative products. Managers or employees who have a good idea are encouraged to ‘run with it’. And failures are treated as ‘learning experiences’. The company prides itself on being market-driven and rapidly responsive to the changing needs of its customers.

There are extensive rules and regulations in this firm that ­employees are required to follow. Managers supervise ­employees closely to ensure there are no deviations. Management is concerned with high productivity, regardless of the impact on employee morale or turnover. Work activities are designed around individuals. There are distinct departments and lines of authority, and employees are expected to minimize formal contact with other ­employees outside their functional area or line of command. Performance evaluations and rewards emphasize individual effort, although seniority tends to be the primary factor in the determination of pay rises and promotions.

There are few rules and regulations for employees to follow, and supervision is loose because management believes that its employees are hardworking and trustworthy. Management is concerned with high productivity, but believes that this comes through treating its people right. The company is proud of its reputation as being a good place to work. Job activities are designed around work teams, and team members are encouraged to interact with people across functions and authority levels. Employees talk positively about the competition between teams. Individuals and teams have goals, and bonuses are based on achievement of these outcomes. Employees are given considerable autonomy in choosing the means by which the goals are attained.

460  16 Organizational culture

expect, therefore, that individuals with different backgrounds or at different levels in the organization will tend to describe the organization’s culture in similar terms.5 Acknowledgment that organizational culture has common properties does not mean, however, that there cannot be subcultures within any given culture. Most large organizations have a dominant culture and numerous sets of subcultures.6 A dominant culture expresses the core values that are shared by a majority of the organization’s members. When we talk about an organization’s culture, we are referring to its dominant culture. It is this macro view of culture that gives an organization its distinct personality.7 Subcultures tend to develop in large organizations to reflect common problems, situations or experiences that members face. These subcultures are likely to be defined by department designations and geographical separation. The purchasing department, for example, can have a subculture that is uniquely shared by members of that department. It will include the core values of the dominant culture plus additional values unique to members of the purchasing department. Similarly, an office or unit of the organization that is physically separated from the organization’s main operations may take on a different personality. Again, the core values are essentially retained, but they are modified to reflect the separated unit’s distinct situation. If organizations had no dominant culture and were composed only of numerous subcultures, the value of organizational culture as an independent variable would be significantly lessened because there would be no uniform interpretation of what represented appropriate and inappropriate behaviour. It is the ‘shared meaning’ aspect of culture that makes it such a potent device for guiding and shaping behaviour. That’s what allows us to say, for example, that Microsoft’s culture values aggressiveness and risk taking8 and then to use that information to better understand the behaviour of Microsoft executives and employees. But we cannot ignore the reality that many organizations also have subcultures that can influence the behaviour of members.

dominant culture A culture that expresses the core values that are shared by a majority of the organization’s members. subcultures Minicultures within an organization, typically defined by department designations and geographical separation. core values The primary or dominant values that are accepted throughout the organization.

Strong versus weak cultures

Chris Dorney/Alamy Stock Photo

It is possible to differentiate between strong and weak cultures.9 If most employees (responding to management surveys) have the same opinions about the organization’s mission and values, the culture is strong; if opinions vary widely, the culture is weak.

Founded more than 180 years ago, the luxury retailer Harrods in London is the largest department store in Europe. Despite its size, Harrods is well-known for exacting and precise standards. These stem from a strong service culture. All of Harrods employees (more than 12,000 of them) know in no uncertain terms what is expected of them, and these expectations go a long way in shaping their behaviour.

What do cultures do?   461 strong culture A culture in which the core values are intensely held and widely shared.

In a strong culture, the organization’s core values are both intensely held and widely shared.10 The more members who accept the core values and the greater their commitment to those values is, the stronger the culture is. Consistent with this definition, a strong culture will have a great influence on the behaviour of its members because the high degree of sharedness and intensity creates an internal climate of high behavioural control. For example, the luxury retailer Harrods in London, one of the largest department stores in the world, has a strong service culture. All of Harrods employees (more than 12,000 of them) know in no uncertain terms what is expected of them, and these expectations go a long way in shaping their behaviour. One specific result of a strong culture should be lower employee turnover. A strong culture demonstrates high agreement among members about what the organization stands for. Such unanimity of purpose builds cohesiveness, loyalty and organizational commitment. These qualities, in turn, lessen employees’ propensity to leave the organization.11 One study found that the more employees agreed on customer orientation in a service organization, the higher the profitability of the business unit.12 Another study found that when team managers and team members disagreed about perceptions of organizational support, there were more negative moods among team members and the performance of teams was lower.13 These negative effects are especially strong when managers believe the organization provides more support than employees think it does.

Organizational culture According to research by the Chartered Institute of Personnel and Development (CIPD):

FACE THE FACTS

●

Organizational culture was a more important predictor of business performance than more traditional factors such as research and development, technology and quality.

Where strongly shared values were demonstrated, people were more likely to be satisfied, display higher levels of organizational commitment, have lower quit rates and lower levels of dissent or dissatisfaction over levels of pay.

●

Companies with strong shared cultures tended to perform better than those with weaker cultures.

Source: Vision and Values: Organizational Culture and Values as a Source of ­Competitive Advantage, Chartered Institute of Personnel and Development (CIPD).

●

Culture versus formalization A strong organizational culture increases behavioural consistency. In this sense, we should recognize that a strong culture can act as a substitute for formalization.14 In the previous chapter, we discussed how formalization’s rules and regulations act to regulate employee behaviour. High formalization in an organization creates predictability, orderliness and consistency. Our point here is that a strong culture achieves the same end without the need for written documentation. Therefore, we should view formalization and culture as two different roads to a common destination. The stronger an organization’s culture, the less management need be concerned with developing formal rules and regulations to guide employee behaviour. Those guides will be internalized in employees when they accept the organization’s culture.

What do cultures do? 2  Compare the functional and dysfunctional effects of organizational culture on people and the organization.

In this section, we will review the role culture performs and whether culture can be a liability for an organization.

The functions of culture First, it has a boundary-defining role; that is, it creates distinctions between one organization and others. Second, it conveys a sense of identity for organization members. Third, culture

462  16 Organizational culture

facilitates the generation of commitment to something larger than one’s individual self-­ interest. Fourth, it enhances the stability of the social system. Culture is the social glue that helps hold the organization together by providing appropriate standards for what employees should say and do. Finally, culture serves as a sense-making and control mechanism that guides and shapes the attitudes and behaviour of employees. It is this last function that is of particular interest to us.15 Culture defines the rules of the game. Today’s trend towards decentralized organizations makes culture more important than ever, but ironically it also makes establishing a strong culture more difficult. When formal authority and control systems are reduced, culture’s shared meaning can point everyone in the same direction. However, employees organized in teams may show greater allegiance to their team and its values than to the organization as a whole. In virtual organizations, the lack of frequent face-to-face contact makes establishing a common set of norms very difficult. Strong leadership that communicates frequently about common goals and priorities is especially important in innovative organizations.16 Individual–organization ‘fit’ – that is, whether the applicant’s or employee’s attitudes and behaviour are compatible with the culture – strongly influences who gets a job offer, a favourable performance review or a promotion. It’s no coincidence that Disney theme park employees appear almost universally neat, wholesome and with bright smiles. The company selects employees who will maintain that image. On the job, a strong culture supported by formal rules and regulations ensures employees will act in a relatively uniform and predictable way.

organizational climate The shared perceptions organizational members have about their organization and work environment.

Culture creates climate

AFP/Getty Images

If you’ve worked with someone whose positive attitude inspired you to do your best, or with a lacklustre team that drained your motivation, you’ve experienced the effects of climate. Organizational climate refers to the shared perceptions organizational members have about

The French videogame developer and publisher Ubisoft is known for developing popular video games franchises such as Assassin’s Creed, Far Cry, Prince of Persia and Just Dance. Imaginative employees who work in teams on challenging projects at Ubisoft’s creative studios around the world share the positive climate of creative collaboration that reflects the diversity of team members.

What do cultures do?   463

their organization and work environment.17 This aspect of culture is like team spirit at the organizational level. When everyone has the same general feelings about what’s important or how well things are working, the effect of these attitudes will be more than the sum of the individual parts. One meta-analysis found that across dozens of different samples, psychological climate was strongly related to individuals’ level of job satisfaction, involvement, commitment and motivation.18 A positive overall workplace climate has been linked to higher customer satisfaction and financial performance as well.19 Dozens of dimensions of climate have been studied, including innovation, creativity, communication, warmth and support, involvement, safety, justice, diversity and customer service.20 A person who encounters a positive climate for performance will think about doing a good job more often and will believe others support his or her success. Someone who encounters a positive climate for diversity will feel more comfortable collaborating with co-workers regardless of their demographic background. Climates can interact with one another to produce behaviour. For example, a positive climate for worker empowerment can lead to higher levels of performance in organizations that also have a climate for personal accountability.21 Climate also influences the habits people adopt. If the climate for safety is positive, everyone wears safety gear and follows safety procedures even if individually they wouldn’t normally think very often about being safe – indeed, many studies have shown that a positive safety climate decreases the number of documented injuries on the job.22

The ethical dimension of culture ethical work climate (EWC) The shared concept of right and wrong behaviour in the workplace that reflects the true values of the organization and shapes the ethical decision making of its members.

Organizational cultures are not neutral in their ethical orientation, even when they are not openly pursuing ethical goals. Over time, the ethical work climate (EWC), or the shared concept of right and wrong behaviour in that workplace, develops as part of the organizational climate. The ethical climate reflects the true values of the organization and shapes the ethical decision making of its members. Researchers have developed ethical climate theory (ECT) and the ethical climate index (ECI) to categorize and measure the ethical dimensions of organizational cultures.23 Of the nine identified climate categories, five are found to be most prevalent in organizations: instru­ mental, caring, independence, law and code and rules. Each explains the general mindset, expectations and values of the managers and employees in relation to their organization. For instance, in an instrumental ethical climate, managers may frame their decision making around the assumption that employees (and companies) are motivated by self-interest (egoistic). In a caring climate, conversely, managers may operate under the expectation that their decisions will positively affect the greatest number of stakeholders (employees, customers, suppliers) possible. Ethical climates of independence rely on each individual’s personal moral ideas to dictate his or her workplace behaviour. Law and code climates require managers and employees to use an external standardized moral compass such as a professional code of conduct for norms, while rules climates tend to operate by internal standardized expectations from, perhaps, an organizational policy manual. Organizations often progress through different categories as they move through their business life cycle. An organization’s ethical climate powerfully influences the way its individual members feel they should behave, so much so that researchers have been able to predict organizational outcomes from the climate categories.24 Instrumental climates are negatively associated with employee job satisfaction and organizational commitment, even though those climates appeal to self-interest (of the employee and the company). They are positively associated with ­turnover intentions, workplace bullying and deviant behaviour. Caring and rules climates have a positive association with job satisfaction. Caring, independence, rules and law and code climates also reduce employee turnover intentions, workplace bullying and d ­ ysfunctional behaviour. Studies of ethical climates and workplace outcomes suggest that some climate categories are likely to be found in certain organizations. Industries with exacting standards such as

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engineering, accounting and law tend to have rules or a law and code climate. Industries that thrive on competitiveness such as financial trading often have an instrumental ethical climate. Industries with missions of benevolence are likely to have a caring climate, even if they are for profit as in an environmental protection firm. Research is exploring why organizations tend to fall into certain climate categories by industry, especially successful organizations. We cannot conclude that instrumental climates are always bad or that caring climates are always good. Instrumental cultures may foster the individual success their companies need to thrive, for example, and they may help underperformers to recognize their self-interest is better served elsewhere. Managers in caring cultures may be thwarted from making the best decisions when only choices that serve the greatest number of employees are acceptable.25 The ECI is one new way researchers are seeking to understand the context of ethical drivers in organizations. By measuring the collective levels of moral sensitivity, judgement, motivation and character of our organizations, we may be able to judge the strength of the influence our ethical climates have on us.26 Although ECT was first introduced more than 25 years ago, researchers have recently been studying ethics in organizations more closely to determine not only how ethical climates behave (through ECI, for instance, introduced in 2010) but also how they might be fostered, even changed.27 Eventually, we will be able to provide leaders with clear blueprints for designing effective ethical climates to improve the lives of an organization’s members.

Culture and innovation The most innovative companies are often characterized by their open, unconventional, collaborative, vision-driven, accelerating cultures.28 Startup firms frequently have innovative cultures by definition because they are usually small, agile and focused on solving problems in order to survive and grow. Consider digital music leader Echo Nest. This startup has always been unconventional, flexible and open, hosting music app ‘hack’ days and permitting outsiders to use its unique technology for non-commercial experimentation.29 At the other end of the startup spectrum, consider 30-year-old Intuit, one of the World’s 100 Most Innovative Companies according to Forbes. Intuit employees attend workshops to teach them how to think creatively . . . and unconventionally. Sessions have led to managers talking through puppets and holding bake sales to sell prototype apps with their cupcakes. The culture stresses open accountability. ‘I saw one senior guy whose idea they’d been working on for nine months get dis[ap]proved in a day because someone had a better way. He got up in front of everyone and said, “This is my bad. I should have checked my hypothesis earlier,”’ said an admiring Eric Ries, author of The Lean Startup. A consultant for entrepreneurs, Ries considers the older software company equally innovative because of its culture. Alexion Pharmaceuticals is also one of Forbes’ Most Innovative and, like Intuit, it has been in operation long past the usual innovation life-cycle stage. Unlike Intuit, though, the maker of life-saving medicines is not known for management shenanigans. The key to its continuing innovation is a culture of caring, which drives it to develop medicines that save victims of rare diseases, even when the patients affected are few, the cost of development is prohibitively high and the probability of success is low.30

Culture as an asset As we have discussed, organizational culture can provide a positive ethical environment and foster innovation. Culture can also significantly contribute to an organization’s bottom line in many ways. ChildNet is a nonprofit child welfare agency whose organizational culture was described as ‘grim’ from the time one of its foster children disappeared in 2000, through to 2007 when the CEO was fired amid allegations of fraud and forgery. ‘We didn’t know if we would have jobs or who would take over. It was a very grim situation,’ employee Maggie Tilelli said. However, after intense turnaround efforts aimed at changing the organizational culture, ChildNet

What do cultures do?   465

became a top-ranked agency within four years and Workforce Management’s Optima award winner for General Excellence in 2012. President and CEO Emilio Benitez, who took charge in 2008, effected the transformation by changing the executive staff, employing new technology to support caseworkers in the field and managers at headquarters, acknowledging the stress employees and managers felt by establishing an employee recognition programme, and creating cross-departmental roundtables (work groups) for creative problem-solving. The round­ tables have been able to find solutions to difficult client cases, resulting in better placement of foster children into permanent homes. ‘From a business perspective, [the new problem-solving approach] was a tremendous cost saving,’ Benitez said. ‘But at the end of the day, it’s about the families we serve.’31 While ChildNet demonstrates how an organizational culture can positively affect the bottom line, Dish Network illustrates the elusiveness of matching a particular culture to an industry or organization. By every measure, Dish Network is a business success story – it is the second-largest US satellite TV provider, and it has made founder Charlie Ergen one of the richest men in the world. Yet Dish was recently ranked as the worst US company to work for, and employees say the fault is the micromanaging culture Ergen created and enforces. Employees describe arduous mandatory overtime, fingerprint scanners to record work hours to the minute, public berating (most notably from Ergen), management condescension and distrust, quarterly ‘bloodbath’ layoffs, and no working from home. One employee advised another, ‘You’re part of a poisonous environment . . . go find a job where you can use your talents for good rather than evil.’ Many employees do just that, but Dish thrives anyway, regularly exceeding its quarterly earnings estimates. However, its growth in subscribers has levelled out in the past several years, and even Ergen acknowledges, ‘We’re a one-trick pony’ with satellite TV as the only product.32 At ChildNet, positive changes to the organization’s performance have been clearly attributed to the transformation of its organizational culture. Dish, on the other hand, may have succeeded despite its culture. Ergen is a clever entrepreneur, but the company has only 12 per cent of the total US television provider market.33 We can only wonder how much more successful it could be if it reformed its toxic culture. There are many more cases of business success stories due to excellent organizational cultures than there are of success stories despite bad cultures, and almost no success stories because of bad ones.

Culture as a liability Culture can enhance organizational commitment and increase the consistency of employee behaviour, which clearly brings benefits to an organization. Culture is valuable to employees too, because it spells out how things are done and what’s important. But we shouldn’t ignore the potentially dysfunctional aspects of culture, especially a strong one, on an organization’s effectiveness. Hewlett-Packard, once known as a premier computer manufacturer, has been rapidly losing market share and profits as the dysfunction of its top management team has trickled down, leaving employees disengaged, uncreative, unappreciated and polarized.34

Institutionalization institutionalization A condition that occurs when an organization takes on a life of its own, apart from any of its members, and acquires immortality.

When an organization undergoes institutionalization and becomes institutionalized – that is, it is valued for itself and not for the goods or services it produces – it takes on a life of its own, apart from its founders or members.35 Institutionalized organizations often don’t go out of business even if the original goals are no longer relevant. For example, Nokia’s origins date back to 1865 when an engineer, Fredrik Idestam, established a mill in south-western Finland and began manufacturing paper. Today, Nokia bears little resemblance to its past, yet continues to be an important business. Acceptable modes of behaviour become largely self-evident to members, and although this isn’t entirely negative, it does mean behaviours and habits that should be questioned and analysed become taken for granted, which can stifle innovation and make maintaining the organization’s culture an end in itself.

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Barriers to change Culture is a liability when the shared values don’t agree with those that further the organiz­ ation’s effectiveness. This is most likely when an organization’s environment is undergoing rapid change, and its entrenched culture may no longer be appropriate.36 Consistency of behaviour, an asset in a stable environment, may then burden the organization and make it difficult to respond to changes. This helps to explain the challenges that executives at organizations like Marks & Spencer, Lloyds and Yahoo! have had in recent years in adapting to upheavals in their environment. These organizations have strong cultures that worked well for them in the past. But these strong cultures become barriers to change when ‘business as usual’ is no longer effective.

Barriers to diversity Hiring new employees who, because of age, gender, culture, disability or other differences, are not like the majority of the organization’s members creates a paradox.37 Management wants new employees to accept the organization’s core cultural values. Otherwise, these employees are unlikely to fit in or be accepted. But at the same time, management wants to openly acknowledge and demonstrate support for the differences that these employees bring to the workplace. Strong cultures put considerable pressure on employees to conform. They limit the range of values and styles that are acceptable. In some instances a strong culture that condones prejudice can even undermine formal corporate diversity policies.38 Organizations seek out and hire diverse individuals because of the alternative strengths these people bring to the workplace. Yet these diverse behaviours and strengths are likely to diminish in strong cultures as people attempt to fit in. Strong cultures, therefore, can be liabilities when they effectively eliminate the unique strengths that people of different backgrounds bring to the organization. Moreover, strong cultures can also be liabilities when they support institutional bias or become insensitive to people who are different.

Barriers to acquisitions and mergers Historically, the key factors that management looked at in making acquisition or merger decisions were related to financial advantages or product synergy. In recent years, cultural compatibility has become the primary concern.39 While a favourable financial statement or product line may be the initial attraction of an acquisition candidate, whether the acquisition actually works seems to have more to do with how well the two organizations’ cultures match up. A survey by consulting firm A. T. Kearney revealed that 58 per cent of mergers failed to reach their financial goals.40 The primary cause of failure is conflicting organizational cultures. As one expert commented, ‘Mergers have an unusually high failure rate, and it’s always because of people issues.’ For instance, two years after the much heralded merger between the German carmaker Daimler-Benz and the American firm Chrysler, the company had experienced a mass departure of its American talents, an ongoing culture clash, massive financial losses and public derision. Vehicle sales analyst Maryann Keller noted on this merger, ‘. . . merging corporate culture is the biggest uncertainty. When it comes to the culture of these two companies, they are oil and water.’41 Organizational culture differences can also endure for a long period of time after a merger. Finnish crane producer Kone acquired Norwegian Wisbech Refsum in 1973, yet traces of cultural differences and identities still persisted at the end of the 1990s.42

Creating and sustaining culture 3  Identify the factors that create and sustain an organization’s culture.

An organization’s culture doesn’t pop out of thin air, and once established, it rarely fades away. What influences the creation of a culture? What reinforces and sustains it once in place?

How a culture begins An organization’s current customs, traditions and general way of doing things are largely due to what it has done before and the degree of success it has had with those endeavours. This leads us to the ultimate source of an organization’s culture: its founders.43

Jim Spellman/Getty Images

Creating and sustaining culture   467

Italian fashion designer Roberto Cavalli single-handedly transformed a handpainted knits business into one of the world’s most famous fashion brands. Cavalli is the source and powerful shaper of the company’s culture. Mr Cavalli answers to no one. ‘I’m used to always deciding everything myself,’ the designer says. ‘It’s a blessing, but also a terrible defect.’45

The founders of an organization traditionally have a major impact on that organization’s early culture. They have a vision of what the organiz­ ation should be. They are unconstrained by previous customs or ideologies. The small size that typically characterizes new organizations further facilitates the founders’ imposition of their vision on all organizational members. Culture creation occurs in three ways.44 First, founders hire and keep only employees who think and feel the same way they do. Second, they indoctrinate and socialize these employees to their way of thinking and feeling. And finally, the founders’ own behaviour acts as a role model that encourages employees to identify with them and thereby internalize their beliefs, values and assumptions. When the organization succeeds, the founders’ vision becomes seen as a primary determinant of that success. At this point, the founders’ entire personality becomes embedded in the culture of the organization. The culture at Hyundai, the giant Korean conglomerate, is largely a reflection of its founder Chung Ju Yung. Hyundai’s fierce, competitive style and its disciplined, authoritarian nature are the same characteristics often used to describe Chung. Other examples of founders who have had an immeasurable impact on their organization’s culture would include Bill Gates at Microsoft, Ingvar Kamprad at IKEA and Richard Branson at the Virgin Group.

Keeping a culture alive

Once a culture is in place, there are practices within the organization that act to maintain it by giving employees a set of similar experiences.46 For example, many of the human resource practices we discuss in the next chapter reinforce the organization’s culture. The selection process, performance evaluation criteria, training and development activities and promotion procedures ensure that those hired fit in with the culture, reward those who support it and penalize (and even expel) those who challenge it. Three forces play a particularly important part in sustaining a culture: selection practices, the actions of top management and socialization methods. Let’s take a closer look at each.

Selection The explicit goal of the selection process is to identify and hire individuals who have the knowledge, skills and abilities to perform the jobs within the organization successfully. Typically, more than one candidate will be identified who meets any given job’s requirements. When that point is reached, it would be naive to ignore the fact that the final decision as to who is hired will be significantly influenced by the decision maker’s judgement of how well the candidates will fit into the organization. This attempt to ensure a proper match, whether purposely or inadvertently, results in the hiring of people who have values essentially consistent with those of the organization, or at least a good portion of those values.47 In addition, the selection process provides information to applicants about the organization. Candidates learn about the organization and, if they perceive a conflict between their values and those of the organization, they can self-select themselves out of the applicant pool. Selection, therefore, becomes a two-way street, allowing employer or applicant to abrogate a marriage if there appears to be a mismatch. In this way, the selection process sustains an organization’s culture by selecting out those individuals who might attack or undermine its core values. For instance, W. L. Gore & Associates prides itself on its democratic culture and teamwork. There are no job titles at Gore, nor bosses nor chains of command. All work is done in teams. In Gore’s selection process, teams of employees put job applicants through extensive interviews to ensure that candidates who can’t deal with the level of uncertainty, flexibility and teamwork that employees have to deal with in Gore plants are selected out.48

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EMPLOYABILITY AND ORGANIZATIONAL CULTURE The point has been made in this chapter that organizations will seek to hire individuals who ‘fit’ the firm’s culture. Indeed, in many hiring situations the decision may very well be based on this criteria alone because the final candidates knowledge, skills and abilities are likely to be similar. So it’s imperative that job candidates are aware of the firm’s culture when applying and can demonstrate how they ‘fit’. Forbes magazine provides some tips on how to do this in the cover letter: Your first step should be spending time getting to know the company’s culture. Think of getting to know a company like getting to know a person – what is he or she like? Quirky? Serious? Snarky? Refined? Start by looking on the company’s website. The content is likely written by members of the team and therefore offers the best insight into the company’s personality. Be sure to also take a deep dive into the company’s blog, Twitter and Facebook accounts, as well as any other social media platforms that showcase the brand’s style. This voice, this personality, is what you’re going to want to use when you’re drafting your cover letter. Write as if you were having a real-life conversation with the hiring

manager, demonstrating that you get how things work there and can connect with the staff on a human level. For example, is the company all business, all the time? Get straight to your accomplishments, rather than waxing poetic about how much you love the company. Applying to a public relations agency? Be snappy and creative, and mention how much you loved a recent cover story on one of its clients. Is the company anything but ordinary? Don’t be afraid to think outside the traditional cover letter format. Try playing up the interests and parts of your personality that would resonate most with the company. If you read that the company frequently does team lunches, mention your foodie side – or even serve up a few restaurant suggestions. If you’re applying to a startup that’s immensely proud of its football league, mentioning your love of team sports will dually show your attitude as a team player and possibly get you recruited to next season’s team. Source: Adapted from The Muse, ‘How to show you get the company culture in your cover letter’, Forbes, 9 January 2014, see http://www.forbes.com/sites/ dailymuse/2014/01/09/how-to-show-you-get-the-company-culture-in-yourcover-letter/

Top management The actions of top management also have a major impact on the organization’s culture.49 Through what they say and how they behave, senior executives establish norms that filter down through the organization as to whether risk taking is desirable; how much freedom managers should give their employees; what is appropriate dress; what actions will pay off in terms of pay rises, promotions and other rewards; and the like. For example, Ingvar Kamprad, the founder of the flat-pack furniture manufacturer and retailer IKEA avoids wearing suits, flies economy class and frequents cheap restaurants. He has been quoted as saying that his luxuries are the occasional nice cravat and Swedish fish roe. He also claims to furnish his home mostly with his own IKEA products. Does Kamprad need to be so thrifty? No. His wealth is estimated to be around €25 billion. But the man prefers a modest personal lifestyle, and he prefers the same for his company. By acting as a role model for frugality, employees at IKEA have learned to follow his example.50

‘People socialize themselves’ This statement is true to a significant degree. Although we generally think of socialization as the process in which a person is shaped by his environment – and indeed that is the major focus of socialization research – more evidence is accumulating that many people socialize themselves, or at least substantially mould their socialization experiences. Research has shown that people with a proactive personality are much better at learning the ropes than are newcomers. (As we noted in Chapter 4, people with a proactive personality identify opportunities, show initiative and take action.) That’s because they are more likely to ask questions, seek out help

MYTH OR SCIENCE? and solicit feedback – in short, they learn more because they seek out more information and feedback. Research indicates that individuals with a proactive ­personality are also better at networking when they join an organization, and achieve a closer fit with the culture of their organizations – in short, they build their own ‘social capital’. As a result of being more effectively socialized into the organization, proactive people tend to like their jobs more, perform them better and show less propensity to quit. Proactive people, it seems, do a lot to socialize themselves into the culture of an organization.

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None of this is meant to deny that socialization matters. The point is that people are not passive actors in being socialized. It may well be that how well someone is socialized into a new culture depends more on her personality than anything else.

Sources: T. A. Lambert, L. T. Eby and M. P. Reeves, ‘Predictors of networking intensity and network quality among white-collar job seekers’, Journal of Career Development, June 2006, pp. 351–65; and J. A. Thompson, ‘Proactive personality and job performance: a social capital perspective’, Journal of Applied Psychology, September 2005, pp. 1011–17.

Socialization

socialization A process that adapts employees to the organization’s culture.

prearrival stage The period of learning in the socialisation process that occurs before a new employee joins the organization. encounter stage The stage in the socialization process in which a new employee sees what the organization is really like and confronts the possibility that expectations and reality may diverge.

No matter how good a job the organization does in recruiting and selection, new employees are not fully indoctrinated in the organization’s culture. Because they are unfamiliar with the organization’s culture, new employees are potentially likely to disturb the beliefs and customs that are in place. The organization will, therefore, want to help new employees adapt to its culture. This adaptation process is called socialization.51 At the Greek swimming pool manufacturer, Piscines Ideales, new employees are welcomed by the CEO himself, and receive a welcome book that includes the story of the company, pictures of colleagues and descriptions of company practices and policies. They are also given the CEO’s mobile phone number as soon as they are recruited, and they learn the company’s basic values: respect, camaraderie, teamwork, pride, focus on quality and learning and personal development.52 Clear Channel Communications, Facebook, Google and other companies are adopting fresh onboarding (new hire) procedures, including assigning ‘peer coaches’, holding socializing events, personalizing orientation programmes and giving out immediate work assignments. ‘When we can stress the personal identity of people, and let them bring more of themselves at work, they are more satisfied with their job and have better results,’ researcher Francesca Gino of Harvard said.53 Socialization can be conceptualized as a process made up of three stages: prearrival, encounter and metamorphosis.54 This process, shown in Figure 16.1, has an impact on the new employee’s work productivity, commitment to the organization’s objectives and eventual decision to stay with the organization. The prearrival stage recognizes that each individual arrives with a set of values, attitudes and expectations about both the work and the organization. One major purpose of a business school, for example, is to socialize business students to the attitudes and behaviours business firms want. Newcomers to high-profile organizations with a strong market position will make their own assumptions about what it must be like to work there.55 Most new recruits will expect Nike to be dynamic and exciting, a prestigious law firm to be high in pressure and rewards, and the military to require both discipline and courage. No matter how well managers think they can socialize newcomers, however, the most important predictor of future behaviour is past behaviour. What people know before they join the organization, and how proactive their personality is, are critical predictors of how well they adjust to a new culture.56 One way to capitalize on prehire characteristics in socialization is to use the selection process to inform prospective employees about the organization as a whole. We’ve also seen how the selection process ensures the inclusion of the ‘right type’ – those who will fit in. On entry into the organization, the new member enters the encounter stage and confronts the possibility that expectations – about the job, co-workers, the boss and the organization

Socialization process

Outcomes Productivity

Prearrival

Encounter

Metamorphosis

Commitment Turnover

Figure 16.1  A socialization model

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metamorphosis stage The stage in the socialization process in which a new employee changes and adjusts to the job, work group, and organization.

in general – may differ from reality. If expectations were fairly accurate, the encounter stage merely cements earlier perceptions. However, this is often not the case. At the extreme, a new member may become disillusioned enough to resign. Proper recruiting and selection should significantly reduce that outcome, along with encouraging friendship ties in the organization – newcomers are more committed when friends and co-workers help them ‘learn the ropes’.57 Finally, to work out any problems discovered during the encounter stage, the new member changes or goes through the metamorphosis stage. The entry socialization options presented below are alternatives designed to bring about the desired metamorphosis: ●

●

●

●

●

Formal vs. informal: The more a new employee is segregated from the ongoing work setting and differentiated in some way to make explicit his or her newcomer’s role, the more formal socialization is. Specific orientation and training programmes are examples. Informal socialization puts the new employee directly into the job, with little or no special attention. Individual vs. collective: New members can be socialized individually. This describes how it’s done in many professional offices. They can also be grouped together and processed through an identical set of experiences, as in military boot camp. Fixed vs. variable: This refers to the time schedule in which newcomers make the transition from outsider to insider. A fixed schedule establishes standardized stages of transition. This characterizes rotational training programmes. It also includes probationary periods, such as the 8- to 10-year ‘associate’ status used by accounting and law firms before deciding on whether or not a candidate is made a partner. Variable schedules give no advance notice of their transition timetable. Variable schedules describe the typical promotion system, in which one is not advanced to the next stage until one is ‘ready’. Serial vs. random: Serial socialization is characterized by the use of role models who train and encourage the newcomer. Apprenticeship and mentoring programmes are examples. In random socialization, role models are deliberately withheld. New employees are left on their own to figure things out. Investiture vs. divestiture: Investiture socialization assumes that the newcomer’s qualities and qualifications are the necessary ingredients for job success, so these qualities and qualifications are confirmed and supported. Divestiture socialization tries to strip away certain characteristics of the recruit.58

Most research suggests there are two major ‘bundles’ of socialization practices. The more management relies on formal, collective, sequential, fixed and serial socialization programmes and emphasizes divestiture, the more likely newcomers’ differences will be stripped away and replaced by standardized predictable behaviours. These institutional practices are common in police departments, fire departments and other organizations that value rule following and order. Programmes that are informal, individual, random, variable and disjunctive and that emphasize investiture are more likely to give newcomers an innovative sense of their role and methods of working. Creative fields, such as research and development, advertising and filmmaking, rely on these individual practices. Most research suggests high levels of institutional practices encourage person–organization fit and high levels of commitment, whereas individual practices produce more role innovation.59 The three-part entry socialization process is complete when new members have internalized and accepted the norms of the organization and their work group, are confident in their competence and feel trusted and valued by their peers. They understand the system – not only their own tasks but the rules, procedures and informally accepted practices as well. Finally, they know what is expected of them and what criteria will be used to measure and evaluate their work. As Figure 16.1 showed, successful metamorphosis should have a positive impact on new employees’ productivity and their commitment to the organization and reduce their propensity to leave the organization. Researchers have begun to examine how employee attitudes change during socialization by measuring at several points over the first few months. One study has documented patterns of ‘honeymoons’ and ‘hangovers’ for new workers, showing that the period of initial adjustment

How employees learn culture   471

Philosophy of organization’s founders

Top management Selection criteria

Organization culture Socialization

Figure 16.2  How organization cultures form

is often marked by decreases in job satisfaction as their idealized hopes come into contact with the reality of organizational life.60 Other research suggests that role conflict and role overload for newcomers rise over time and that workers with the largest increases in these role problems experience the largest decreases in commitment and satisfaction.61 It may be that the initial adjustment period for newcomers presents increasing demands and difficulties, at least in the short term.

Summary: how cultures form Figure 16.2 summarizes how an organization’s culture is established and sustained. The original culture is derived from the founder’s philosophy. This, in turn, strongly influences the criteria used in hiring. The actions of the current top management set the general climate of what is acceptable behaviour and what is not. How employees are to be socialized will depend both on the degree of success achieved in matching new employees’ values to those of the organiz­ ation’s in the selection process and on top management’s preference for socialization methods.

How employees learn culture 4  Show how culture is transmitted to employees.

Culture is transmitted to employees in a number of forms, the most potent being stories, rituals, material symbols and language.

Stories During the days when Henry Ford II was chairman of the Ford Motor Co., you would have been hard pressed to find a manager who hadn’t heard the story about Mr Ford reminding his executives, when they got too arrogant, that ‘it’s my name that’s on the building’. The message was clear: Henry Ford II ran the company. Hayley Clark, working at the car rental company Hertz at Prestwick Airport in Scotland, took pity on an elderly Australian couple who brought their car back before flying on to Dublin. She noticed they were still at the airport four hours later. They were flying the next day and had been unable to find accommodation because visitors to the nearby Open Golf Championship had taken every available space. So Ms Clark took them home, put them up for the night, then drove them to the airport for their 5 a.m. check-in, all before starting her 8 a.m. shift. The story is used within Hertz as an illustration of exceptional company service.62 Stories such as these circulate through many organizations. They typically contain a narrative of events about the organization’s founders, rule breaking, rags-to-riches successes, reductions in the workforce, relocation of employees, reactions to past mistakes and organizational coping.63 These stories anchor the present in the past and provide explanations and legitimacy for current practices. Employees also create their own narratives about how they came to either fit or not fit with the organization during the process of socialization, including first days on the job, early interactions with others and first impressions of organizational life.64

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Rituals rituals Repetitive sequences of activities that express and reinforce the key values of the organization, which goals are most important, which people are important and which are expendable.

Rituals are repetitive sequences of activities that express and reinforce the key values of the

organization – what goals are most important, which people are important and which people are expendable.65 One of the better-known corporate rituals is Wal-Mart’s company chant. Begun by the company’s founder, Sam Walton, as a way to motivate and unite his workforce, ‘Gimme a W, gimme an A, gimme an L, gimme a squiggle, give me an M, A, R, T!’ has become a company ritual that bonds Wal-Mart workers and reinforces Sam Walton’s belief in the importance of his employees to the company’s success.66 Other companies have non-­ traditional rituals to help support the values of their cultures. For example, Kimpton Hotels & Restaurants maintains its customer-oriented culture with traditions like a Housekeeping Olympics that includes blindfolded bedmaking and vacuum races.67 At marketing firm United Entertainment Group, employees work unusual hours a few times a year, arriving in the late afternoon and working until early morning. CEO Jarrod Moss does this to spark creativity. He says, ‘You mess with somebody’s internal clock, and some interesting ideas come out.’68

Symbols material symbols What conveys to employees who is important, the degree of egalitarianism top management desires and the kinds of behaviour that are appropriate.

The layout of corporate headquarters, the types of automobiles top executives are given, and the presence or absence of corporate aircraft are a few examples of material symbols. Others include the size of offices, the elegance of furnishings, executive perks and attire.69 These material symbols convey to employees who is important, the degree of egalitarianism desired by top management and the kinds of behaviour (for example, risk taking, conservative, authoritarian, participative, individualistic, social) that are appropriate.

Language Many organizations and sub-units within them use language to help members identify with the culture, attest to their acceptance of it and help preserve it. Unique terms describe equipment, officers, key individuals, suppliers, customers or products that relate to the business. New employees may at first be overwhelmed by acronyms and jargon, that, once assimilated, act as a common denominator to unite members of a given culture or subculture.

Creating an ethical organizational culture 5  Demonstrate how an ethical culture can be created.

The content and strength of a culture influence an organization’s ethical climate and the ethical behaviour of its members. An organizational culture most likely to shape high ethical standards is one that’s high in risk tolerance, low to moderate in aggressiveness and focuses on means as well as outcomes.70 This type of culture takes a long-term perspective and balances the rights of multiple stakeholders, including employees, shareholders and the community. Managers are supported for taking risks and innovating, discouraged from engaging in unbridled competition and guided to heed not just what goals are achieved but also how. A strong organizational culture will exert more influence on employees than a weak one. If the culture is strong and supports high ethical standards, it should have a very powerful and positive influence on employee behaviour. An often cited example is that of Johnson & Johnson. When poisoned Tylenol (a Johnson & Johnson product) was found on store shelves, employees at Johnson & Johnson across the United States independently pulled the product from these stores before management had even issued a statement concerning the tamperings. No one had to tell these individuals what was morally right; they knew what Johnson & Johnson would expect them to do. On the other hand, examples of organizations that have failed to establish proper codes of ethical behaviour can be found in the media nearly every day. Some actively deceive customers or clients. Others produce products that harm consumers or the environment, or they harass or discriminate against certain groups of employees. Others are more subtle and cover up or fail to report wrongdoing. The negative consequences of a

Majorie Kamys Cotera / Bob Daemmrich Photography / Alamy Stock Photo

Creating an ethical organizational culture   473

An article in the New York Times claimed the culture at the e-commerce giant Amazon was one in which employees regularly weep, criticize and sabotage others, work long and late, and where serious health and family issues are ignored. Claims the Chief Executive, Jeff Bezos, vehemently denies.71

systematic culture of unethical behaviour can be severe and include customer boycotts, fines, lawsuits and government regulation of an organization’s practices. What can management do to create a more ethical culture? They can adhere to the following principles:72 ●

●

●

●

●

Be a visible role model. Employees will look to the behaviour of top management as a benchmark for defining appropriate behaviour. Send a positive message. Communicate ethical expectations. Ethical ambiguities can be minimized by creating and disseminating an organizational code of ethics. It should state the organization’s primary values and the ethical rules that employees are expected to follow. Provide ethical training. Set up seminars, workshops and similar ethical training programmes. Use these training sessions to reinforce the organization’s standards of conduct, to clarify what practices are and are not permissible, and to address possible ethical dilemmas. Visibly reward ethical acts and punish unethical ones. Appraise managers on how their decisions measure up against the organization’s code of ethics. Review the means as well as the ends. Visibly reward those who act ethically and conspicuously punish those who don’t. Provide protective mechanisms. The organization needs to provide formal mechanisms so that employees can discuss ethical dilemmas and report unethical behaviour without fear of reprimand. This might include creation of ethical counsellors, ombudsmen or ethical officers.

The work of setting a positive ethical climate has to start at the top of the organization.73 A study of 195 managers demonstrated that when top management emphasizes strong ethical values, supervisors are more likely to practice ethical leadership. Positive ethical attitudes transfer down to line employees, who show lower levels of deviant behaviour and higher levels of cooperation and assistance. A study involving auditors found perceived pressure from organizational leaders to behave unethically was associated with increased intentions to engage in unethical practices.74 Clearly the wrong type of organizational culture can negatively influence employee ethical behaviour. Finally, employees whose ethical values are similar to those of their department are more likely to be promoted, so we can think of ethical culture as flowing from the bottom up as well.75

474  16 Organizational culture

OB IN THE NEWS

Toshiba’s once lauded culture became the cause of its problems by Kana Inagaki and Leo Lewis For years, Toshiba, one of Japan’s best-known consumer electronics brands, had been a poster child of the country’s efforts to police corporate behaviour. The 140-year-old company even appeared as a case study in books on governance. But what an internal auditor at Toshiba witnessed in late January 2015 was the opposite of exemplary behaviour. Instead, he saw the early signs of what would become one of the country’s most embarrassing corporate scandals, involving a companywide effort to inflate profits by more than €1bn. Peppering an independent panel’s report on Toshiba were examples of what it was hiding: deals offered below cost but reported as profitmaking, losses reported in misleading timeframes and division heads browbeaten into inflating reported profits. But underpinning it all is the suggestion that Toshiba’s fundamental problem was culture and a

strong hint that the problem may exist elsewhere in corporate Japan. Top management, says the report, was systematically involved in the inflation of numbers, which drove the company into a place where profits were paramount and failure unacceptable – conditions that prevail in business cultures outside Japan but are here presented as the prime motive for deceit. The report dwells on the use of the term ‘challenge’ by the company’s management as it sought to impose ever fiercer profit targets on its staff. Tactics included warning poorly performing division heads that their business might be closed if the numbers did not improve, heaping pressure on staff. It said the company is marked by a ‘corporate culture that does not allow employees to go against the will of their superiors’.

Source: Adapted from Kana Inagaki, ‘Toshiba’s once lauded culture became the cause of its problems’ and Leo Lewis, ‘Culture eats everything’, Financial Times, 21 July 2015. © The Financial Times Limited. All Rights Reserved. Pearson Education Ltd. is responsible for providing this adaptation of the original article.

Creating a positive organizational culture 6  Describe a positive organizational culture. positive organizational culture A culture that emphasizes building on employee strengths, rewards more than punishes and emphasizes individual vitality and growth.

At first glance, creating a positive culture may sound hopelessly naive, but the one thing that makes us believe this trend is here to stay is that there are signs that management practice and OB research are converging. A positive organizational culture is defined as a culture that emphasizes building on employee strengths, rewards more than it punishes and emphasizes individual vitality and growth.76 Let’s consider each of these areas.

Building on employee strengths A lot of OB, and management practice, is concerned with how to fix employee problems. Although a positive organizational culture does not ignore problems, it does emphasize showing workers how they can capitalize on their strengths. Management guru Peter Drucker claimed that most people do not know what their strengths are. ‘When you ask them, they look at you with a blank stare, or they respond in terms of subject knowledge, which is the wrong answer.’ Do you know what your strengths are? Wouldn’t it be better to be in an organizational culture that helped you discover those, and learn ways to make the most of them? Larry Hammond used this approach – finding and exploiting employee strengths – at a time when you’d least expect it: during the darkest days of the business. Hammond is CEO of Auglaize Provico, an agribusiness company. The company was in the midst of its worst financial

Creating a positive organizational culture   475

struggles and had to lay off one-quarter of its workforce. At that lowest point, Hammond decided to try a different approach. Rather than dwell on what was wrong, he decided to take advantage of what was right. ‘If you really want to [excel], you have to know yourself – you have to know what you’re good at, and you have to know what you’re not so good at,’ says Hammond. With the help of Gallup consultant Barry Conchie, Hammond focused on discovering and using employee strengths and helped the company turn itself around. ‘You ask Larry [Hammond] what the difference is, and he’ll say that it’s individuals using their natural talents,’ says Conchie.77

Rewarding more than punishing Although most organizations are sufficiently focused on extrinsic rewards like pay and promotions, they often forget about the power of smaller (and cheaper) rewards like praise. Creating a positive organizational culture means that managers ‘catch employees doing something right’. Many managers withhold praise either because they’re afraid employees will coast, or because they think praise is not valued. Employees generally don’t ask for praise, and managers usually don’t realize the costs of failing to give it. Take the example of Elzbieta Górska-Kołodziejczyk, a plant manager for International Paper’s facility in Kwidzyn, Poland. The job environment at the plant is bleak and difficult. Employees work in a windowless basement. Staffing is only roughly one-third of its prior level, while production has tripled. These challenges had done in the previous three managers. So, when Górska-Kołodziejczyk took over, she knew she had her work cut out for her. Although she had many items on her list of ways to transform the organization, at the top of her list was recognition and praise. She initially found it difficult to give praise to those who weren’t used to it, especially men, but she found over time that they valued it, too. ‘They were like cement at the beginning,’ she said, ‘like cement.’ Górska-Kołodziejczyk has found that giving praise is often reciprocated. One day a department supervisor pulled her over to tell her she was doing a good job. ‘This I do remember, yes,’ she said.78

Emphasizing vitality and growth No organization will get the best out of employees if the employees see themselves as mere tools or parts of the organization. A positive culture realizes the difference between a job and a career, and shows an interest not only in what the employee does to contribute to organ­ izational effectiveness, but in what the organization does to facilitate individual growth. An assessment of thousands of organizations revealed one-third felt they were not learning and growing on their job. The figure was even higher in some industries, such as banking, manufacturing, communications and utilities. Although it may take more creativity to encourage employee growth in some types of industries, it can happen in the fast-paced food service industry. Consider the case of Philippe Lescornez and Didier Brynaert. Philippe Lescornez leads a team of employees at Masterfoods in Belgium. One of his team members is Didier Brynaert, who works in Luxembourg, nearly 150 miles from Masterfoods’ Belgian headquarters. Brynaert was considered a good sales promoter who was meeting expectations. Lescornez decided that Brynaert’s job could be made more important if he were seen less as just another sales promoter and more as an expert on the unique features of the Luxembourg market. So Lescornez asked Brynaert for information he could share with the home office. He hoped that by raising Brynaert’s profile in Brussels, he could create in him a greater sense of ownership for his remote sales territory. ‘I started to communicate much more what he did to other people [within the company], because there’s quite some distance between the Brussels office and the section he’s working in. So I started to communicate, communicate, communicate. The more I communicated, the more he started to provide material,’ says Lescornez. As a result, ‘Now he’s recognized as the specialist for Luxembourg – the guy who is able to build a strong relationship with the Luxembourg clients,’ says Lescornez. What’s good for Brynaert, of course, is also good for Lescornez, who got credit for helping Brynaert grow and develop.79

476  16 Organizational culture

Limits of positive culture Is a positive culture a panacea? Even though some companies such as Cisco, Microsoft, ConSol, Beaverbrooks and 3M have embraced aspects of a positive organizational culture, it is a new enough area that there is some uncertainty about how and when it works best. Moreover, any OB scholar or manager needs to make sure he is objective about the benefits – and risks – of cultivating a positive organizational culture. It is important to note that the concept of creating positive cultures largely came from the US. However, not all cultures value being positive as much as US culture does. Further, take the example of Admiral, a British insurance company. The firm has established a Ministry of Fun in its call centres to organize such events as poem writings, table football and fancy dress days. When does the pursuit of a positive culture start to seem coercive or even Orwellian? As one critic notes, ‘Promoting a social orthodoxy of positiveness focuses on a particular constellation of desirable states and traits but, in so doing, can stigmatize those who fail to fit the template.’80 Our point is that there may be benefits to establishing a positive culture, but an organiz­ ation also needs to be careful to be objective and not pursue it past the point of effectiveness.

Spirituality and organizational culture 7 Identify characteristics of a spiritual culture.

What do Ford, Elcoteq Communications, The Body Shop and the Times of India have in common? They’re among a growing number of organizations that have embraced workplace spirituality.

What is spirituality? workplace spirituality The recognition that people have an inner life that nourishes and is nourished by meaningful work that takes place in the context of community.

Workplace spirituality is not about organized religious practices. It’s not about God or theology. Workplace spirituality recognizes that people have an inner life that nourishes and is nourished by meaningful work that takes place in the context of community.81 Organizations that promote a spiritual culture recognize that people seek to find meaning and purpose in their work and desire to connect with other human beings as part of a community. Many of the topics we have discussed – ranging from job design (designing work that is meaningful to employees) to transformational leadership (leadership practices that emphasize a higher-order purpose and self-transcendent goals) – are well matched to the concept of organizational spirituality. When a company emphasizes its commitment to paying Third World suppliers a fair (above-market) price for their coffee to facilitate community development – as did Starbucks – or encourages employees to share prayers or inspirational messages through email – as did Interstate Batteries – it is encouraging a more spiritual culture.82

Why spirituality now? Historical models of management and organizational behaviour had no room for spirituality. As we noted in our discussion of emotions in Chapter 8, the myth of rationality assumed that the well-run organization eliminated feelings. Similarly, concern about an employee’s inner life had no role in the perfectly rational model. But just as we’ve now come to realize that the study of emotions improves our understanding of organizational behaviour, an awareness of spirituality can help you to better understand employee behaviour in the twenty-first century. Of course, employees have always had an inner life. So why has the search for meaning and purposefulness in work surfaced now? There are a number of reasons. We summarize them below.

Reasons for the growing interest in spirituality ●

Spirituality can counterbalance the pressures and stress of a turbulent pace of life. Contemporary lifestyles – single-parent families, geographic mobility, the temporary nature of jobs,

Spirituality and organizational culture   477

new technologies that create distance between people – underscore the lack of community many people feel and increase the need for involvement and connection. ●

●

● ●

Formalized religion hasn’t worked for many people and they continue to look for anchors to replace lack of faith and to fill a growing feeling of emptiness. Job demands have made the workplace dominant in many people’s lives, yet they continue to question the meaning of work. People want to integrate personal life values with their professional lives. An increasing number of people are finding that the pursuit of more material acquisitions leaves them unfulfilled.

Characteristics of a spiritual organization The concept of workplace spirituality draws on our previous discussions of values, ethics, motivation and leadership. What differentiates spiritual organizations from their nonspiritual counterparts? Although research remains preliminary, several cultural characteristics tend to be evident in spiritual organizations:83 ●

●

●

●

Benevolence. Spiritual organizations value showing kindness towards others and promoting the happiness of employees and other organizational stakeholders. Strong sense of purpose. Spiritual organizations build their cultures around a meaningful purpose. Although profits may be important, they’re not the primary value of the organ­ ization. Trust and respect. Spiritual organizations are characterized by mutual trust, honesty and openness. Employees are treated with esteem and value, consistent with the dignity of each individual. Open-mindedness. Spiritual organizations value flexible thinking and creativity among employees.

Criticisms of spirituality Critics of the spirituality movement in organizations have focused on three issues. First is the question of scientific foundation. What really is workplace spirituality? Is it just a new management buzzword? Second, are spiritual organizations legitimate? Specifically, do organ­ izations have the right to impose spiritual values on their employees? Third is the question of economics: Are spirituality and profits compatible? First, as you might imagine, there is comparatively little research on workplace spirituality. We don’t know whether the concept will have staying power. Do the cultural characteristics we just identified really separate spiritual organizations? Spirituality has been defined so broadly in some sources that practices from job rotation to corporate retreats at meditation centres have been identified as spiritual. Questions need to be answered before the concept gains full credibility. On the second question, there is clearly the potential for an emphasis on spirituality to make some employees uneasy. Critics have argued that secular institutions, especially business firms, have no business imposing spiritual values on employees.84 This criticism is undoubtedly valid when spirituality is defined as bringing religion and God into the workplace. However, the criticism seems less stinging when the goal is limited to helping employees find meaning and purpose in their work lives. If the concerns listed above truly characterize a large segment of the workforce, then perhaps organizations can do so. Finally, the issue of whether spirituality and profits are compatible objectives is certainly relevant for managers and investors in business. The evidence, although limited, indicates they are. In one study, organizations that provided their employees with opportunities for spiritual development have outperformed those that didn’t.85 Other studies reported that spirituality in organizations was positively related to creativity, employee satisfaction, job involvement and organizational commitment.86

478  16 Organizational culture

Creating a multinational organizational culture Research suggests that globalization can threaten even strong, positive organizational cultures because they are often based on the values of the company’s original country. Implementing a multinational organizational culture can create strife between employees of traditionally comp­ eting countries. When Swedish, Norwegian, Finnish and Danish banks combined to form Nordea financial services, researchers found the stereotypes some employees held created a combative atmosphere. Many of these stereotypes were based on the countries’ historical relationships: Finland had originally been a colony of Sweden, and Norway had been a part of Denmark and then of Sweden. The fact that none of the employees had yet been born when their countries were colonies didn’t matter; the stereotypes fractured the organizational culture. Complex alliances within Nordea formed along nationalistic lines to combat the efforts of other alliances. The dysfunctional organizational culture threatened the company’s survival. The case of Nordea illustrates the need for creating a strong, ethical, unique organizational culture for successful globalization. Nordea employed intentional ‘Nordic’ storytelling for employees to identify with positive aspects of their shared geographical region through press releases, corporate correspondence, equal country representation in top management and championing of shared values. The

glOBal

storytelling was successful in defining a positive organiz­ ­ ational culture, but the Nordic emphasis limited the company when it wanted to expand into Europe. Nordea then redefined its culture as ‘globalist’ in orientation, again employing storytelling as the communication method. Unfortunately, not only is organizational culture change difficult, but the company name Nordea, a blend of ‘Nordic’ and ‘idea’, brands it as uniquely regional. Nordea continues to struggle with culture issues. Because culture strongly affects performance, organiz­ ations need to construct and clearly communicate a multi­ national culture that focuses on corporate values. These values should be unique and separate from identifiable country norms, emphasize respect and tolerance for cultural differences and address the issue of cultural identity. Globalization can be an opportunity to positively change organiz­ ational culture. Sources: P. Monin, N. Noorderhavin, E. Vaara and D. Kroon, ‘Giving sense to and making sense of justice in postmerger integration’, Academy of Management Journal, February 2013, pp. 256–84; A. Simha and J. B. Cullen, ‘Ethical Climates and their effects on organizational outcomes: implications from the past and prophecies for the future’, Academy of Management Perspectives, November 2011, pp. 20–34; and E. Vaara and J. Tienari, ‘On the narrative construction of multinational corporations: an antenarrative analysis of legitimation and resistance in a cross-border merger’, Organization Science, March–April 2011, pp. 370–90.

Global implications 8  Show how national culture can affect the way organizational culture is transported to another country.

We considered global cultural values (collectivism–individualism, power distance, and so on) in Chapter 4. Here our focus is a bit narrower: how is organizational culture affected by a global context? Organizational cultures are so powerful that they often transcend national boundaries. But that doesn’t mean that organizations should, or could, ignore local culture. Organizational cultures often reflect national culture. For example, the culture at AirAsia, a Malaysian-based airline, emphasizes openness and friendships. The carrier has lots of parties, participative management and no private offices. This organizational culture reflects Malaysia’s relatively collectivistic culture. However, the culture of British Airways does not reflect the same degree of informality. If British Airways were to merge with AirAsia, it would need to take these cultural differences into account. So when an organization merges with, or acquires, a company from a different country or opens up operations in another country, it ignores the local culture at its own risk. For example, a hostile takeover bid from the British mobile phone group Vodafone for the German telecoms and engineering group Mannesmann led to a great deal of resistance. Never before had such a large company been taken over by a foreign firm. German political parties, trade unions and the Mannesmann works councils all strongly rejected Vodafone’s bid. They believed it could ultimately undermine the German corporate culture which is based on strong employee involvement and co-determination (employees having a role in the management of the company). Vodafone finally achieved the acquisition after a great deal of negotiation, campaigning and guaranteeing worker’s rights to participate. The management of ethical behaviour is another area where national culture can rub up against corporate culture.87 In the US, managers endorse the supremacy of anonymous market forces and implicitly or explicitly view profit maximization as a moral obligation for business

IMPLICATIONS FOR MANAGERS   479

organizations. This worldview sees bribery, nepotism and favouring personal ­contacts as highly unethical. Any action that deviates from profit maximization may indicate that inappropriate or corrupt behaviour may be occurring. In contrast, managers in developing economies are more likely to see ethical decisions as embedded in a social environment. That means doing special favours for family and friends is not only appropriate but possibly even an ethical responsibility. Managers in many nations also view capitalism sceptically and believe the interests of workers should be put on a par with the interests of shareholders. However, national cultural differences can also present opportunities to ‘shake up’ organizational cultures. The German-based chemicals group Lanxess appointed a Chinese executive, Liu Zhengrong, as Head of Human Resources to bring some Chinese dynamism to the company. And as the group sought to shift some production to China, it was anticipated that German executives would introduce more rigour to management in China.88

SUMMARY Figure 16.3 depicts organizational culture as an intervening variable. Employees form an overall subjective perception of the organization based on factors such as degree of risk tolerance, team emphasis and support of people. This overall perception becomes, in effect, the organization’s culture or personality. These favourable or unfavourable perceptions then affect employee performance and satisfaction, with the impact being greater for stronger cultures.

IMPLICATIONS FOR MANAGERS ●

●

●

●

●

Realize that an organization’s culture is relatively fixed in the short term. To effect change, involve top management and prepare a long-term strategic plan. Hire individuals whose values align with those of the organization; these employees will tend to remain committed and satisfied. Not surprisingly, ‘misfits’ have considerably higher turnover rates. Understand that employees’ performance and socialization depend to a considerable degree on their knowing what to do and not do. Train your employees well and keep them informed of changes to their job roles. As a manager, you can shape the culture of your work environment, sometimes as much as it shapes you. All managers can especially do their part to create an ethical culture and to consider spirituality and its role in creating a positive organizational culture. Be aware that your company’s organizational culture may not be ‘transportable’ to other countries. Understand the cultural relevance of your organization’s norms before introducing new plans or initiatives overseas.

Objective factors • Innovation and risk taking • Attention to detail • Outcome orientation • People orientation • Team orientation • Aggressiveness • Stability

Strength High Perceived as

Performance Organizational culture

Satisfaction Low

Figure 16.3  How organizational cultures have an impact on employee performance and satisfaction

480  16 Organizational culture

Organizational cultures can’t be changed

POINT/COUNTERPOINT

POINT An organization’s culture is made up of relatively stable characteristics. It develops over many years and is rooted in deeply held values to which employees are strongly committed. In addition, there are a number of forces continually operating to maintain a given culture. These include written statements about the organization’s mission and philosophy, the design of physical spaces and buildings, the dominant leadership style, hiring criteria, past promotion practices, entrenched rituals, popular stories about key people and events, the organiz­ ation’s historic performance evaluation criteria and the organization’s formal structure. Selection and promotion policies are particularly important devices that work against cultural change. Employees chose the organization because they perceived their values to be a ‘good fit’ with the organization. They become comfortable with that fit and will strongly resist efforts to disturb the equilibrium.

The  terrific difficulties that organizations such as Marks & Spencer, Volkswagen and the UK’s Royal Mail have had in trying to reshape their cultures attest to this dilemma. These organiz­ ations historically tended to attract individuals who desired situations that were stable and highly structured. Those in control in organizations will also select senior managers who will continue the current culture. Even attempts to change a culture by going outside the organization to hire a new chief executive are unlikely to be effective. The evidence indicates that the culture is more likely to change the executive than the other way around. Our argument should not be viewed as saying that culture can never be changed. In the unusual case in which an organ­ ization confronts a survival-threatening crisis, members of the organization will be responsive to efforts at cultural change. However, anything less than that is unlikely to be effective in bringing about cultural change.

COUNTERPOINT Changing an organization’s culture is extremely difficult, but cultures can be changed. The evidence suggests that cultural change is most likely to take place when most or all of the following conditions exist:

● Weak

● A

If all or most of these conditions exist, the following management actions may lead to change: initiating new stories and rituals, selecting and promoting employees who espouse the new values, changing the reward system to support the new values, and undermining current subcultures through transfers, job rotation and terminations. Under the best of conditions, these actions won’t result in an immediate or dramatic shift in the culture. In the final analysis, cultural change is a lengthy process – measured in years rather than in months. But cultures can be changed. The success that new leadership had in turning around the cultures at companies like Oticon, Unipart, 3M and GE attests to this claim.

dramatic crisis. This is a shock that undermines the status quo and calls into question the relevance of the current culture. Examples are a surprising financial setback, the loss of a major customer and a dramatic technological breakthrough by a competitor.

● Turnover

in leadership. New top leadership, which can provide an alternative set of key values, may be perceived as more capable of responding to the crisis.

● Young

and small organizations. The younger the organization, the less entrenched its culture will be. Similarly, it’s easier for management to communicate its new values when the organization is small.

culture. The more widely held a culture is and the higher the agreement among members on its values, the more difficult it will be to change. Conversely, weak cultures are more amenable to change than strong ones.

QUESTIONS FOR REVIEW 1. What is organizational culture and what are its

common characteristics? 2. What are the functional and dysfunctional effects of

organizational culture? 3. What factors create and sustain an organization’s

culture? 4. How is culture transmitted to employees?

5. How can an ethical culture be created? 6. What is a positive organizational culture? 7. What are the characteristics of a spiritual culture? 8. How does national culture affect what happens when

an organizational culture is transported to another country?

ETHICAL DILEMMA   481

EXPERIENTIAL EXERCISE RATE YOUR CLASSROOM CULTURE Listed here are 14 statements. Using the five-item scale (from Strongly Agree to Strongly Disagree), respond to each statement by circling the number that best represents your opinion. Strongly Agree

Agree

Neutral

Disagree

Strongly Disagree

  1.

I feel comfortable challenging statements made by my instructor.

5

4

3

2

1

  2.

My instructor heavily penalizes assignments that are not submitted on time.

1

2

3

4

5

  3.

My instructor believes that ‘it’s final results that count’.

1

2

3

4

5

  4.

My instructor is sensitive to my personal needs and problems.

5

4

3

2

1

  5.

A large portion of my grade depends on how well I work with others in the class.

5

4

3

2

1

  6.

I often feel nervous and tense when I come to class.

1

2

3

4

5

  7.

My instructor seems to prefer stability over change.

1

2

3

4

5

  8.

My instructor encourages me to develop new and different ideas.

5

4

3

2

1

  9.

My instructor has little tolerance for sloppy thinking.

1

2

3

4

5

10.

My instructor is more concerned with how I came to a conclusion than with the conclusion itself.

5

4

3

2

1

11.

My instructor treats all students alike.

1

2

3

4

5

12.

My instructor frowns on class members helping each other with assignments.

1

2

3

4

5

13.

Aggressive and competitive people have a distinct advantage in this class.

1

2

3

4

5

14.

My instructor encourages me to see the world differently.

5

4

3

2

1

Calculate your total score by adding up the numbers you circled. Your score will fall between 14 and 70. A high score (49 or above) describes an open, risk-taking, supportive, humanistic, team-oriented, easy-going, growth-­ oriented culture. A low score (35 or below) describes a closed, structured, task-oriented, individualistic, tense and stability-oriented culture. Note that differences count, so a score of 60 is a more open culture than one that scores 50. Also, realize that one culture isn’t preferable over another. The ‘right’ culture depends on you and your preferences for a learning environment. Form teams of five to seven members each. Compare your scores. How closely do they align? Discuss and resolve any discrepancies. Based on your team’s analysis, what type of student do you think would perform best in this class?

ETHICAL DILEMMA IS THERE ROOM FOR SNOOPING IN AN ORGANIZATION’S CULTURE? When Hewlett-Packard was caught spying on members of its board of directors, some of the activities appeared to violate the law, but much of it was legal. Moreover,

many companies spy on their employees – sometimes with and sometimes without their knowledge or consent. Organizations differ in their culture of surveillance. Some

482  16 Organizational culture

­ ifferences are due to the type of business. A Department d of Defence contractor has more reason – perhaps even obligation – to spy on its employees than does an orange juice producer. However, surveillance in most industries is on the upswing. There are several reasons for this, including the huge growth of two sectors with theft and security problems (services and information technology, respectively) and the increased availability and sophistication of surveillance technology. Consider the following surveillance actions and, for each action, decide whether it would never be ethical (mark N), would sometimes be ethical (mark S), or would always be ethical (mark A). For those you mark S, indicate on what factors your judgement would depend.

2. Periodically reading email messages for disclosure of

confidential information or inappropriate use. 3. Conducting video surveillance of workspace. 4. Monitoring websites visited by employees and deter-

mining the appropriateness and work-relatedness of those visited. 5. Recording phone conversations. 6. Posing as a job candidate, an investor, a customer or a

colleague (when the real purpose is to solicit information). Would you be less likely to work for an employer that engaged in some of these methods? Why or why not? Do you think use of surveillance says something about an organization’s culture?

1. Sifting through an employee’s trash for evidence of

wrongdoing.

Culture drives success at Hilti When current Chairman and former CEO of Hilti, Pius Baschera, accepted the Carl Bertelsmann prize for excellence in corporate culture, beating BMW and Novo Nordisk in the final, he commented: After hearing the details of our approach to corporate culture, you may have the urge to raise your hand and say ‘that’s your secret to success?!’ And I would answer, absolutely. Commitment and continuity are not nice to have but absolute essentials. Our corporate culture is based on the full commitment of top management to a never ending lifestyle of learning and living the core values of our company on every level of the organization. The worldwide Hilti Group evolved from modest beginnings. It was founded at the height of the Second World War when Martin Hilti and his brother Eugen opened a workshop with just five employees in Liechtenstein, where it remains based. Today the company, which designs, produces and sells products and systems for anything from measuring, positioning and drilling to chiselling, fastening, cutting and sanding, employs over 20,000 people. At Hilti integrity, commitment, courage and teamwork are the four cornerstones of their corporate culture. The firm encourages breaking away from habits, questioning the status quo, and trying out new ideas. Karsten Witchman, head of the Latin American region remarked, ‘What really keeps me going is the corporate culture. I’ve never experienced a stronger one. It makes room for other opinions and allows people to admit a weakness. I like it very much here because I can be true, authentic and honest.’ Hilti tries very hard to recruit people who fit with the organization’s culture. Michael Hilti, son of the founder,

CASE INCIDENT 1 claims that employees who do not share the Hilti values should leave the company. He explains that, ‘In a way, it is like team sports, where you also have to play by a set of rules. Suppose a football team hired Roger Federer, the tennis champion, to play offence, but Federer continued to play by the rules of tennis. No matter how superb his technique or how perfect his feel for the ball, he simply wouldn’t fit in with the team.’ What is also apparent is that the company does not seek to alter its organizational culture dependent on where it operates. The same cornerstones apply in the more than 120 countries in which it does business.

Questions 1. How would you describe the culture at Hilti using terms from this chapter?

2. Do you think this culture is appropriate for Hilti? Why or why not?

3. The son of the founder claims that employees who do not share the Hilti values should leave the company. What might be the pros and cons of this?

4. The firm does not seek to alter its culture depending on where in the world it operates. Is this an advisable policy? Is it realistic? Sources: A. Thomann, ‘Michael Hilti: The steadfast chairman of culture’, 3 January 2005, Online Publications Credit Suisse available at: http://emagazine.credit suisse.com/index.cfm?fuseaction=OpenArticle&aoid=78805&lang=EN&coid=120. Accessed 19 April 2009; Hilti: Our Culture Journey, www.hilti.com; Case Study, International Institute of Management Development (IMD), 2006, available at www.caseplace.org; www.hilti.com. Accessed 5 September 2015.

Endnotes   483

An odd couple? P&G and Google combine cultures At Procter & Gamble, the corporate culture is so rigid, employees jokingly call themselves ‘Proctoids’. In contrast, Google staffers are urged to wander the halls on companyprovided scooters and brainstorm on public whiteboards. Now, this odd couple think they have something to gain from one another – so they’ve started swapping employees. So far, about two-dozen staffers from the two companies have spent weeks dipping into each other’s staff training programmes and sitting in on meetings where business plans get hammered out. The initiative has been noticed. Previously, neither company had granted this kind of access to outsiders. Closer ties are crucial to both sides. P&G, the biggest advertising spender in the world, is waking up to the reality that the next generation of laundry-detergent, toilet-paper and skin-cream buyers now spends more time online than watching TV. And Google craves a bigger slice of P&G’s €6.5 billion annual ad budget as its own revenue growth slows. As the two companies started working together, the gulf between them quickly became apparent. When actress Salma Hayek unveiled an ambitious promotion for P&G’s Pampers brand, the Google team was stunned to learn that Pampers hadn’t invited any ‘motherhood’ bloggers – women who run popular websites about child-rearing – to attend the press conference. For their part, P&G employees gasped in surprise during a Tide brand meeting when a Google job-swapper apparently didn’t realize that Tide’s signature orange-coloured packaging is a key part of the brand’s image. These differences did provide important learning opportunities. Denise Chudy, a Google sales-team leader, caused a stir when she showed a dozen or so P&G employees some Google data indicating that online searches for the word ‘coupons’ was up about 50 per cent over the previous 12 months. Tracking online searches was ‘one of the best learning [experiences] of my first week at Google,’ P&G marketing manager Catherine Duval-Russell wrote on an in-house blog. P&G has a long history as a marketing innovator. Back in the late 1800s, it developed one of the earliest truly national brands – Ivory soap – with saturation advertising in everything from farm journals to religious periodicals. Decades later, radio and TV ‘soap operas’ famously took their name from the fact that P&G advertised so heavily on them to reach women. As part of a month-long job swap a mixed group of Google and P&G staffers crowded into P&G’s archives to study the 62-year history of Tide. Sessions like these are a key part of P&G’s training of up-and-coming brand managers.

CASE INCIDENT 2

Pouring over decades of marketing material – all featuring Tide’s bright orange packaging in a starring role – Google employee Jen Bradburn took note. ‘It’s helpful to know not to mess with the orange too much,’ she said. That elicited a chorus of unambiguous ‘yesses’ from P&G employees in attendance. Google job-swappers have started adopting P&G’s language. During a session on evaluating in-store displays, a P&G marketer described the company’s standard method, known as ‘stop, hold, close’. Product packaging first needs to ‘stop’ a shopper. ‘Hold’ is a pause to read the label, and ‘close’ is when a shopper puts the product in the cart. ‘This is just like our text ads,’ Google’s Ms Chudy said. The headline is the ‘stop’, its description is the ‘hold’ and the ‘close’ is clicking through to the website. ‘This is going to get so much easier, now that I’m learning their language,’ she said. With mummy-bloggers, Pampers was quick to follow Google’s advice. After failing to invite any to its initial Pampers promotion press conference, it invited a dozen or so to visit P&G’s baby division. The bloggers claim to have drawn anywhere from 100,000 to 6 million visitors to their websites. The bloggers toured the facilities, met with executives, got a primer on product design and had their hotel and travel costs covered. Their visit was captured on video for other P&G brands to study. Pampers’ sense of discovery of the power of bloggers is apparent in the video. ‘This is a very different type of communication than what Procter & Gamble is used to,’ Pampers spokesman Bryan McCleary advises viewers of the video. The bloggers ‘don’t like advertising,’ he says in the video. ‘What they do like are exciting stories . . . and those things actually can become word-of-mouth advertising, if done in the right way.’

Questions 1. What were Google and P&G trying to achieve by swapping employees?

2. What did they learn from each other? 3. Do you think this method would be effective in changing a company’s culture? Why or why not?

4. What risks could there be with this approach? 5. Do you think Google employees would want to work at P&G? Would P&G employees want to work at Google? Explain your answer. Source: Based on E. Byron, ‘A new odd couple: Google, P&G swap workers to spur innovation’, Wall Street Journal (Eastern edition), 19 November 2008, p. A1.

ENDNOTES 1 See, for example, H. S. Becker, ‘Culture: a sociological view’, Yale Review, Summer 1982, pp. 513–27; and E. H. Schein, Organiz­ ational Culture and Leadership (San Francisco, CA: Jossey-Bass, 1985), p. 168.

2 This seven-item description is based on C. A. O’Reilly III, J. Chatman and D. F. Caldwell, ‘People and organizational culture: a profile comparison approach to assessing person–organiz­ ation fit’, Academy of Management Journal, September 1991,

484  16 Organizational culture pp. 487–516; and J. A. Chatman and K. A. Jehn, ‘Assessing the relationship between industry characteristics and organizational culture: how different can you be?’, Academy of Management Journal, June 1994, pp. 522–53.

13 M. R. Bashshur, A. Hernández and V. González-Romá, ‘When managers and their teams disagree: a longitudinal look at the consequences of differences in perceptions of organizational support’, Journal of Applied Psychology, 96, 3 (2011), pp. 558–73.

3 K. S. Cameron, R. E. Quinn, J. DeGraff and A. V. Thakor, Competing Values Leadership: Creating Value in Organizations (Cheltenham, UK and Northampton, MA: Edward Elgar, 2006).

14 S. L. Dolan and S. Garcia, ‘Managing by values: cultural redesign for strategic organizational change at the dawn of the twentyfirst century’, Journal of Management Development, 21, 2 (2002), pp. 101–17.

4 C. A. Hartnell, A. Y. Ou and A. Kinicki, ‘Organizational culture and organizational effectiveness: a meta-analytic investigation of the competing values framework’s theoretical suppositions’, Journal of Applied Psychology, Online First Publication, 17 January 2011. 5 The view that there will be consistency among perceptions of organizational culture has been called the ‘integration’ perspective. For a review of this perspective and conflicting approaches, see D. Meyerson and J. Martin, ‘Cultural change: an integration of three different views’, Journal of Management Studies, November 1987, pp. 623–47; and P. J. Frost, L. F. Moore, M. R. Louis, C. C. Lundberg and J. Martin (eds), Reframing Organiz­ ational Culture (Newbury Park, CA: Sage Publications, 1991). 6 See J. M. Jermier, J. W. Slocum Jr, L. W. Fry and J. Gaines, ‘Organizational subcultures in a soft bureaucracy: resistance behind the myth and facade of an official culture’, Organization Science, May 1991, pp. 170–94; and P. Lok, R. Westwood and J. Crawford, ‘Perceptions of organisational subculture and their significance for organisational commitment’, Applied Psychology: An Inter­ national Review, 54, 4 (2005), pp. 490–514. 7 D. A. Hoffman and L. M. Jones, ‘Leadership, collective personality, and performance’, Journal of Applied Psychology, 90, 3 (2005), pp. 509–22. 8 S. Hamm, ‘No letup – and no apologies’, BusinessWeek, 26 October 1998, pp. 58–64; and C. Carlson, ‘Former Intel exec slams Microsoft culture’, eWEEK.com, 26 March 2002, www. eweek.com/article2/0,1759,94976,00.asp. 9 See, for example, G. G. Gordon and N. DiTomaso, ‘Predicting corporate performance from organizational culture’, Journal of Management Studies, November 1992, pp. 793–98; J. B. Sorensen, ‘The strength of corporate culture and the reliability of firm performance’, Administrative Science Quarterly, March 2002, pp. 70–91; and J. Rosenthal and M. A. Masarech, ‘High-performance cultures: how values can drive business results’, Journal of Organizational Excellence, Spring 2003, pp. 3–18. 10 Y. Wiener, ‘Forms of value systems: a focus on organizational effectiveness and cultural change and maintenance’, Academy of Management Review, October 1988, p. 536; and B. Schneider, A. N. Salvaggio and M. Subirats, ‘Climate strength: a new direction for climate research’, Journal of Applied Psychology, 87 (2002), pp. 220–29. 11 R. T. Mowday, L. W. Porter and R. M. Steers, Employee Link­ ages: The Psychology of Commitment, Absenteeism, and Turn­ over (New York: Academic Press, 1982); C. Vandenberghe, ‘Organizational culture, person-culture fit, and turnover: a replication in the health care industry’, Journal of Organizational Behavior, March 1999, pp. 175–84; and M. Schulte, C. Ostroff, S. Shmulyian and A. Kinicki, ‘Organizational climate configurations: relationships to collective attitudes, customer satisfaction, and financial performance’, Journal of Applied Psychology, 94, 3 (2009), pp. 618–34. 12 J. W. Grizzle, A. R. Zablah, T. J. Brown, J. C. Mowen and J. M. Lee, ‘Employee customer orientation in context: how the environment moderates the influence of customer orientation on performance outcomes’, Journal of Applied Psychology, 94, 5 (2009), pp. 1227–42.

15 See C. A. O’Reilly and J. A. Chatman, ‘Culture as social control: corporations, cults, and commitment’, in B. M. Staw and L. L. Cummings (eds), Research in Organizational Behavior, vol. 18 (Greenwich, CT: JAI Press, 1996), pp. 157–200. See also M. Pina e Cunha, ‘The “best place to be”: managing control and employee loyalty in a knowledge-intensive company’, Journal of Applied Behavioral Science, December 2002, pp. 481–95. 16 Y. Ling, Z. Simsek, M. H. Lubatkin and J. F. Veiga, ‘Transformational leadership’s role in promoting corporate entrepreneurship: examining the CEO-TMT interface’, Academy of Management Journal, 51, 3 (2008), pp. 557–76; and A. Malhotra, A. Majchrzak and B. Rosen, ‘Leading virtual teams’, Academy of Management Perspectives, 21, 1 (2007), pp. 60–70. 17 D. Denison, ‘What is the difference between organizational culture and organizational climate? A native’s point of view on a decade of paradigm wars’, Academy of Management Review, 21 (1996) pp. 519–654; and L. R. James, C. C. Choi, C. E. Ko, P. K. McNeil, M. K. Minton, M. A. Wright and K. Kim, ‘Organizational and psychological climate: a review of theory and research’, European Journal of Work and Organizational Psychology, 17, 1 (2008), pp. 5–32. 18 J. Z. Carr, A. M. Schmidt, J. K. Ford and R. P. DeShon, ‘Climate perceptions matter: a meta-analytic path analysis relating molar climate, cognitive and affective states, and individual level work outcomes’, Journal of Applied Psychology, 88, (2003), pp. 605–19. 19 Schulte, Ostroff, Shmulyian and Kinicki, ‘Organizational climate configurations’. 20 S. D. Pugh, J. Dietz, A. P. Brief and J. W. Wiley, ‘Looking inside and out: the impact of employee and community demographic composition on organizational diversity climate’, Journal of Applied Psychology, 93, 6 (2008), pp. 1422–8; K. H. Ehrhart, L. A. Witt, B. Schneider and S. J. Perry, ‘Service employees give as they get: internal service as a moderator of the service climate-­ service outcomes link’, Journal of Applied Psychology, 96, 2 (2011), pp. 423–31; and A. Simha and J. B. Cullen, ‘Ethical climates and their effects on organizational outcomes: implications from the past and prophecies for the future’, Academy of Management Perspectives, November 2011, pp. 20–34. 21 J. C. Wallace, P. D. Johnson, K. Mathe and J. Paul, ‘Structural and psychological empowerment climates, performance, and the moderating role of shared felt accountability: a managerial perspective’, Journal of Applied Psychology, 96, 3 (2011), pp. 840–50. 22 J. M. Beus, S. C. Payne, M. E. Bergman and W. Arthur, ‘Safety climate and injuries: an examination of theoretical and empirical relationships’, Journal of Applied Psychology, 95, 4 (2010), pp.  13–27. 23 A. Simha and J. B. Cullen, ‘Ethical climates and their effects on organizational outcomes: implications from the past and prophecies for the future’, Academy of Management, November 2012, pp. 20–34. 24 Ibid. 25 Simha and Cullen, ‘Ethical climates and their effects on organiz­ ational outcomes’.

Endnotes   485 26 A. Arnaud, ‘Conceptualizing and measuring ethical work climate development and validation of the ethical climate index’, Busi­ ness & Society, June 2010, pp. 345–458. 27 A. Arnaud and M. Schminke, ‘The ethical climate and context of organizations: a comprehensive model’, Organization Science, November–December 2012, pp. 1767–80. 28 J. P. Kotter, ‘Change management: accelerate!’, Harvard Business Review, November 2012, pp. 44–58. 29 R. Walker, ‘Behind the music’, Fortune, 29 October 2012, pp. 57–8. 30 M. Herper, ‘Niche pharma’, Forbes, 24 September 2012, pp. 80–9. 31 R. Pyrillis, ‘2012 Optimas award winners: ChildNet’, Workforce Management, November 2012, pp. 24–6. 32 C. Hannan, ‘Management secrets from the meanest company in America’, Bloomberg Businessweek, 2 January 2013, pp. 46–51. 33 Ibid. 34 J. Bandler and D. Burke, ‘How HP lost its way’, Fortune, 21 May 2012, pp. 147–64. 35 R. L. Jepperson, ‘Institutions, institutional effects, and institutionalism’, in W. W. Powell and P. J. DiMaggio (eds), The New Institutionalism in Organizational Analysis (Chicago: University of Chicago Press, 1991), pp. 143–63; G. F. Lanzara and G. Patriotta, ‘The institutionalization of knowledge in an automotive factory: templates, inscriptions, and the problems of durability’, Organization Studies, 28, 5 (2007), pp. 635–60; and T. B. Lawrence, M. K. Mauws, B. Dyck and R. F. Kleysen, ‘The politics of organizational learning: integrating power into the 4I Framework’, Academy of Management Review, January 2005, pp. 180–91. 36 J. B. Sorensen, ‘The strength of corporate culture and the reliability of firm performance’, Administrative Science Quarterly, March 2002, pp. 70–91. 37 See C. Lindsay, ‘Paradoxes of organizational diversity: living within the paradoxes’, in L. R. Jauch and J. L. Wall (eds), Proceedings of the 50th Academy of Management Confer­ ence (San Francisco, CA 1990), pp. 374–78; T. Cox Jr, Cultural Diversity in Organizations: Theory, Research & Practice (San Francisco, CA: Berrett-Koehler, 1993), pp. 162–70; and L. Grensing-Pophal, ‘Hiring to fit your corporate culture’, HR Magazine, August 1999, pp. 50–4. 38 K. Labich, ‘No more crude at Texaco’, Fortune, 6 September 1999, pp. 205–12; and ‘Rooting out racism’, BusinessWeek, 10 January 2000, p. 66. 39 S. Cartwright and C. L. Cooper, ‘The role of culture compatibility in successful organizational marriages’, Academy of Management Executive, May 1993, pp. 57–70; R. A. Weber and C. F. Camerer, ‘Cultural conflict and merger failure: an experimental approach’, Management Science, April 2003, pp. 400–12; and I. H. Gleibs, A. Mummendey and P. Noack, ‘Predictors of change in postmerger identification during a merger process: a longitudinal study’, Journal of Personality and Social Psychology, 95, 5 (2008), pp. 1095–112. 40 P. Gumbel, ‘Return of the urge to merge’, Time Europe Maga­ zine, 13 July 2003, www.time.com/time/europe/magazine/ article/0,13005,901030721–464418,00.html. 41 J. Badrtalei and D. Bates, ‘Effect of organizational cultures on mergers and acquisitions: the case of DaimlerChrysler’, Interna­ tional Journal of Management, 24, 2 (2007); pp. 303–17. 42 ‘International: culture impacts M&A outcomes’, Oxford Analytica Daily Brief Service, 8 January 2008, p. 1.

43 E. H. Schein, ‘The role of the founder in creating organizational culture’, Organizational Dynamics, Summer 1983, pp. 13–28; and Y. L. Zhao, O. H. Erekson, T. Wang and M. Song, ‘Pioneering advantages and entrepreneurs’ first-mover decisions: an empirical investigation for the United States and China’, Journal of Product Innovation Management, December 2012, pp. 190–210. 44 E. H. Schein, ‘Leadership and organizational culture’, in F. Hesselbein, M. Goldsmith and R. Beckhard (eds), The Leader of the Future (San Francisco, CA: Jossey-Bass, 1996), pp. 61–2. 45 S. Meichtry and C. Passariello, ‘For Roberto Cavalli, “It’s hard to let go of one-man show”; designer seeks an investor but shuns good offers: “Not worthy of my name”’, Wall Street Journal (Eastern edition), 20 December 2007, p. A1. 46 See, for example, J. R. Harrison and G. R. Carroll, ‘Keeping the faith: a model of cultural transmission in formal organizations’, Administrative Science Quarterly, December 1991, pp. 552–82; see also G. George, R. G. Sleeth and M. A. Siders, ‘Organiz­ ational culture: leader roles, behaviors, and reinforcement mechanisms’, Journal of Business & Psychology, Summer 1999, pp. 545–60. 47 B. Schneider, H. W. Goldstein and D. B. Smith, ‘The ASA framework: an update’, Personnel Psychology, Winter 1995, pp. 747–773; D. M. Cable and T. A. Judge, ‘Interviewers’ perceptions of person-organization fit and organizational selection decisions’, Journal of Applied Psychology, August 1997, pp. 546–61; M. L. Verquer, T. A. Beehr and S. H. Wagner, ‘A meta-analysis of relations between person-organization fit and work attitudes’, Journal of Vocational Behavior, December 2003, pp. 473–89; and W. Li, Y. Wang, P. Taylor, K. Shi and D. He, ‘The influence of organizational culture on work-related personality requirement ratings: a multilevel analysis’, International Journal of Selection and Assessment, 16, 4 (2008), pp. 366–84. 48 L. Grensing-Pophal, ‘Hiring to fit your corporate culture’, HR Magazine, August 1999, pp. 50–4. 49 D. C. Hambrick and P. A. Mason, ‘Upper echelons: the organ­ ization as a reflection of its top managers’, Academy of Manage­ ment Review, April 1984, pp. 193–206; M. A. Carpenter, M. A. Geletkanycz and W. G. Sanders, ‘Upper echelons research revisited: antecedents, elements, and consequences of top management team composition’, Journal of Management, 30, 6 (2004), pp. 749–78, and H. Wang, A. S. Tsui and K. R. Xin, ‘CEO leadership behaviors, organizational performance, and employees’ attitudes’, Leadership Quarterly, 22, 1 (2011), pp. 92–105. 50 ‘The world’s billionaires: #4 Ingvar Kamprad and family’, 3 August 2007, Forbes.com. Available at http://www.forbes.com/ lists/2007/10/07billionaires_Ingvar-Kamprad-family_BWQ7. html. Accessed 29 April 2009. 51 See, for instance, J. P. Wanous, Organizational Entry, 2nd edn (New York: Addison-Wesley, 1992); G. T. Chao, A. M. O’LearyKelly, S. Wolf, H. J. Klein and P. D. Gardner, ‘Organizational socialization: its content and consequences’, Journal of Applied Psychology, October 1994, pp. 730–43; B. E. Ashforth, A. M. Saks and R. T. Lee, ‘Socialization and newcomer adjustment: the role of organizational context’, Human Relations, July 1998, pp. 897–926; D. A. Major, ‘Effective newcomer socialization into high-performance organizational cultures’, in N. M. Ashkanasy, C. P. M. Wilderom and M. F. Peterson (eds), Handbook of Organizational Culture & Climate, pp. 355–68; D. M. Cable and C. K. Parsons, ‘Socialization tactics and person-­organization fit’, Personnel Psychology, Spring 2001, pp. 1–23; and K. Rollag, ‘The impact of relative tenure on newcomer socialization dynamics’, Journal of Organizational Behavior, November 2004, pp. 853–72.

486  16 Organizational culture 52 ‘100 best workplaces in Europe 2007’, Great place to work/Finan­ cial Times see http://www.greatplacetowork.com/ and http:// www.ft.com/reports/bestwork2007.

66 V. Matthews, ‘Starting every day with a shout and a song’, Finan­ cial Times, 2 May 2001, p. 11; and M. Gimein, ‘Sam Walton made us a promise’, Fortune, 18 March 2002, pp. 121–30.

53 R. E. Silverman, ‘Companies try to make the first day for new hires more fun’, Wall Street Journal, 28 May 2013, http://online. wsj.com/article/SB10001424127887323336104578501631475934 850.html.

67 M. Moskowitz and F. Levering, ‘The 100 Best Companies to Work For’, Fortune, 6 February 2012, p. 120.

54 J. Van Maanen and E. H. Schein, ‘Career development’, in J. R. Hackman and J. L. Suttle (eds), Improving Life at Work (Santa Monica, CA: Goodyear, 1977), pp. 58–62.

69 A. Rafaeli and M. G. Pratt, ‘Tailored meanings: on the meaning and impact of organizational dress’, Academy of Management Review, January 1993, pp. 32–55; and J. M. Higgins and C. McAllaster, ‘Want innovation? Then use cultural artifacts that support it’, Organizational Dynamics, August 2002, pp. 74–84.

55 C. J. Collins, ‘The interactive effects of recruitment practices and product awareness on job seekers’ employer knowledge and application behaviors’, Journal of Applied Psychology, 92, 1 (2007), pp. 180–90. 56 J. D. Kammeyer-Mueller and C. R. Wanberg, ‘Unwrapping the organizational entry process: disentangling multiple antecedents and their pathways to adjustment’, Journal of Applied Psychology, 88 (2003), pp. 779–94; E. W. Morrison, ‘Longitudinal study of the effects of information seeking on newcomer socialization’, Journal of Applied Psychology, 78 (2003), pp. 173–83; and M. Wang, Y. Zhan, E. McCune and D. Truxillo, ‘Understanding newcomers’ adaptability and work-related outcomes: testing the mediating roles of perceived P-E fit variables’, Personnel Psychology, 64, 1 (2011), pp. 163–89. 57 E. W. Morrison, ‘Newcomers’ relationships: the role of social network ties during socialization’, Academy of Management Journal, 45 (2002), pp. 1149–60. 58 Based on J. Van Maanen, ‘People processing: strategies of organ­ izational socialization’, Organizational Dynamics, Summer 1978, pp. 19–36; and E. H. Schein, ‘Organizational culture’, American Psychologist, February 1990, p. 116. 59 T. N. Bauer, T. Bodner, B. Erdogan, D. M. Truxillo and J. S. Tucker, ‘Newcomer adjustment during organizational socialization: a meta-analytic review of antecedents, outcomes, and methods’, Journal of Applied Psychology, 92, 3 (2007), pp. 707–21.

68 A. Bryant, ‘Take the bus, and watch the ideas flow’, New York Times, 16 September 2012, p. 2.

70 See B. Victor and J. B. Cullen, ‘The organizational bases of ethical work climates’, Administrative Science Quarterly, March 1988, pp. 101–125; R. L. Dufresne, ‘An action learning perspective on effective implementation of academic honor codes’, Group & Organization Management, April 2004, pp. 201–18; and A. Ardichvilli, J. A. Mitchell and D. Jondle, ‘Characteristics of ethical business cultures’, Journal of Business Ethics, 85, 4 (2009), pp. 445–51. 71 J. Kantor and D. Streitfeld, ‘Inside Amazon: wrestling big ideas in a bruising workplace’, New York Times, 15 August 2015. 72 J. P. Mulki, J. F. Jaramillo and W. B. Locander, ‘Critical role of leadership on ethical climate and salesperson behaviors’, Journal of Business Ethics, 86, 2 (2009), pp. 125–41; M. Schminke, M. L. Ambrose and D. O. Neubaum, ‘The effect of leader moral development on ethical climate and employee attitudes’, Organ­ izational Behavior and Human Decision Processes, 97, 2 (2005), pp. 135–51; and M. E. Brown, L. K. Treviño and D. A. Harrison, ‘Ethical leadership: a social learning perspective for construct development and testing’, Organizational Behavior and Human Decision Processes, 97, 2 (2005), pp. 117–34. 73 D. M. Mayer, M. Kuenzi, R. Greenbaum, M. Bardes and S. Salvador, ‘How low does ethical leadership flow? Test of a trickle-down model’, Organizational Behavior and Human Decision Processes, 108, 1 (2009), pp. 1–13.

60 W. R. Boswell, A. J. Shipp, S. C., Payne and S. S. Culbertson, ‘Changes in newcomer job satisfaction over time: examining the pattern of honeymoons and hangovers’, Journal of Applied Psychology, 94, 4 (2009), pp. 844–58.

74 B. Sweeney, D. Arnold and B. Pierce, ‘The impact of perceived ethical culture of the firm and demographic variables on auditors’ ethical evaluation and intention to act decisions’, Journal of Business Ethics, 93, 4 (2010), pp. 531–51.

61 C. Vandenberghe, A. Panaccio, K. Bentein, K. Mignonac and P. Roussel, ‘Assessing longitudinal change of and dynamic relationships among role stressors, job attitudes, turnover intention, and well-being in neophyte newcomers’, Journal of Organizational Behavior, 32, 4 (2011), pp. 652–71.

75 M. L. Gruys, S. M. Stewart, J. Goodstein, M. N. Bing and A. C. Wicks, ‘Values enactment in organizations: a multi-level examination’, Journal of Management, 34, 4 (2008), pp. 806–43.

62 R. Donkin, ‘Work is not everything – especially at the bottom: employees are often told to have positive attitudes, mainly as this makes more money for their bosses’, Financial Times, 15 December 2005, p. 33. 63 D. M. Boje, ‘The storytelling organization: a study of story performance in an office-supply firm’, Administrative Science Quarterly, March 1991, pp. 106–26; C. H. Deutsch, ‘The parables of corporate culture’, New York Times, 13 October 1991, p. F25; and M. Ricketts and J. G. Seiling, ‘Language, metaphors, and stories: catalysts for meaning making in organizations’, Organ­ ization Development Journal, Winter 2003, pp. 33–43. 64 A. J. Shipp and K. J. Jansen, ‘Reinterpreting time in fit theory: crafting and recrafting narratives of fit in medias res’, Academy of Management Review, 36, 1 (2011), pp. 76–101. 65 See G. Islam and M. J. Zyphur, ‘Rituals in organizations: a review and expansion of current theory’, Group and Organiz­ ation Management, 34, 1 (2009), pp. 114–39.

76 D. L. Nelson and C. L. Cooper (eds), Positive Organizational Behavior (London: Sage, 2007); K. S. Cameron, J. E. Dutton and R. E. Quinn (eds), Positive Organizational Scholarship: Founda­ tions of a New Discipline (San Francisco, CA: Berrett-Koehler, 2003); and F. Luthans and C. M. Youssef, ‘Emerging positive organizational behavior’, Journal of Management, June 2007, pp. 321–49. 77 J. Robison, ‘Great leadership under fire’, Gallup Leadership Journal, 8 March 2007, pp. 1–3. 78 R. Wagner and J. K. Harter, 12: The Elements of Great Managing (New York: Gallup Press, 2006). 79 R. Wagner and J. K. Harter, ‘Performance reviews without the anxiety’, Gallup Leadership Journal, 12 July 2007, pp. 1–4; and Wagner and Harter, 12: The Elements of Great Managing. 80 S. Fineman, ‘On being positive: concerns and counterpoints’, Academy of Management Review, 31, 2 (2006), pp. 270–91. 81 D. P. Ashmos and D. Duchon, ‘Spirituality at work: a conceptualization and measure’, Journal of Management Inquiry, June

Endnotes   487 2000, p. 139; and E. Poole, ‘Organisational spirituality: a literature review’, Journal of Business Ethics, 84, 4 (2009), pp. 577–88. 82 L. W. Fry and J. W. Slocum, ‘Managing the triple bottom line through spiritual leadership’, Organizational Dynamics, 37, 1 (2008), pp. 86–96. 83 This section is based on I. A. Mitroff and E. A. Denton, A Spiritual Audit of Corporate America: A Hard Look at Spirit­ uality, Religion, and Values in the Workplace (San Francisco: Jossey-Bass, 1999); E. H. Burack, ‘Spirituality in the workplace’, Journal of Organizational Change Management, 12, 3 (1999), pp. 280–91; and C. L. Jurkiewicz and R. A. Giacalone, ‘A values framework for measuring the impact of workplace spirituality on organizational performance’, Journal of Business Ethics, 49, 2 (2004), pp. 129–42. 84 M. Lips-Miersma, K. L. Dean and C. J. Fornaciari, ‘Theorizing the dark side of the workplace spirituality movement’, Journal of Management Inquiry, 18, 4 (2009), pp. 288–300. 85 J.-C. Garcia-Zamor, ‘Workplace spirituality and organiz­ ational performance’, Public Administration Review, May–June

2003, pp. 355–63; and L. W. Fry, S. T. Hannah, M. Noel and F. O. Walumbwa, ‘Impact of spiritual leadership on unit performance’, Leadership Quarterly, 22, 2 (2011), pp. 259–70. 86 A. Rego and M. Pina e Cunha, ‘Workplace spirituality and organizational commitment: an empirical study’, Journal of Organiz­ ational Change Management, 21, 1 (2008), pp. 53–75; and R. W. Kolodinsky, R. A. Giacalone and C. L. Jurkiewicz, ‘Workplace values and outcomes: exploring personal, organizational, and interactive workplace spirituality’, Journal of Business Ethics, 81, 2 (2008), pp. 465–80. 87 D. J. McCarthy and S. M. Puffer, ‘Interpreting the ethicality of corporate governance decision in Russia: utilizing integrative social contracts theory to evaluate the relevance of agency theory norms’, Academy of Management Review, 33, 1 (2008), pp. 11–31. 88 G. Dyer, ‘A tale of two corporate cultures: the multinational workforce: a Chinese executive’s appointment to a German company has prompted an exchange of workplace attitudes’, Financial Times, 23 May 2006, p. 10.

CHAPTER 17 Human resource policies and practices Learning objectives After studying this chapter, you should be able to: 1 Identify the most useful initial selection methods. 2 Identify the most useful substantive selection methods. 3 Define contingent selection. 4 Compare the four main types of training. 5 Contrast formal and informal training methods. 6 Contrast on-the-job and off-the-job training. 7 List the methods of performance evaluation. 8 Show how managers can improve performance evaluations. 9 Describe the leadership role of HR in organizations.

To manage people well, companies should . . . elevate HR to a position of power and primacy in the organization. Jack Welch

THE CADBURY HR BATTLE

Oli Scarff/Getty Images

Even a cursory search for the companies that have embodied great human resource (HR) policies and practices will quickly turn up the confectionary company Cadbury. Established in Birmingham, UK in 1824, the company would become almost as well known for its pioneering HR initiatives as the chocolate it produced. In the nineteenth century most factories were not known for employee friendly policies. Cadbury was different. As the company grew, Richard and George Cadbury opened what was to become ‘the home of Cadbury’ in 1879 and later to provide the inspiration for Roald Dahl to write Charlie and the Chocolate Factory – the Bourneville plant. Employee welfare was a paramount value. Richard and George would walk the floor each morning and join employees for a game of football after work. George developed the Bourneville estate for employees to live with cottages, houses, gardens, parks, lakes and sports facilities. The company pioneered HR practices such as half days on Saturdays, paid holidays, training departments, equality in pay and conditions, pension schemes, joint works committees and a full staff medical service. Later they helped rehabilitate ex-offenders and offered jobs for the longterm unemployed. But the purple velvet glove came with an iron fist, notes Carl Chinn, author of The Cadbury Story: ‘There were firm rules concerning lateness, stealing, inferior work, wasting materials and the eating of chocolate.’

When Cadbury was taken over by Kraft in a hostile bid, more than 150 years of pioneering people-centred HR policies were suddenly under the spotlight. It seemed the new owners had a very different view of their human resources. Just a week after promising to keep Cadbury’s Somerdale factory near Bristol open, Kraft back-tracked and said it would close the plant. At the Bourneville factory, despite reassurances that jobs would be maintained, a confrontational document told workers they must ‘fundamentally’ change their behaviour in the factory – or apply for voluntary redundancy. The new document called ‘High Performing Bournville: is this for me?’ warned: ‘We need everyone at all levels to demonstrate a new set of behaviours.’ One worker said, ‘The way we work, shift patterns, terms and conditions, and contracts of employment are all under scrutiny and the workforce is extremely worried. Employees’ whole lives may have to change, people working days may also have to work nights, and vice versa. Holidays may have to be moved to accommodate production needs. There is a theory among the majority of Bournville employees that Mondelez (now the owners of Cadbury after Kraft restructured) only ever wanted the Cadbury brand and reputation, not the people, the site or the heritage.’ It is clear that changing HR policies and practices can fundamentally affect employee behaviour.

Sources: Robert Jeffery, ‘What Cadbury knows about great HR’, CIPD, 3 June 2013 http://www.cipd.co.uk/pm/peoplemanagement/b/weblog/archive/ 2013/06/03/what-cadbury-knows-about-great-hr.aspx; Mark Reynolds, ‘More than 1,000 Cadbury’s workers told to adapt to change to see jobs moved ­overseas’, 16 October 2014, The Express; www.cadbury.co.uk. Accessed 15 September 2015.

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The message of this chapter is that human resource (HR) policies and practices – such as employee selection, training and performance management – influence an organization’s effectiveness.1 These policies and practices have a direct influence on all employees behaviour and it is important to understand these affects whether you are (or aspire to be) a HR manager or not. For example, I’m sure you can imagine how introducing a policy of firing low performers would affect motivation, teamworking, conflict, politics and the culture of the organization. However, studies show that many managers often don’t know which HR practices work, which don’t, and what the affects are on employee behaviour.

REFLECTION List examples of effective HR policies that you have experienced or are aware of. What do you think made them effective?

EMPLOYABILITY AND HR The HR department is likely to be your first contact with a potential employer, an important part of your tenure, and when the time comes to leave, HR will probably be your last formal contact with the firm. Clearly understanding the function is important. But what you may not have thought about is that if you aspire to (or already are in) managerial positions, no matter what your vocation, HR management will be an important part of your job. A significant trend over the years has been

the passing to line managers the duties typically performed by human resources staff members who now usually act in a more consultancy-type role. It is commonplace that line managers will actually conduct, or play a significant part in, activities such as recruitment and selection, performance appraisals, training and development, rewards and employee relations. To succeed in a managerial career means succeeding as a HR manager (whether you are one or not!).

Selection practices One of the most important HR functions is hiring the right people. How do you figure out who the right people are? Identifying the right people is the objective of the selection process, which matches individual characteristics (ability, experience, and so on) with the requirements of the job.2 When management fails to get a proper match, employee performance and satisfaction both suffer. With more applications coming in the door than ever, it is paramount to ensure that your organization has an effective method for selecting the most qualified applicants. Unfortunately, technology has not been developed yet that can reliably sort through applications to identify the unique combinations of traits and experience that yield top performers. Even technology to inform applicants of their status in the hiring process is only in the early stages of development.3

How the selection process works Figure 17.1 shows how the selection process works in most organizations. Having decided to apply for a job, applicants go through several stages – three are shown in the figure – during which they can be rejected at any time. In practice, some organizations forgo some of these steps in the interests of time. A meat-packing plant may hire someone who walks in the door (there is not a long line of people who want to ‘thread’ a pig’s intestines for a living). But most organizations follow a process that looks something like this. Let’s go into a bit more detail about each of the stages.

Selection practices   491

Applicant applies for job.

Initial selection Goal: Use for preliminary ‘rough cuts’ to decide whether an applicant meets the basic qualifications for a job.

Applicants who don‘t meet basic qualifications are rejected.

Examples: Application forms, background checks Applicant meets basic qualifications.

Substantive selection Goal: Determine the most qualified applicants from among those who meet basic qualifications. Examples: Written tests, performance tests, interviews

Applicants who meet basic qualifications, but are less qualified than others, are rejected.

Applicant among best qualified.

Contingent selection Goal: Make final check before making offer to applicants. Examples: Drug tests, background check

Applicants who are among best qualified, but who fail contingent selection (positive drug test, unfavourable background check), are rejected.

Applicant receives job offer.

Figure 17.1  Model of selection processes in organizations

Initial selection 1  Identify the most useful initial selection methods.

Initial selection devices are the first information applicants submit and are used for preliminary ‘rough cuts’ to decide whether an applicant meets the basic qualifications for a job. Application forms and curriculum vitas (including letters of recommendation) are initial selection devices. We list background checks as either an initial selection device or a contingent selection device, depending on how the organization does it. Some organizations prefer to check into an applicant’s background right away. Others wait until the applicant is about ready to be hired, contingent on everything checking out. Still others seem barely to check anything, instead hiring friends and family. This practice is controversial, partly because it hurts workplace diversity, which has been shown to increase organizational performance.4 And some companies deliberately set out to hire applicants who wouldn’t pass background checks, like those with criminal backgrounds. These organizations value ‘second chances’ in their cultures and report that many of these workers become valuable contributors to their organizations and society. Such hires are not without risk, however, and so must be carefully managed.5

Application forms You’ve no doubt submitted your fair share of applications. By itself, the information submitted on an application form is not a very useful predictor of performance. However, it can be a good initial screen. For example, there’s no sense spending time interviewing an applicant for

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Perceptions of fairness in selection methods Human resource professionals have a dozen or more tools at their disposal in the applicant selection process. These include interviews, CVs/applications, cognitive ability tests, personality measurements, graphology, honesty tests and work samples. Assessments can be made in person, by telephone or online, and HR managers can rate them analytically or subjectively. But using the tools indiscriminately can cost the goodwill of candidates. Recent studies worldwide indicate that job candidates’ judgement of the fairness of selection methods heavily influences the likelihood of their accepting a job and recommending the company to others. Those who do not think the selection methods are fair are also more likely to sue the company. Perceptions of fairness differ by selection method and culture, but candidates worldwide perceive interviews most favourably and graphology (handwriting analysis), with the exception of France, unfavourably. Research indicates that European, US and Asian candidates consider work sample tests to be very fair, while those in India rate them unfavourably. US and Asian candidates seem more consistently favourable in their fairness perceptions of cognitive ability tests and personality assessments than Indian candidates. Researchers attribute the fairness perception differences to varying cultural contexts. For instance, Indian applicants favour methods that showcase personal characteristics (personal

glOBal

references, personality tests) over work-related assessments, perhaps because their culture does not emphasize personal privacy as strongly as more individualistic cultures. US candidates rate the use of personal contacts favourably, while Asians prefer written tests, perhaps because Asian hiring practices were not historically objective. This reason may also apply to the finding that US applicants favourably rate methods relying on subjective human interaction, while Asians rate practices using no direct interaction such as online testing as more fair. Finally, when the method solicits personal information, applicants in low power distance countries are more likely to question its fairness than applicants in high-power distance cultures where questioning authority is less acceptable. Research supports the use of a variety of assessments chosen for their applicability to the job. A big-picture approach to global recruitment should also include consideration of the candidates’ confidence in the organization’s fairness practices. Sources: G. W. Guimetti and E. F. Sinar, ‘Don’t you know me well enough yet? Comparing reactions of internal and external candidates to employment testing’, International Journal of Selection and Assessment, June 2012, pp. 139–47; T. G. Hoang, D. M. Truxillo, B. Erdogan and T. N. Bauer, ‘Cross-cultural Examination of applicant reactions to selection methods: United States and Vietnam’, International Journal of Selection and Assessment, June 2012, pp. 209–19; and J. Snyder and C. Shahani-Denning, ‘Fairness reactions to personnel selection methods: a look at professionals in Mumbai, India’, International Journal of Selection and Assessment, September 2012, pp. 297–307.

a registered nurse position if he or she doesn’t have the proper credentials (education, certification, experience). Many organizations encourage applicants to apply online. It takes only a few minutes and the form can be forwarded to the people responsible for making the hiring decision. Most major corporations have a career page on their websites where prospective employees can search for available positions by location or job type and then apply online. These days, you are more likely to email or upload your CV than send anything by mail, and applicants are beginning to favour creating video CVs. Recent research in the Netherlands suggested that applicants from minority ethnic groups (Turkish and Moroccan) preferred the personal nature of the video résumé.6 Be careful about what you put on your online applications. Many human resource departments, faced with an overwhelming number of electronic submissions, are using software to prescreen candidates based on keyword matches between applications and the qualifications needed for the job. Their software often seeks to screen out unacceptable candidates rather than select potentially good ones. While you will want to incorporate all the keywords that accurately describe your experience, including paid and volunteer work,7 do use whatever prompts you are given to outline the personal characteristics that qualify you.8 It’s important that organizations be careful about the questions they ask on applications. Questions about age, race, gender, sexuality and nationality are disallowed in most European countries. However, there are numerous ‘grey areas’. For example, in the UK there is some debate whether a minimum number of years of relevant job experience can be asked. The reason being that if an employer specifies more than, for instance, 10 years of experience, then younger workers will be excluded which potentially breaches discrimination laws.

Selection practices   493

Background checks

Alvey & Towers Picture Library/Alamy

Considering that one survey found some 34 per cent of job applications contain outright lies about experience, education and abilities and 2 per cent of CVs are almost totally fictitious, it is no wonder that background checks are conducted by most companies. And for some jobs, such as those working with children, a background check may be legally required. There have been some high-profile lapses that illustrate the importance of background checks, such as an English National Health Service Chief Executive being forced to resign after he made up his degree qualifications. But the reasons for thorough checks on applications and references are more generally applicable: firms want to know how an applicant did in past jobs and whether former employers would recommend hiring the person. The problem is that rarely do former employers provide useful information. In fact, nearly two-thirds of employers refuse to provide detailed reference information on applicants. Why? They are afraid of being sued for saying something bad about a former employee. Although this concern is often unfounded (employers are safe as long as they stick to documented facts) most employers play it safe. The result is a paradox: most employers want reference information, but few will give it out. There are also other problems. Job applicants may come from anywhere in Europe (or beyond) and there are practical problems such as language, legal variations and cultural differences that often mean getting reliable (or any) information about candidates can be difficult, costly and time consuming. Letters of recommendation are another form of background check. These also aren’t as useful as they may seem. Applicants select references who will write good things about them, so almost all letters of recommendation are positive. In the end, readers either ignore them or read ‘between the lines’ to try to find hidden meaning. Many employers look for candidates online through a general internet search or through a targeted search on social networking sites. The legality of this practice has come into question, but there is no doubt that many employers include an electronic search to see whether

NCP (National Car Parks) is the UK’s largest commercial car park operator and provider of on-street parking enforcement. NCP conducted background checks to make sure all 150 wardens working for London’s Lambeth Council had the right to work in the UK when it took over the contract from another firm. The result was startling. When it became known, almost a third of the parking wardens either resigned or just didn’t turn up for work.9

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candidates have any history that might make them a dubious choice for employment. For some potential employees, an embarrassing or incriminating photo circulated through Facebook may make it hard to get a job. On the other hand, a recent study found that independent raters viewing candidate Facebook profiles were able to accurately determine candidate conscientiousness, agreeability and intelligence that later translated into job performance scores as rated by supervisors.10

Substantive selection 2  Identify the most useful substantive selection methods.

If an applicant passes the initial screens, next are substantive selection methods. These are the heart of the selection process and include written tests, performance tests and interviews.

Written tests Long popular as selection devices, written tests (traditionally ‘paper-and-pencil’ tests – though many are now electronic and available online) suffered a general decline in use between the late 1960s and mid-1980s. They were frequently characterized as discriminatory, and many organizations had not validated them as job-related. The past 20 plus years, however, have seen a resurgence in their use. Testing has evolved significantly. It has become increasingly sophisticated, but easier to use, because of technological advances. Managers have come to recognize that there are valid tests available and they can be helpful in predicting who will be successful on the job.11 Kimberly-Clark is an enthusiastic advocate of online testing. Having introduced the process in both its graduate and executive recruitment programmes, the company claims to have slashed recruitment and selection costs, streamlined its administrative processes and improved both internal communications and its feedback to job applicants.12 Applicants, however, tend to view written tests as less valid and fair than interviews or performance tests.13 Typical written tests include (1) intelligence or cognitive ability tests, (2) personality tests, (3) integrity tests and (4) interest inventories. Tests of intellectual ability, spatial and mechanical ability, perceptual accuracy and motor ability have proven to be valid predictors for many skilled, semi-skilled and unskilled operative jobs in industrial organizations.14 Intelligence tests have proven to be particularly good predictors for jobs that include cognitively complex tasks.15 Many experts say intelligence tests are the single best selection measure across jobs and that they are at least as valid in the European Union as in the United States where many of these tests originate.16 Some innovative employers are pioneering the use of tests designed to assess how a person thinks. Google, for instance, may ask candidates, ‘A man pushed his car to a hotel and lost his fortune. What happened?’ Whether you answer, ‘The man was playing Monopoly’ or not, the important choice is to give a thoughtful response.17 Personality tests are inexpensive and simple to administer and their use has grown. The traits that best predict job performance are conscientiousness and positive self-concept.18 This makes sense in that conscientious people tend to be motivated and dependable, and positive people are ‘can-do’ oriented and persistent. However, concerns about applicants faking responses remain, partly because it’s fairly easy to claim to be hard-working, motivated and dependable when asked in a job application setting and partly because applicants aren’t always aware they are faking.19 A recent study of Croatian university students suggested that individuals can be partially successful in faking a desirable profile.20 Another study in China indicated that the use of warning messages for potential faking behaviour may help curb the behaviour, but practical application for selection processes would be controversial.21 Two reviews of studies comparing self-reported personality to observer-rated personality found that observer ratings are better predictors of job performance and other behaviours.22 Thus, employers might want to consider asking employment references about an applicant’s personality as part of the screening process. As ethical problems have increased, integrity tests have gained popularity. These paper-and-pencil tests measure factors such as dependability, carefulness, responsibility and honesty; they have proven to be powerful predictors of supervisory ratings of job performance and of theft, discipline problems and excessive absenteeism.23 However, recent

Selection practices   495

research indicates the many available tests do not all predict job performance outcomes equally well. Managers must be careful to choose one that measures criteria matched to the job responsibilities.24

Performance-simulation tests

work sample test Hands-on simulations of part or all of the work that applicants for routine jobs must perform.

assessment centres A set of performancesimulation tests designed to evaluate a candidate’s managerial potential.

What better way to find out whether applicants can do a job successfully than by having them do it? That’s precisely the logic of performance-simulation tests. Although they are more complicated to develop and administer than written tests, performance-simulation tests have higher face validity (which measures whether applicants perceive the measures to be accurate), and their popularity has increased. The three best-known are work samples, assessment centres and situational judgement tests. Work sample tests are hands-on simulations of part or all of the job that must be performed by applicants. By carefully devising work samples based on specific job tasks, management determines the knowledge, skills and abilities needed for each job. Then each work sample element is matched with a corresponding job performance element. Work samples are widely used in the hiring of skilled workers, such as welders, machinists, carpenters and electricians. For instance, job candidates for production jobs at BMW’s factory have 90 minutes to perform a variety of typical work tasks on a specially built simulated assembly line.25 Work samples yield validities superior to written aptitude and personality tests.26 A more elaborate set of performance-simulation tests, specifically designed to evaluate a candidate’s managerial potential, are administered in assessment centres. In these tests, line managers, supervisors and/or trained psychologists evaluate candidates as they go through one to several days of exercises that simulate real problems they would confront on the job.27 For instance, a candidate might be required to play the role of a manager who must decide how to respond to 10 memos in an in-basket within a two-hour period. One survey suggests that employers rate the effectiveness of assessment centres. More than 9 out of 10 employers using assessment centres believe they are a very (47 per cent) or fairly (48 per cent) effective means of recruiting staff to fill vacancies.28 To reduce the costs of job simulations, many organizations have started to use situational judgement tests which ask applicants how they would perform in a variety of job situations and then compare their answers to those of high-performing employees.29 Coaching can improve scores on these tests, however, raising questions about whether scores reflect true judgement or merely test preparation.30 One study comparing situational judgement tests to assessment centres found the assessment centre was a better predictor of job performance, although the difference was not large.31 Ultimately, the lower cost of the situational judgement test may make it a better choice for some organizations than a more elaborate work sample or assessment centre. Employers are increasingly using work sample methods that go beyond assessment testing into the realm of actual work performed and evaluated. These are sometimes known as realistic job previews or job tryouts and they are given as a way to assess talent versus experience. Experts are finding they also decrease turnover because both employers and new hires know what they are getting into ahead of time.32 When George McAfee applied for a vice president position in the tech industry, he was required to give presentations, conduct research and hold talks with executives about their ongoing business concerns for over a week, all unpaid. He felt the employer was taking advantage of his free labour, but he said, ‘You just have to accept that and not be offended.’33 Human resources managers may risk losing qualified candidates who object to extensive testing and withdraw from the process. Those who identify with an organization’s mission, people or products will be less likely to withdraw, suggesting that HR managers should seek to engage candidates with the organization early in the selection process.34

Interviews Of all the selection devices organizations around the globe use to differentiate candidates, the interview remains the most common.35 It also tends to have a disproportionate amount of influence. Overreliance on interviews is problematic because extensive evidence shows that

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impression management techniques like self-promotion have a strong effect on interviewer preferences even when unrelated to the job.36 Conversely, the candidate who performs poorly in the employment interview is likely to be cut from the applicant pool regardless of experience, test scores or letters of recommendation. And unfortunately, candidates can be rated lower for something as trivial as a blemish on their faces, a recent study found.37 These findings are important because of the unstructured manner in which the selection interview is frequently conducted.38 The unstructured interview – short in duration, casual and made up of random questions – is not a very effective selection device.39 The data gathered from such interviews are typically biased and often only modestly related to future job performance. Still, managers are reluctant to use structured interviews in place of their favourite pet questions (such as ‘If you could be any animal, what would you be, and why?’).40 Without structure, a number of biases can distort interview results. These biases include interviewers tending to favour applicants who share their attitudes, giving unduly high weight to negative information and allowing the order in which applicants are interviewed to influence evaluations.41 Using a standardized set of questions, providing interviewers with a uniform method of recording information and standardizing the rating of the applicant’s qualifications reduce the variability of results across applicants and enhance the validity of the interview as a selection device. Training interviewers to focus on specific dimensions of job performance, practising evaluation procedures of candidates and giving interviewers feedback on how well they focused on job-relevant characteristics significantly improves the accuracy of their ratings.42 Interview effectiveness also improves when employers use behavioral structured interviews, probably because these assessments are less influenced by interviewer biases.43 These interviews require applicants to describe how they handled specific problems and situations in previous jobs, based on the assumption that past behaviour offers the best predictor of future behaviour. Panel interviews also minimize the influence of individual biases and have higher validity.

‘It’s first impressions that count’ This statement is true. When we meet someone for the first time, we notice a number of things about that person: physical characteristics, clothes, firmness of handshake, gestures, tone of voice and the like. We then use these impressions to fit the person into ready-made categories. And these first ­impressions tend to hold greater weight than information received later. The best evidence about first impressions comes from research on employment interviews. Findings clearly demonstrate that first impressions count. One study suggested that

MYTH OR SCIENCE? interviewers often know whether they will hire someone soon after the opening handshake and small talk.44 Research on applicant appearance confirms the power of first impressions.45 Attractive applicants fare better in interviews and overweight applicants are penalized. Another body of confirming research finds that interviewers’ post-interview evaluations of applicants conform, to a substantial degree, to their pre-interview impressions.46 That is, those first impressions carry considerable weight in shaping the interviewers’ final evaluations, assuming that the interview elicits no highly negative information.

In practice, most organizations use interviews for more than a ‘prediction-of-performance’ device47 but also to assess applicant–organization fit. So, in addition to evaluating specific, job-related skills, effective managers look at personality characteristics and personal values to find individuals who fit the organization’s culture and image.

Contingent selection 3 Define contingent selection.

If applicants pass the substantive selection methods, they are basically ready to be hired, contingent on a final check. One contingent method is a drug test. A UK study found 13 per cent of employers carry out pre-employment drug tests and although figures in most other European countries are non-existent, it is generally agreed the practice is increasing.

Aflo/REX Shutterstock

Training and development programmes   497

‘A deal’s been done, subject to a medical.’ These are words commonly heard in relation to professional sports. A medical test is a contingent selection method that aims to determine whether an applicant is physically or mentally able to do the job. When Gareth Bale signed for Real Madrid his move was contingent on the outcome of a medical.

In some countries it is illegal, such as the Netherlands, and in others such as Belgium, pre-­ employment drug testing can only occur in safety-critical jobs (for example, airline pilots or bus drivers).48 Drug testing is controversial. Many applicants think it is unfair or invasive to test them without reasonable suspicion. Such individuals likely believe that drug use is a private matter and applicants should be tested on factors that directly bear on job performance, not lifestyle issues that may or may not be job relevant. Employers might counter this view with the argument that drug use and abuse are extremely costly, not just in terms of financial resources but in terms of people’s safety. Despite the controversy over drug testing, it’s probably here to stay. Firms can usually not enquire about a candidate’s medical history until after a job offer is made. A medical test aims to determine whether an applicant is physically or mentally able to do the job. Employers also sometimes use medical exams to find out whether and how they can accommodate employees with disabilities. For jobs requiring exposure to heavy physical or psychological demands, such as air traffic controllers or firefighters, medical exams are obviously an important indicator of the ability to perform.

Training and development programmes 4  Compare the four main types of training.

Competent employees don’t remain competent for ever. Skills deteriorate and can become obsolete and new skills need to be learned. That’s why organizations collectively spend billions of euros each year on formal training.

Types of training Training can include everything from teaching employees basic reading skills to conducting advanced courses in executive leadership. Here we discuss four general skill categories – basic

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Employee training in Europe ●

Although it is difficult to find accurate figures and taking into account that the amount of training fluctuates significantly each year, the corporate and government spend for training activities in Europe is estimated to be around €80 billion per year.

●

Highly skilled employees receive the most training giving them an even greater advantage over those with lesser skills.

●

On average, 37 per cent of EU employees receive training in the course of their work. However, over half of the

FACE THE FACTS employees in Finland, the Netherlands, Slovenia and Sweden had training over the previous 12 months whereas fewer than one in five had done so in Bulgaria, Greece, Montenegro and Turkey. ●

Nearly 90 per cent of employees who received ­employerpaid training agreed that it had improved the way they work. Around 70 per cent believed that following the training their job was more secure and their prospects for future employment were better.49

literacy, technical skills, interpersonal skills and problem-solving skills. In addition, we discuss civility and ethics training.

Basic skills You may be surprised to learn of the scale of this issue. Of the western European countries, the UK ranks particularly poorly. One in three employers has to send staff for remedial training to teach them basic numeracy and maths skills. Two-fifths of organizations had serious concerns about the basic literacy skills of their employees, with some staff unable to write in sentences, spell correctly or use accurate grammar.50 This problem, of course, isn’t unique to the United Kingdom. It’s a worldwide problem – from the most developed countries to the least.51 For many undeveloped countries widespread illiteracy means there is almost no hope of competing in a global economy. Organizations increasingly have to teach basic reading and numeracy skills to their employees. For instance, McDonald’s operates seven ‘Hamburger Universities’ internationally. Along with the leadership, business management and restaurant operations classes are basic skills courses in literacy and maths. Northern Foods also offers basic skills courses including literacy, maths and languages. One reason for doing so is claimed to be that better skilled workers gain confidence in themselves and their work, which ultimately means a better bottom line for business.52

Technical skills Most training is directed at upgrading and improving an employee’s technical skills. Technical training has become increasingly important today for two reasons – new technology and new structural designs in the organization. Jobs change as a result of new technologies and improved methods. For instance, many auto repair personnel have had to undergo extensive training to fix and maintain recent models with computer-monitored engines, electronic stabilizing systems, GPS, keyless remote entry and other innovations. Similarly, computer-controlled equipment has required millions of production employees to learn a whole new set of skills.53 In addition, technical training has become increasingly important because of changes in organization design. As organizations flatten their structures, expand their use of teams and break down traditional departmental barriers, employees need mastery of a wider variety of tasks and increased knowledge of how their organization operates. For instance, the restructuring of jobs at Miller Brewing Co. around empowered teams has led management to introduce a comprehensive business literacy programme to help employees better understand competition, the state of the beer industry, where the company’s revenues come from, how costs are calculated and where employees fit into the company’s value chain.54

Interpersonal skills Almost all employees belong to a work unit, and their work performance depends to some degree on their ability to effectively interact with their co-workers and their boss. Some

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employees have excellent interpersonal skills, but others require training to improve theirs. This includes learning how to be a better listener, how to communicate ideas more clearly and how to be a more effective team player. This type of training is common in organizations because of the obvious importance of these skills, however, most evidence suggests that skills learned in such training do not readily transfer back to the workplace.55

Problem-solving skills Problem-solving training for managers and other employees can include activities to sharpen their logic, reasoning and problem-defining skills as well as their abilities to assess causation, develop and analyse alternatives and select solutions. Problem-solving training has become a part of almost every organizational effort to introduce self-managed teams or implement quality-management programmes.

Civility training As human resource managers have become increasingly aware of the effects of social behaviour in the workplace, they have paid more attention to the problems of incivility, bullying and abusive supervision in organizations. Examples of incivility include being ignored, being excluded from social situations, having your reputation undermined in front of others, and experiencing other actions meant to demean or disparage. Researchers have shown that these forms of negative behaviour can decrease satisfaction, reduce job performance, increase perceptions of unfair treatment, increase depression and lead to psychological withdrawal from the workplace.56 Is there anything managers can do to minimize incivility, bullying and abusive supervision? One possibility is training specifically targeted to building civility by having directed conversations about it and supporting the reduction of incivility on an ongoing basis. Following a training intervention based on these principles, co-worker civility, respect, job satisfaction and management trust increased, while supervisor incivility, cynicism and absences decreased.57 Thus, the evidence suggests that deliberate interventions to improve the workplace climate for positive behaviour can indeed minimize the problems of incivility.

Ethics training Ethics training has increased considerably across Europe since the millenium.58 Society is now more aware of the impact that business has on the environment. And high profile scandals such as Parmalat, the Siemens bribery case, and the role of banks in the global financial crisis have raised the profile of ethical issues. This training may be included in a newly hired employee’s orientation programme, made part of an ongoing developmental training programme or provided to all employees as a periodic reinforcement of ethical principles.59 But the jury is still out on whether you can actually teach ethics.60 Critics argue that ethics are based on values, and value systems are learned by example at an early age. By the time employees are hired, their ethical values are fixed. Some research does suggest ethics training does not have a significant long-term effect on participants’ values and even that exposure to business and law school programmes decreases students’ level of ­prosocial ethical values.61 Supporters of ethics training say values can be learned and changed after early childhood. And even if they couldn’t, ethics training helps employees recognize ethical dilemmas and become more aware of the ethical issues underlying their actions. It also reaffirms an organiz­ ation’s expectations that members will act ethically. Individuals who have greater exposure to organizational ethics codes and ethics training do tend to be more satisfied and perceive their organizations as more socially responsible, so ethics training does have some positive effects.62

Training methods 5  Contrast formal and informal training methods.

Historically, training meant ‘formal training’, planned in advance and having a structured format. However, most workplace learning takes place in informal training – unstructured, unplanned and easily adapted to situations and individuals. In reality, most informal training

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6  Contrast on-thejob and off-the-job training.

is nothing other than employees helping each other out, sharing information and solving work-related problems together. Thus, many managers are now supportive of what used to be considered ‘idle chatter’. On-the-job training includes job rotation, apprenticeships, understudy assignments and formal mentoring programmes. But the primary drawback of these on-the-job training methods is that they often disrupt the workplace. Off-the-job training includes activities such as live classroom lectures, public seminars, self-study programmes, internet courses, webinars, podcasts and group activities that use role-plays and case studies. Larger organizations are increasingly building ‘Corporate Universities’ to house formal training programmes. The formal instruction given in the corporate university classes are often supplemented with informal online training.63 The fastest-growing means for delivering training is probably computer-based training, or e-training.64 E-learning systems emphasize learner control over the pace and content of instruction, allow e-learners to interact through online communities and incorporate other techniques such as simulations and group discussions. Computer-based training that lets learners actively participate in exercises and quizzes can be more effective than traditional classroom instruction.65 Recent research has also highlighted the ways in which computer-based training can be improved by providing learners with regular prompts to set goals for learning, use effective study strategies and measure progress towards their learning goals.66 Organizations are even exploring delivering e-training through microlessons, on-the-spot tips and learning games sent to mobile devices.67 On the positive side, e-training increases flexibility because organizations can deliver materials anywhere, any time. It seems fast and efficient. On the other hand, it’s expensive to design self-paced, online materials; employees miss the social interaction of a classroom; online learners are more susceptible to distractions; and ‘clicking through’ training without engaging in practice activities provides no assurance that employees have actually learned.68

Evaluating effectiveness The effectiveness of a training programme can refer to the level of student satisfaction, the amount students learn, the extent to which they transfer the material from training to their jobs, or the financial return on investments in training.69 These results are not always related. Some people who have a positive experience in an upbeat, fun class learn very little; some who learn a great deal have difficulty figuring out how to use their knowledge at work; and changes in employee behaviour are often not large enough to justify the expense of training. This means rigorous measurement of multiple training outcomes should be a part of every training effort. The success of training also depends on the individual. If individuals are unmotivated, they will learn very little. What creates training motivation? Personality is important: those with an internal locus of control, high conscientiousness, high cognitive ability and high self-efficacy learn more. The climate also is important: when trainees believe there are opportunities and resources to let them apply their newly learned skills, they are more motivated and do better in training programmes.70 Finally, after-training support from supervisors and co-workers has a strong influence on whether employees transfer their learning into new behaviour.71 For a training programme to be effective, it must not just teach the skills, but also change the work environment to support the trainees.

Performance evaluation 7  List the methods of performance evaluation.

Would you study differently or exert a different level of effort for a university course graded on a pass–fail basis than for one that awarded letter grades from A to F? Students typically tell us they study harder when letter grades are at stake. In addition, when they take a course on a pass–fail basis, they tend to do just enough to ensure a passing grade.

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This finding illustrates how performance evaluation systems influence behaviour. Major determinants of your in-class behaviour and out-of-class studying effort at university are the criteria and techniques your instructor uses to evaluate your performance. What applies in the university context also applies to employees at work. In this section, we show how the choice of a performance evaluation system and the way it’s administered can be an important force influencing employee behaviour.

What is performance? In the past, most organizations assessed only how well employees performed the tasks listed on a job description, but today’s less hierarchical and more service-oriented organizations require more. Researchers now recognize three major types of behaviour that constitute performance at work: task performance The combination of effectiveness and efficiency at doing your core job tasks. citizenship Actions that contribute to the psychological environment of the organization, such as helping others when not required. counterproductivity Actions that actively damage the organization, including stealing, behaving aggressively towards co-workers, or being late or absent.

1. Task performance. Performing the duties and responsibilities that contribute to the produc-

tion of a good or service or to administrative tasks. This includes most of the tasks in a conventional job description. 2. Citizenship. Actions that contribute to the psychological environment of the organization,

such as helping others when not required, supporting organizational objectives, treating co-workers with respect, making constructive suggestions and saying positive things about the workplace. 3. Counterproductivity. Actions that actively damage the organization. These behaviours

include stealing, damaging company property, behaving aggressively towards co-workers and taking avoidable absences. Most managers believe good performance means doing well on the first two dimensions and avoiding the third.72 A person who does core job tasks very well but is rude and aggressive towards co-workers is not going to be considered a good employee in most organizations, and even the most pleasant and upbeat worker who can’t do the main job tasks well is not going to be a good employee.

Purposes of performance evaluation Performance evaluation serves a number of purposes.73 One is to help management make general human resource decisions about promotions, transfers and terminations. Evaluations also identify training and development needs. They pinpoint employee skills and competencies for which remedial programmes can be developed. Finally, they provide feedback to employees on how the organization views their performance and are often the basis for reward allocations, including merit pay increases. Each of these functions of performance evaluation is valuable. Yet their importance to us depends on the perspective we’re taking. Several are clearly relevant to human resource management decisions. But our interest is in organizational behaviour. As a result, we shall be emphasizing performance evaluation as a mechanism for providing feedback and as a determinant of reward allocations.

What do we evaluate? The criteria management chooses to evaluate will have a major influence on what employees do. The three most popular sets of criteria are individual task outcomes, behaviours and traits.

Individual task outcomes If ends count, rather than means, then management should evaluate an employee’s task outcomes. Using task outcomes, a plant manager could be judged on criteria such as quantity produced, scrap generated and cost per unit of production. Similarly, a salesperson could be assessed on overall sales volume in the territory, euro increase in sales and the number of new accounts established.

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Research found that ‘warmth’ traits such as being caring and likeable strongly correlate to whether the public will vote for a candidate seeking public office. Consequently, demonstrating improvements in these traits are used by political parties to evaluate elected politicians and potential election candidates.74

Behaviours It is difficult to attribute specific outcomes to the actions of employees in advisory or support positions or employees whose work assignments are part of a group effort. We may readily evaluate the group’s performance, but if it is hard to identify the contribution of each group member, management will often evaluate the employee’s behaviour. A plant manager might be evaluated on promptness in submitting monthly reports or leadership style, and a salesperson on average number of contact calls made per day or sick days used per year. Measured behaviours needn’t be limited to those directly related to individual productivity. As we pointed out in discussing organizational citizenship behaviour (see Chapters 1 and 4), helping others, making suggestions for improvements and volunteering for extra duties make work groups and organizations more effective and often are incorporated into evaluations of employee performance.

Traits The weakest criteria, because they’re furthest removed from actual job performance, are individual traits.75 Having a good attitude, showing confidence, being dependable, looking busy, or possessing a wealth of experience may or may not be highly correlated with positive task outcomes, but it’s naive to ignore the reality that organizations still use such traits to assess job performance.

Who should do the evaluating? Who should evaluate an employee’s performance? By tradition, the task has fallen to the manager because they are held responsible for their employees’ performance. But others may do the job better.

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With many of today’s organizations using self-managed teams, teleworking and other organizing devices that distance bosses from their employees, an employee’s immediate superior may not be the most reliable judge of that employee’s performance. Thus, in more and more cases, peers and even subordinates are being asked to participate in the performance evaluation process. Also, increasingly, employees are participating in their own performance evaluation. For instance, one survey found that about half of executives and 53 per cent of employees now have input into their performance evaluations.76 As you might surmise, self-evaluations often suffer from overinflated assessment and self-serving bias. Moreover, self-evaluations are often low in agreement with superiors’ ratings.77 Because of these drawbacks, self-evaluations are probably better suited to developmental than evaluative purposes and should be combined with other sources of information to reduce rating errors. In most situations it is highly advisable to use multiple sources of ratings. Any individual performance rating may say as much about the rater as about the person being evaluated. By averaging across raters, we can obtain a more reliable, unbiased and accurate performance evaluation. A popular approach to performance evaluation is the use of 360-degree evaluations.78 These provide performance feedback from the full circle of daily contacts that an employee might have, ranging from mailroom personnel to customers to bosses to peers (see Figure 17.2). The number of appraisals can be as few as 3 or 4 or as many as 25; with most organizations collecting 5 to 10 per employee. More and more employers are using 360-degree programmes. Some of them are Virgin Atlantic, Unipart, Booking.com, JCB, Google and GlaxoSmithKline. What’s their appeal? By relying on feedback from co-workers, customers and subordinates, these organizations are hoping to give everyone more of a sense of participation in the review process and gain more accurate readings on employee performance. The evidence on the effectiveness of 360-degree evaluations, however, is mixed.79 It provides employees with a wider perspective of their performance. But it also has the potential for being misused. For instance, to minimize costs, many organizations don’t spend the time to train evaluators in giving constructive criticism. Some organizations allow employees

The primary objective of the 360-degree performance evaluation is to pool feedback from all of the employee’s customers. Top management (Internal customer) Manager (Internal customer)

Suppliers (External customer)

Employee Subordinates (Internal customer)

Co-workers or team members (Internal customer)

Clients (External customer)

Other department representatives (Internal customer)

Figure 17.2  360-degree evaluations Source: Based on J.F. Millman and A.R. Zawacki, ‘Companies evaluate employees from all perspectives’, Personnel Journal, 73, 11 (November 1994), p. 100.

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to choose the peers and subordinates who evaluate them, which can artificially inflate feedback. Problems also arise from the difficulty of reconciling disagreements and contradictions between rater groups. There is clear evidence that peers tend to give much more lenient ratings than supervisors or subordinates, and peers also tend to make more errors in appraising performance.

Round-the-clock performance review: why some companies are saying goodbye to annual performance reviews Traditionally, companies have used the annual performance review system to keep employees accountable, rewarding those that excel and tracking performance over time. But many companies are realizing that performance reviews cause as many problems as they try to solve. Instead of guiding managers to offer honest feedback to their teams and coach employees, companies are actually training them to ‘make the most of available resources’ or ‘cover their bases’. Some have discovered that traditional incentive systems are failing to propel the best employees forward. A survey report by Deloitte says, ‘Today’s widespread ranking – and ratings – based performance management is damaging employee engagement, alienating high performers, and costing managers valuable time . . . Leading organisations are scrapping the annual evaluation cycle and replacing it with ongoing feedback and coaching designed to promote continuous employee development.’

OB IN THE NEWS

Organizations such as Accenture, Deloitte and Cisco are among a handful of companies that have jettisoned the bell curve-based annual appraisal system and have opted for an always-on appraisal system which is ongoing and real time. These companies have joined the likes of Microsoft and Adobe, which have also realized that the traditional way of conducting performance reviews is ineffective. But will these new systems be any better? Caution is needed before it is known how well the new alternatives are able to assess and differentiate performance objectively and accurately. Source: Adapted from Sangeeta Tanwar, Business Standard, 14 March 2016. Available at http://www.business-standard.com/article/management/round-the-clockperformance-review-116031300631_1.html.

Methods of performance evaluation The previous sections explained what we evaluate and who should do the evaluating. Now we ask: How do we evaluate an employee’s performance? That is, what are the specific techniques for evaluation?

Written essays Probably the simplest method of evaluation is to write a narrative describing an employee’s strengths, weaknesses, past performance, potential and suggestions for improvement. The written essay requires no complex forms or extensive training to complete. But, with this method, a useful appraisal may be determined as much by the evaluator’s writing skill as by the employee’s actual level of performance. It’s also difficult to compare essays for different employees (or for the same employees written by different managers) because there is no standardized scoring key. critical incidents A way of evaluating the behaviours that are key in making the difference between executing a job effectively and executing it ineffectively.

Critical incidents Critical incidents focus the evaluator’s attention on the behaviours that are key in making

the difference between executing a job effectively and executing it ineffectively. That is, the appraiser writes down anecdotes that describe what the employee did that was especially effective or ineffective. The key here is to cite only specific behaviours, not vaguely defined personality traits. A list of critical incidents provides a rich set of examples from which the employee can be shown the behaviours that are desirable and those that call for improvement.

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Graphic rating scales graphic rating scales An evaluation method in which the evaluator rates performance factors on an incremental scale. behaviourally anchored rating scales (BARS) Scales that combine major elements from the critical incident and graphic rating scale approaches: the appraiser rates the employees based on items along a continuum, but the points are examples of actual behaviour on the given job rather than general descriptions or traits. forced comparison Method of performance evaluation where an employee’s performance is made in explicit comparison to others (e.g., an employee may rank third out of ten employees in her work unit). group order ranking An evaluation method that places employees into a particular classification, such as quartiles. individual ranking An evaluation method that rank-orders employees from best to worst.

8  Show how managers can improve performance evaluations.

One of the oldest and most popular methods of evaluation is the use of graphic rating scales. In this method, a set of performance factors, such as quantity and quality of work, depth of knowledge, cooperation, attendance and initiative, is listed. The evaluator then goes down the list and rates each on incremental scales. The scales may specify five points, so a factor such as job knowledge might be rated 1 (‘poorly informed about work duties’) to 5 (‘has complete mastery of all phases of the job’). Although they don’t provide the depth of information that essays or critical incidents do, graphic rating scales are less time-consuming to develop and administer. They also allow for quantitative analysis and comparison.

Behaviourally anchored rating scales Behaviourally anchored rating scales (BARS) combine major elements from the critical incident

and graphic rating scale approaches: the appraiser rates the employees based on items along a continuum, but the points are examples of actual behaviour on the given job rather than general descriptions or traits. Examples of job-related behaviour and performance dimensions are found by asking participants to give specific illustrations of effective and ineffective behaviour regarding each performance dimension. These behavioural examples are then translated into a set of performance dimensions, each dimension having varying levels of performance.

Forced comparisons Forced comparisons evaluate one individual’s performance against the performance of another or others. It is a relative, rather than an absolute, measuring device. The two most popular comparisons are group order ranking and individual ranking. The group order ranking requires the evaluator to place employees into a particular classification, such as top one-fifth or second one-fifth. This method is often used in recommending students to graduate schools. Evaluators are asked whether the student ranks in the top 5 per cent of the class, the next 5 per cent, the next 15 per cent and so forth. But in this type of performance appraisal, managers deal with all their subordinates. Therefore, if a rater has 20 employees, only four can be in the top fifth and, of course, four must also be relegated to the bottom fifth. The individual ranking approach rank-orders employees from best to worst. If the manager is required to appraise 30 employees, this approach assumes that the difference between the first and second employee is the same as that between the twenty-first and twenty-second. Even though some of the employees may be closely grouped, no ties are permitted. The result is a clear ordering of employees, from the highest performer down to the lowest.

Suggestions for improving performance evaluations The performance evaluation process is a potential minefield of problems. For instance, evaluators can unconsciously inflate evaluations (positive leniency), understate performance (negative leniency), or allow the assessment of one characteristic to unduly influence the assessment of others (the halo error). Some appraisers bias their evaluations by unconsciously favouring people who have qualities and traits similar to their own (the similarity error). And some evaluators see the evaluation process as a political opportunity to overtly reward or punish employees they like or dislike. A review of the literature and several studies on performance appraisals demonstrates that many managers deliberately distort performance ratings in order to maintain a positive relationship with their subordinates or to achieve a positive image of themselves by showing that all their employees are performing well.80 Although there are no protections that will guarantee accurate performance evaluations, the following suggestions can make the process more objective and fair.

Use multiple evaluators As the number of evaluators increases, the probability of attaining more accurate information increases, as does the likelihood that the employee will accept the feedback as valid.81 If rater

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error tends to follow a normal curve, an increase in the number of appraisers will tend to find the majority congregating about the middle. We often see multiple evaluators in competitions in such sports as diving and gymnastics. A set of evaluators judges a performance, the highest and lowest scores are dropped, and the final evaluation is made up of those remaining. The logic of multiple evaluators applies to organizations as well. If an employee has had 10 supervisors, nine having rated her excellent and one poor, we can safely discount the one poor evaluation. Therefore, by moving employees about within the organization so as to gain a number of evaluations or by using multiple assessors (as provided in 360-degree appraisals), we increase the probability of achieving more valid and reliable evaluations.

Evaluate selectively Appraisers should evaluate only in areas in which they have some expertise.82 This precaution increases the interrater agreement and makes the evaluation a more valid process. It also recognises that different organizational levels often have different orientations towards those being rated and observe them in different settings. In general, therefore, appraisers should be as close as possible, in terms of organizational level, to the individual being evaluated. Conversely, the more levels that separate the evaluator and the person being evaluated, the less opportunity the evaluator has to observe the individual’s behaviour and, not surprisingly, the greater the possibility for inaccuracies.

Train evaluators If you can’t find good evaluators, the alternative is to make good evaluators. There is substantial evidence that training evaluators can make them more accurate raters.83 Most rater training courses emphasize changing the raters’ frame of reference by teaching them what to look for, so everyone in the organization defines good performance in the same way. Another effective training technique is to encourage raters to describe the employee’s behaviour in as much detail as possible. Providing more detail encourages raters to remember more about the employee’s performance, rather than just acting on their feelings about the employee at the moment.

Provide employees with due process The concept of due process can be applied to appraisals to increase the perception that employees are being treated fairly.84 Three features characterize due process systems: (1) individuals are provided with adequate notice of what is expected of them; (2) all evidence relevant to a proposed violation is aired in a fair hearing so the individuals affected can respond; and (3) the final decision is based on the evidence and free of bias. There is considerable evidence that evaluation systems often violate employees’ due process by providing them with infrequent and relatively general performance feedback, allowing them little input into the appraisal process, and knowingly introducing bias into performance ratings. However, when due process has been part of the evaluation system, employees report positive reactions to the appraisal process, perceive the evaluation results as more accurate, and express increased intent to remain with the organization.

Providing performance feedback Few activities are more unpleasant for many managers than providing performance feedback to employees. In fact, unless pressured by organizational policies and controls, managers are likely to ignore this responsibility. Why? First, even though almost every employee could stand to improve in some areas, managers fear confrontation when presenting negative feedback. Second, many employees do tend to become defensive when their weaknesses are pointed out. Instead of accepting the feedback as constructive and a basis for improving performance, some criticize the manager or redirect blame to someone else. Finally, employees tend to have an inflated assessment of their own performance. Statistically speaking, half of all employees must be below average performers. But the average employee’s estimate of his or her own

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performance level generally falls much higher. So even when managers are providing good news, employees are likely to perceive it as not good enough. The solution to the problem is not to ignore it but to train managers to conduct constructive feedback sessions. An effective review – in which the employee perceives the appraisal as fair, the manager as sincere, and the climate as constructive – can leave the employee feeling upbeat, informed about areas needing improvement and determined to correct them.85 It probably won’t surprise you that employees in a bad mood are much less likely to take advice than employees in a good mood.86 Appraisals should also be as specific as possible. People are most likely to overrate their own performance when asked about overall job performance, but they can be more objective when feedback is about a specific area.87 It’s also hard to figure out how to improve your performance globally – it’s much easier to improve in specific areas. In addition, the performance review should be a counselling activity more than a judgement process, best accomplished by allowing it to evolve from the employee’s own self-evaluation.

International variations in performance appraisal Let’s examine performance evaluation globally in the context of cultural dimensions: individualism/collectivism, a person’s relationship to the environment, time orientation and focus of responsibility. Individual-oriented cultures emphasize formal performance evaluation systems more than informal systems. They advocate written evaluations performed at regular intervals, the results of which managers share with employees and use in the determination of rewards. On the other hand, the collectivist cultures that dominate Asia and much of Latin America are characterized by more informal systems – downplaying formal feedback and disconnecting reward allocations from performance ratings. Some of these differences may be narrowing, however. In Korea, Singapore and Japan, the use of performance evaluation has increased dramatically in the past decade, though not always smoothly or without controversy. One survey of Korean employees revealed that a majority questioned the validity of their performance evaluation results.88 One recent study focused on the banking industry found significant differences across countries in performance appraisal practices.89 Formal performance appraisals were used more frequently in countries that were high in assertiveness, high in uncertainty avoidance and low in in-group collectivism. In other words, assertive countries that see performance as an individual responsibility, and that desire certainty about where people stand, were more likely to use formal performance appraisals. On the other hand, in high uncertainty avoidance cultures performance appraisals were also used more frequently for communication and development purposes (as opposed to being used for rewards and promotion). Another study found that individuals who were high in power distance and high in collectivism tend to give more lenient performance appraisals.90

The leadership role of HR 9  Describe the leadership role of HR in organizations.

We have discussed the important functions HR departments serve in selection practices, training and development and the performance evaluation process. Arguably, these are a business’s most important tasks in managing its most valuable asset – its people. However, HR also plays a key leadership role in nearly all facets of the workplace environment, from designing and administering benefit programmes to conducting attitude surveys to drafting and enforcing employment policies. HR is on the front line in managing adversarial employment conditions such as work–life conflicts, mediations, terminations and layoffs. HR is on the scene when an employee joins and leaves, and all along the way. HR departments uniquely represent both the employee’s and the company’s perspective as needed.

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Companies have only recently begun to recognize the potential for HR to influence employee performance. Researchers have been examining the effects of a high-performance work system (HPWS), a group of ‘mutually reinforcing, overlapping, and synergistic individual human resource practices’ that organizations have been developing. A recent study of 163 Spanish companies suggests that an HPWS can especially increase performance when the organiz­ ation has a learning culture.91 Another study found that employees’ perceptions of an HPWS aimed at promoting their ability, motivation and opportunity resulted in lowered absenteeism, increased intentions to stay and increased organizational citizenship behaviour.92 Because employers and employees alike benefit from strong human resource practices, let’s consider some of the leadership functions of human resources.

Designing and administering benefit programmes As we’ve seen throughout this book, employers are more willing than ever to consider an infinite range of benefits to offer employees in efforts to recruit and retain the best talent. For every issue facing workers – health, child care, ageing parents, education, workplace conditions and others – there exists a potential benefit organizations may consider to meet the need. The responsibility for designing and administering an organization’s benefit programme falls to the HR department, with input from executive management. Ideally, a benefit programme should be uniquely suited to the organizational culture, reflect the values of the organization, demonstrate economic feasibility, and be sustainable in the long term. Such benefits will likely improve employees’ psychological well-being and therefore increase organizational performance.93

Raveendran/AFP/Getty Images

Drafting and enforcing employment policies

Air India has a policy that cabin crew must not exceed a ‘normal’ Body Mass Index (BMI) that is set by the airline. When measured, 600 of the company’s 3,500 cabin crew were told that they needed to lose weight within six months or risk being grounded. When 130 of them failed the reassessment, they were relieved of their in-flight duties and given a job on the ground instead.

Along with benefits come responsibilities, and employees need to know what the organization expects from them. Employment policies that are informed by current laws but go beyond minimum requirements will help define a positive organizational culture. Policies differ from benefits in that they provide the guidelines for behaviour, not just the working conditions. For example a company might provide working mothers with infant children the benefit of a special break room but a policy is needed to outline the expectation for conduct. May mothers elect to feed their babies in other places in the facility, or only in the break room? What timing is acceptable? Establishing policies to address potential questions can help minimize confusion and awkwardness for all employees. This case is an example of a potential benefit and policy combination that will ensure employees recognize the benefit as an employer’s aid to their well-being while understanding how and where to use it. However, any policy must have enforcement to be effective. Human resource managers are responsible for setting the organizational consequences of infractions and often for enforcing policies as well.

Managing work–life conflicts We introduced work–life balance in Chapter 1 and discussed the forces that are blurring the lines between work life and

The leadership role of HR   509

personal life. In this section we want to elaborate on this issue – specifically focusing on what organizations can do to help employees reduce conflicts. Work–life conflicts grabbed management’s attention in the 1980s, largely as a result of the growing number of women with dependent children entering the workforce. In response, most major organizations took actions to make their workplaces more family friendly.94 They introduced programmes such as on-site child care, summer day camps, flexitime, job sharing, leaves for school functions, teleworking and part-time employment. But organizations quickly realized that work–life conflicts were not experienced only by female employees with children. Male workers and women without children were also facing this problem. Heavy workloads and increased travel demands, for instance, were making it increasingly hard for a wide range of employees to meet both work and personal responsibilities. A survey of nearly 1,000 fathers who have professional careers showed that the participants put more importance on job security and flexible, family-friendly working schedules than on high income and advancement opportunities.95 Organizations are modifying their workplaces with scheduling options and benefits to accommodate the varied needs of a diverse workforce. Employees at NestléPurina can bring their dogs into the office; SAS Institute has on-site child care, a health care centre and a fitness centre; and other firms offer perks ranging from onsite laundry to food services to free child care.96 Table 17.1 lists some initiatives to help employees reduce work–life conflicts. Time pressures aren’t the primary problem underlying work–life conflicts.97 The psychological incursion of work into the family domain – and vice versa – when people are worrying about personal problems at work and thinking about work problems at home creates conflict. Table 17.1  Work–life initiatives Strategy

Programme or policy

Time-based strategies

Flexitime Job sharing Part-time work Leave for new parents Teleworking Paid time off

Information-based strategies

Work–life support Relocation assistance Elder-care resources Counselling services

Money-based strategies

Insurance subsidies Flexible benefits Adoption assistance Discounts for child care tuition Direct financial assistance Domestic partner benefits Scholarships, tuition reimbursement

Direct services

On-site child care Fitness centre Concierge services Free or discounted company products

Culture-change strategies

Establishing work–life balanced culture; training managers to help employees deal with work–life conflicts Tie manager pay to employee satisfaction Focus on employees’ actual performance, not ‘face time’

Sources: Based on C.A. Thompson, ‘Managing the work-life balance: an introductory exercise’, Journal of Management Education, April 2002, p.210; and R. Levering and M. Maskowitz, ‘The best in the worst of times’, Fortune, 4 February 2002, pp.60-90.

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This suggests organizations should spend less effort helping employees with time-­management issues and more in helping them clearly segment their lives. Keeping workloads reasonable, reducing work-related travel and offering on-site quality child care are examples of practices that can help in this endeavour. Employees can also reduce interference between work and home by increasing the amount of planning they do.98 Not surprisingly, people differ in their preference for scheduling options and benefits.99 Some prefer organizational initiatives that better segment work from their personal lives, as flexitime, job sharing and part-time hours do by allowing employees to schedule work hours less likely to conflict with personal responsibilities. Other organizations prefer initiatives to integrate work and personal life, such as on-site child care, gym facilities and company-­sponsored family picnics. On average, most people prefer an organization that provides support for work–life balance. A study found that potential employees, particularly women, are more attracted to organizations that have a reputation for supporting employee work–life balance.100

Mediations, terminations and layoffs Human resource departments often take centre stage when unpleasant events such as disputes, substandard performance and downsizing occur. Employees need to be able to trust their human resource professionals to maintain appropriate confidentiality and a balanced perspective. Managers need to be able to trust HR, too, to know the laws and represent the company’s perspective. The human resource professional should be well trained in mediation techniques and rely upon company policies to seek positive resolution. Sometimes, human resource managers are integral to the termination process, when employees are not able to resolve issues with management. Termination processes may be subject to union labour contracts and laws, which can confound the situation. For departing employees, the HR department is often the last stop on their way out the door. Human resource managers are thus in charge of leaving a favourable impression with the employee and collecting helpful input from the exit interview. This is never more true than when organizations terminate employees in layoffs. Employees who think the layoff process was handled fairly are more apt to recommend the company to others and to return to work if asked.101 Employees who survive a layoff and stay employed with the company also evaluate the fairness of the downsizing process, according to another study, particularly in individualistic countries. Organizations that are able to demonstrate fairness are, therefore, more likely to make hoped-for financial gains from downsizing.102 In sum, the role of HR is increasing for organizations worldwide, and top management is realizing human resource leadership is needed to create the cultures and positive business outcomes top corporations need to stay competitive.

SUMMARY An organization’s human resource policies and practices create important forces that shape employee behaviour and attitudes. In this chapter, we specifically discussed the influence of selection practices, training and development programmes and performance evaluation systems.

IMPLICATIONS FOR MANAGERS ●

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An organization’s selection practices can identify competent candidates and accurately match them to the job and the organization. Consider assessment methods that are most likely to evaluate the skills directly needed for jobs you are looking to fill. Use training programmes for your employees to achieve direct improvement in the skills necessary to successfully complete the job. Employees who are motivated will use those skills for their greater productivity.

point/counterpoint   511 ●

●

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Training programmes increase an employee’s self-efficacy – that is, a person’s expectation that he or she can successfully execute the behaviours required to produce an outcome (see Chapter 6). Employees with high self-efficacy have strong expectations about their abilities to perform in new situations and are willing to exert the effort to get tasks done. Use performance evaluations to assess an individual’s performance accurately and as a basis for allocating rewards. Make sure the performance evaluations are as fair as possible. As demonstrated in Chapter 6 in our discussion of equity theory, evaluations perceived as unfair can result in reduced effort, increases in absenteeism or a search for another job. Give your employees the opportunity to participate in their evaluations so they understand the performance criteria and engage with the improvement process.

Social media is a great source of new hires

POINT/COUNTERPOINT

POINT Social media sites such as Facebook, LinkedIn and Twitter, and job boards like Monster.com, are indispensable in today’s marketplace for top talent. It’s true that an online presence with social media sites is a good way to sniff out fraud. Studies reveal that 45 per cent of today’s CVs contain at least one piece of false information. Mining social media sites is great at gaining a fuller – and more accurate – picture of a candidate. One survey found that, today, 63 per cent of employers use social media sites in recruitment and hiring decisions. Another revealed that 80 per cent of employers plan to increase their presence on Facebook and LinkedIn in the future. Not only can social media sites help you make more informed selection decisions, they can be a great help in recruiting more and better candidates to apply in the first place. Dawn Mitchell, a recruiter for business software company Red Hat, says it’s about ‘living where the candidates are’. She says that nearly all her recent hires have come from

social media contacts. Tom Gimbel, CEO of LaSalle Network, a staffing and recruiting firm, recommends that employers advertise positions on social media sites. Increasingly, recruiting firms that link applicants to companies are finding social media critical for their business, too. ‘Social media is the heart of everything we do,’ said Bill Peppler of Kavaliro Staffing Services. ‘We make numerous job placements that we never would have been able to do without Facebook,’ he said. Accenture has mastered the art of using social media in hiring. John Campagnino, Accenture’s global director of recruitment, claims it has become ‘a centrepiece of our talent acquisition strategy’. Campagnino says that Accenture interacts with potential hires on Facebook, LinkedIn and Twitter; posts jobs on these sites daily; and creates ‘talent communities’ by joining professional groups. Hiring without heavy reliance on social media is backward-looking – and a missed opportunity.

COUNTERPOINT Many employers are scaling back their presence on online job boards like Monster.com and social media sites like Facebook and LinkedIn because there is just too much chaff for the wheat. For example, Science Applications International Corporate (SAIC) reduced the number of job boards it uses from 15 to 6. SAIC found that it simply wasn’t getting to enough of the right candidates early enough to staff its engineering and analyst positions. ‘We need to reach candidates earlier, before they’re being pursued by competitors,’ the company said. Paris-owned food services company Sodexo has slashed its online presence in half. Why? Because while recruiting via social media increased the number of applications, nearly all the increase was in unqualified applicants. ‘Recruiters had to put in all this extra time to read applications but we didn’t get benefit from it,’ said Arie Ball, the company’s talent acquisition vice president. PNC also is scaling back due to the low signal-to-noise ratio. ‘We used to post everything,’ said the online banking company. ‘But you have to think strategically.’

There is also the nontrivial issue of mistaken identity. A lot of mistaken hiring decisions have been made because a company accessed the wrong Facebook or LinkedIn profile. Applicants can post false information on social media sites, too. Perhaps the biggest issue of all is objectivity. Says one employment expert, ‘Once an HR recruiter or administrator has been exposed to an applicant’s social networking profile, it’s difficult to remain objective and consider only the information that is relevant to the job.’

Sources: T. Gimbel, ‘How to hire the right 2013 college grad’, Fox Business, 14 June 2013, www.foxbusiness.com/business-leaders/2013/06/14/how-tosuccessfully-hire-2013-college-grad/; J. Light, ‘Recruiters rethink online playbook’, Wall Street Journal, 18 January 2011, p. B7; R. Pyrillis, ‘The bait debate’, Workforce Management, February 2011, pp. 16–22; and J. Bos, ‘Five trends in employee screening: is your company prepared?’, Workforce Management, March 2010, pp. 28–30.

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QUESTIONS FOR REVIEW 1. What are the most useful methods of initial selection? 2. What are the most useful methods of substantive

selection?

6. What are the similarities and differences between

on-the-job and off-the-job training? 7. What are the methods of performance evaluation?

3. What is contingent selection?

8. How can managers improve performance evaluations?

4. What are the similarities and differences among the

9. What are the various roles of HR in organizations?

four main types of training? 5. What are the similarities and differences between

formal and informal training methods?

EXPERIENTIAL EXERCISE EVALUATING PERFORMANCE AND PROVIDING FEEDBACK Objective To experience the assessment of performance and observe the provision of performance feedback.

Time Approximately 30 minutes.

Procedure Select a class leader, either a volunteer or someone chosen by your instructor. The class leader will preside over the class discussion and perform the role of manager in the evaluation review. Your instructor will leave the room. The class leader is then to spend up to 15 minutes helping the class to evaluate your instructor. Your instructor understands that this is only a class exercise and is prepared to accept criticism (and, of course, any praise you may want to convey). Your instructor also recognizes that the leader’s evaluation is actually a composite of many students’ input. So be open

and honest in your evaluation and have confidence that your instructor will not be vindictive. Research has identified seven performance dimensions to the college instructor’s job: (1) instructor knowledge; (2)  testing procedures; (3) student–teacher relations; (4) organizational skills; (5) communication skills; (6) subject relevance; and (7) utility of assignments. The discussion of your instructor’s performance should focus on these seven dimensions. The leader may want to take notes for personal use but will not be required to give your instructor any written documentation. When the 15-minute class discussion is complete, the leader will invite the instructor back into the room. The performance review will begin as soon as the instructor walks through the door, with the class leader becoming the manager and the instructor playing himself or herself. When completed, class discussion will focus on performance evaluation criteria and how well your class leader did in providing performance feedback.

ETHICAL DILEMMA IS IT UNETHICAL TO ‘SHAPE’ YOUR CURRICULUM VITAE (CV)? When does ‘putting a positive spin’ on your accomplishments step over the line to become misrepresentation or lying? Does a CV have to be 100 per cent truthful? Apparently, a lot of people don’t think so. Studies have found that nearly half of all CV’s contain at least one lie.103 To help clarify your ethical views on this issue, consider the following three situations and answer the questions for each. 1. Aiden left a job for which his title was ‘credit clerk’. When

looking for a new job, he lists his previous title as ‘credit

analyst’. He thinks it sounds more impressive. Is this ‘re-titling’ of a former job wrong? Why or why not? 2. About eight years ago, Ella took nine months off

between jobs to travel. Afraid that people might consider her unstable or lacking in career motivation, she put down on her CV that she was engaged in ‘independent consulting activities’ during the period. Was she wrong? How else could she have described this time period on her CV?

case incident 2   513

degree in psychology, but neither he nor the university can produce any evidence of that. Should he be terminated? If yes, why, and if not, what should his employer do about Hakan’s missing credentials?

3. Hakan is the 46-year-old CEO of a Fortune Global

1000 company. He enrolled in university 20 years ago, but he never got a degree. Just nine months after he was appointed CEO, a local newspaper reported that he had lied on his CV. His CV indicated that he had a bachelor’s

Sack the poor performers! Former Microsoft chief executive Steve Ballmer caused a stir when he announced to the Institute of Directors conference back in 2006 that he sacks one in every 15 employees every year. He suggested that all businesses, large and small, would benefit from such an approach. The idea of culling poor performers is not new in the US, where it is estimated around two-thirds of firms have such a policy. It is far less common in Europe, but will this change as employers seek to focus their training and developing on the best performers and stop wasting money trying to develop the worst? A survey of 562 executives and senior managers in the UK found 77 per cent believed that a fixed quota for annual staff dismissal would boost financial performance and productivity. The advantages of pursuing this policy were described as ensuring strong team members are not carrying weaker ones, allowing underperforming staff to pursue a fresh challenge more suited to their abilities and increasing productivity overall. Stuart Duff, an occupational psychologist, believes that the culling approach is simply the logical conclusion of performance management. ‘Why bother to have a performance management system if you don’t act at both ends? Most companies, however, just reward the top performers and ignore the poor performers.’ Chris Welford, a director of a talent and assessment firm, believes that culling can even be good for those who get fired. The initial reaction to this idea is horror. However, if you think it through, it’s more sensible than it sounds. Most people have skills, but they’re not always used in the right way. In any organization, there are about 10 per cent of people who are in the wrong job. It makes sense to have adult conversations with them about their future and then to help them find work that will use their skills. It’s much better to do that than to hide behind procedures and rules-based management.

CASE INCIDENT 1 Despite these many alleged benefits, only 4 per cent of UK companies surveyed dismiss a proportion of their staff. Most companies are quick to dismiss the idea because, as a HR executive explains, ‘This is a great idea if you want to manage through fear, retribution and paranoia, and create a general air of unease.’ Implementing this approach is more difficult in some European countries than in the US because of, for example, more stringent employment legislation, stronger trade unions and a tendency towards greater employee involvement in human resource practices. Even in the UK, which has a human resource management model reasonably close to the US, employers are warned that sacking poor performers is likely to lead to a barrage of unfair dismissal claims. However, Andrew Wileman writes that some European managers tend to be too soft on underperforming staff. He notes of his Spanish CEO friend, ‘At his technology centre there was not one single involuntary termination (out of 2,000 staff) in five years. The staff there were pretty committed and hard-working, but they knew that at the end of the day there would be no repercussions if they didn’t deliver. So key projects slipped and market opportunities were lost.’ Sources: Adapted from ‘Should HR advise managers to sack poor performers or help them improve?’, Personnel Today, 29 May 2007; Wileman, A. (2008) Driving Down Cost: How to Manage and Cut Costs Intelligently (Boston, MA: Nicholas Brealey, 2008), pp. 75–6.

Questions 1. List the arguments for and against a ‘sack the poor performers’ HR policy that are presented in this article.

2. How would you feel if you worked for an organization with such a policy?

3. Drawing on material from this chapter and the previous questions, would you recommend this policy? Why or why not?

The end of the performance appraisal? As we discussed in the chapter, organizations measure employee performance for a variety of reasons, including determining which employees need training, who is performing well enough to earn a performance reward, and

CASE INCIDENT 2

who deserves a promotion. Performance appraisal information can also help determine where problems lie in the company’s overall training and selection systems and defend HR decisions such as firings in court.

514  17 Human resource policies and practices

In light of these multiple uses, it might surprise you to learn that some companies are moving away from formal appraisal processes. Business scholar Jeffery Pfeffer describes how HR managers at companies like Apple had to bribe managers to complete assigned reviews with free tickets to football games, and the head of HR at SAS received cheers from employees when he had a bonfire to burn performance appraisal forms. Clearly, appraisals are not popular with the managers asked to perform them. Pfeffer notes that the subjective nature of these reviews is troubling to many managers, leading employees to spend much of their time ingratiating themselves with the boss rather than doing their jobs. Moreover, appraisals put the focus on individual performance rather than on the performance of whole teams. Research conducted by Globoforce found that more than half the 631 survey respondents believed appraisals did not accurately reflect their performance on the job. So what is the alternative? Zappos now rates employees not on how well they accomplish tasks, but rather on how well they embody the company’s core values. This feedback is delivered much more frequently during the year than the traditional annual performance meeting. Nor are the ratings used for disciplinary actions or promotions, though employees who get low scores are invited to take developmental classes to improve the fit between their behaviour

and the company culture. Apple has also eliminated annual performance reviews as neither timely nor helpful. Other companies have developed performance management software that automates and streamlines a more continuous performance review, allowing employees to track their performance in real time. The ongoing performance review offers real-time feedback, flexible goals and frequent rewards. Sources: Based on R. Pyrillis, ‘Is your performance review underperforming?’, Workforce Management, May 2011, pp. 20–5; S. A. Culbert and L. Rout, Get Rid of the Performance Review! (New York: Business Plus, 2010); M. Lev-Ram, ‘Performance reviews remade’, Fortune, 29 October 2012, p. 60; and J. Pfeffer, ‘Low grades for performance reviews’, BusinessWeek, 3 August 2009, p. 68.

Questions 1. Have you ever been through a performance appraisal? Do the reactions to appraisal systems described here match your experience? Why or why not?

2. Are there potential drawbacks to eliminating conventional performance appraisal systems? What systems would need to be put in place to replace formal appraisals?

3. Would you feel comfortable providing others with performance feedback? What are some of the possible reasons managers often prefer not to give employees critiques of their performance?

ENDNOTES   1 See B. Becker and B. Gerhart, ‘The impact of human resource management on organizational performance: progress and prospects’, Academy of Management Journal, August 1996, pp. 779–801; M. A. Huselid, S. E. Jackson and R. S. Schuler, ‘Technical and strategic human resource management effectiveness as determinants of firm performance’, Academy of Management Journal, February 1997, pp. 171–88; C. J. Collins and K. D. Clark, ‘Strategic human resource practices, top management team social networks, and firm performance: the role of human resource practices in creating organizational competitive advantage’, Academy of Management Journal, December 2003, pp. 740–51; D. E. Bowen and C. Ostroff, ‘Understanding HRM–firm performance linkages: the role of the “strength” of the HRM system’, Academy of Management Review, April 2004, pp. 203–21; and K. Birdi, C. Clegg, M. Patterson, A. Robinson, C. B. Stride, T. D. Wall and S. J. Wood, ‘The impact of human resource and operational management practices on company productivity: a longitudinal study’, Personnel Psychology, 61, 3 (2008), pp. 467–501.   2 See, for instance, A. L. Kristof-Brown, R. D. Zimmerman and E. C. Johnson, ‘Consequences of individual’s fit at work: a meta-analysis of person-job, person-organization, person-group, and person-supervisor fit’, Personnel Psychology, 58, 2 (2005), pp. 281–342; and D. S. DeRue and F. P. Morgeson, ‘Stability and change in person-team and person-role fit over time: the effects of growth satisfaction, performance, and general self-efficacy’, Journal of Applied Psychology, 92, 5 (2007), pp. 1242–53.

  3 L. Weber, ‘Seeking software fix for job-search game’, Wall Street Journal, 6 June 2012, p. B8.   4 L. Hill, ‘Only BFFs need apply’, Bloomberg Businessweek, 7–13 January 2013, pp. 63–5; and L. Petrecca, ‘Entrepreneurs hire close to home: their moms’, USA Today, 20 August 2012, p. 4B.   5 H. Husock, ‘From prison to a paycheck’, Wall Street Journal, 4 August 2012, p. C3; E. Krell, ‘Criminal background’, HR Magazine, February 2012, pp. 45–54; and M. Waldo, ‘Second chances: employing convicted felons’, HR Magazine, March 2012, pp. 36–41.  6 A. M. F. Hiemstra, E. Derous, A. W. Serlie and M. P. Born, ‘Fairness perceptions of video résumés among ethnically diverse applicants’, International Journal of Selection and Assessment, December 2012, pp. 423–33.   7 C. L. Wilkin and C. E. Connelly, ‘Do I look like someone who cares? Recruiters’ ratings of applicants’ paid and volunteer experience’, International Journal of Selection and Assessment, September 2012, pp. 308–16.  8 M. M. Breslin, ‘Can you handle rejection?’, Workforce Management, October 2012, pp. 32–6.  9 L. Peacock, ‘Immigration checks on Lambeth traffic wardens results in 48 resignations’, Personnel Today, 24 September 2008. 10 L. Kwoh, ‘Workplace crystal ball, courtesy of Facebook’, Wall Street Journal, 21 February 2012), p. B8.

endnotes   515 11 E. Maltby, ‘To find best hires, firms become creative’, Wall Street Journal, 17 November 2009, p. B6. 12 ‘Putting online psychometrics to the test’, Personnel Today, 11 June 2002. 13 J. P. Hausknecht, D. V. Day and S. C. Thomas, ‘Applicant reactions to selection procedures: an updated model and meta-analysis’, Personnel Psychology, September 2004, pp. 639–83. 14 J. E. Hunter, ‘Cognitive ability, cognitive aptitudes, job knowledge, and job performance’, Journal of Vocational Behavior, 29, 3 (1986), pp. 340–62; and F. L. Schmidt, ‘Cognitive tests used in selection can have content validity as well as criterion validity: a broader research review and implications for practice’, International Journal of Selection and Assessment, March 2012, pp. 1–13. 15 F. L. Schmidt and J. Hunter, ‘General mental ability in the world of work: occupational attainment and job performance’, Journal of Personality and Social Psychology, 86, 1 (2004), pp. 162–73; and F. L. Schmidt, J. A. Shaffer and I. Oh, ‘Increased accuracy for range restriction corrections: implications for the role of personality and general mental ability in job and training performance’, Personnel Psychology, 61, 4 (2008), pp. 827–68. 16 J. F. Salgado, N. Anderson, S. Moscoso, C. Bertua, F. de Fruyt and J. P. Rolland, ‘A meta-analytic study of general mental ability validity for different occupations in the European community’, Journal of Applied Psychology, December 2003, pp. 1068–81. 17 W. Poundstone, ‘The Google cheat Businessweek, 9–15 January 2012, p. 79.

sheet’,

Bloomberg

18 M. R. Barrick, M. K. Mount and T. A. Judge, ‘Personality and performance at the beginning of the new millennium: what do we know and where do we go next?’, International Journal of Selection & Assessment, March–June 2001, pp. 9–30; M. R. Barrick, G. L. Stewart and M. Piotrowski, ‘Personality and job performance: test of the mediating effects of motivation among sales representatives’, Journal of Applied Psychology, February 2002, pp. 43–51; and C. J. Thoresen, J. C. Bradley, P. D. Bliese and J. D. Thoresen, ‘The big five personality traits and individual job performance and growth trajectories in maintenance and transitional job stages’, Journal of Applied Psychology, October 2004, pp. 835–53. 19 C. J. König, A.-S. Merz and N. Trauffer, ‘What is in applicants’ minds when they fill out a personality test? Insights from a qualitative study’, International Journal of Selection and Assessment, December 2012, pp. 442–50; R. N. Landers, P. R. Sackett and K. A. Tuzinski, ‘Retesting after initial failure, coaching rumors, and warnings against faking in online personality measures for selection’, Journal of Applied Psychology, 96, 1 (2011), pp. 202–10; and J. P. Hausknecht, ‘Candidate persistence and personality test practice effects: implications for staffing system management’, Personnel Psychology, 63, 2 (2010), pp. 299–324. 20 Z. Galic, Z. Jerneic and M. P. Kovacic, ‘Do applicants fake their personality questionnaire responses and how successful are their attempts? A case of military pilot cadet selection’, International Journal of Selection and Assessment, June 2012, pp. 229–41. 21 J. Fan, D. Gao, S. A. Carroll, F. J. Lopen, T. S. Tian and H. Meng, ‘Testing the efficacy of a new procedure for reducing faking on personality tests within selection contexts’, Journal of Applied Psychology, 97 (2012), pp. 866–80. 22 I. Oh, G. Wang and M. K. Mount, ‘Validity of observer ratings of the five-factor model of personality traits: a meta-analysis’, Journal of Applied Psychology, 96, 4 (2011), pp. 762–73; and B. S. Connelly and D. S. Ones, ‘An other perspective on personality: meta-analytic integration of observers’ accuracy and predictive validity’, Psychological Bulletin, 136, 6 (2010), pp. 1092–122.

23 D. S. Ones, C. Viswesvaran and F. L. Schmidt, ‘Comprehensive meta-analysis of integrity test validities: findings and implications for personnel selection and theories of job performance’, Journal of Applied Psychology, August 1993, pp. 679–703; D. S. Ones, C. Viswesvaran and F. L. Schmidt, ‘Personality and absenteeism: a meta-analysis of integrity tests’, European Journal of Personality, March–April 2003, Supplement 1, pp. S19–S38; and C. M. Berry, P. R. Sackett and S. Wiemann, ‘A review of recent developments in integrity test research’, Personnel Psychology, 60, 2 (2007), pp. 271–301. 24 C. H. Van Iddekinge, P. L. Roth, P. H. Raymark and H. N. Odle-Dusseau, ‘The criterion-related validity of integrity tests: an updated meta-analysis’, Journal of Applied Psychology, 97 (2012), pp. 499–530. 25 P. Carbonara, ‘Hire for attitude, train for skill’, Fast Company, Greatest Hits, vol. 1, 1997, p. 68. 26 J. J. Asher and J. A. Sciarrino, ‘Realistic work sample tests: a review’, Personnel Psychology, Winter 1974, pp. 519–33; I. T. Robertson and R. S. Kandola, ‘Work sample tests: validity, adverse impact and applicant reaction’, Journal of Occupational Psychology, Spring 1982, pp. 171–82; and M. Callinan and I. T. Robertson, ‘Work sample testing’, International Journal of Selection & Assessment, December 2000, pp. 248–60. 27 See, for instance, A. C. Spychalski, M. A. Quinones, B. B. Gaugler and K. Pohley, ‘A survey of assessment center practices in organ­ izations in the United States’, Personnel Psychology, Spring 1997, pp. 71–90; C. Woodruffe, Development and Assessment Centres: Identifying and Assessing Competence (London: Institute of Personnel and Development, 2000); and J. Schettler, ‘Building bench strength’, Training, June 2002, pp. 55–8. 28 M. Crail, ‘Employers rate assessment centres as worth the high cost’, Personnel Today, 21 August 2007. 29 F. Lievens, H. Peeters and E. Schollaert, ‘Situational judgment tests: a review of recent research’, Personnel Review, 37, 4 (2008), pp. 426–41. 30 F. Lievens, T. Buyse, P. R. Sackett and B. S. Connelly, ‘The effects of coaching on situational judgment tests in high-stakes selection’, International Journal of Selection and Assessment, September 2012, pp. 272–82. 31 F. Lievens and F. Patterson, ‘The validity and incremental validity of knowledge tests, low-fidelity simulations, and high-fidelity simulations for predicting job performance in advanced-level high-stakes selection’, Journal of Applied Psychology, Online First Publication, 11 April 2011. 32 M. A. Tucker, ‘Show and tell’, HR Magazine, January 2012, pp. 51–3. 33 J. Alsever, ‘How to get a job: show, don’t tell’, Fortune, 19 March 2012, pp. 29–31. 34 B. K. Griepentrog, C. M. Harold, B. C. Holtz, R. J. Kimoski and S. M. Marsh, ‘Integrating social identity and the theory of planned behavior: predicting withdrawal from an organiz­ ational recruitment process’, Personnel Psychology, 65 (2012), pp. 723–53. 35 B. W. Swider, M. R. Barrick, T. B. Harris and A. C. Stoverink, ‘Managing and creating an image in the interview; the role of interviewee initial impressions’, Journal of Applied Psychology, Online First Publication, 30 May 2011. 36 J. M. Madera and M. R. Hebl, ‘Discrimination against facially stigmatized applicants in interviews: an eye-tracking and faceto-face investigation’, Journal of Applied Psychology, 97 (2012), pp. 317–30. 37 Ibid.

516  17 Human resource policies and practices 38 K. I. van der Zee, A. B. Bakker and P. Bakker, ‘Why are structured interviews so rarely used in personnel selection?’, Journal of Applied Psychology, February 2002, pp. 176–84. 39 See M. A. McDaniel, D. L. Whetzel, F. L. Schmidt and S. D. Maurer, ‘The validity of employment interviews: a comprehensive review and meta-analysis’, Journal of Applied Psychology, August 1994, pp. 599–616; M. A. Campion, D. K. Palmer and J. E. Campion, ‘A review of structure in the selection interview’, Personnel Psychology, Autumn 1997, pp. 655–702; A. I. Huffcutt and D. J. Woehr, ‘Further analysis of employment interview validity: a quantitative evaluation of interviewer-related structuring methods’, Journal of Organizational Behavior, July 1999, pp. 549–60; and M. Ziegler, E. Dietl, E. Danay, M. Vogel and M. Bühner, ‘Predicting training success with general mental ability, specific ability tests, and (un)structured interviews: a meta-analysis with unique samples’, International Journal of Selection and Assessment, 19, 2 (2011), pp. 170–82. 40 Van der Zee, Bakker and Bakker, ‘Why are structured interviews so rarely used in personnel selection?’ 41 T. W. Dougherty, D. B. Turban and J. C. Callender, ‘Confirming first impressions in the employment interview: a field study of interviewer behavior’, Journal of Applied Psychology, October 1994, pp. 659–65; and M. R. Barrick, B. W. Swider and G. L. Stewart, ‘Initial evaluations in the interview: relationships with subsequent interviewer evaluations and employment offers’, Journal of Applied Psychology, 95, 6 (2010), pp. 1163–72. 42 K. G. Melchers, N. Lienhardt, M. von Aarburg and M. Kleinmann, ‘Is more structure really better? A comparison of frame-of-reference training and descriptively anchored rating scales to improve interviewers’ rating quality’, Personnel Psychology, 64, 1 (2011), pp. 53–87. 43 F. L. Schmidt and R. D. Zimmerman, ‘A counterintuitive hypothesis about employment interview validity and some supporting evidence’, Journal of Applied Psychology, 89, 3 (2004), pp. 553–61. 44 ‘Survey finds employers form opinions of job interviewees within 10 minutes’, IPMA-HR Bulletin, 21 April, 2007, p. 1. 45 R. L. Dipboye, Selection Interviews: Process Perspectives (Cincinnati, OH: South-Western Publishing, 1992), pp. 42–4; and R. A. Posthuma, F. P. Morgeson and M. A. Campion, ‘Beyond employment interview validity’, pp. 1–81. 46 J. F. Salgado and S. Moscoso, ‘Validity of the structured behavioral interview’, Revista de Psicologla del Trabajo y las Organizaciones, 11 (1995), pp. 9–24; see also S. Moscoso and J. F. Salgado, ‘Psychometric properties of a structured Behavioral interview to hire private security personnel’, Journal of Business & Psychology, Autumn 2001, pp. 51–9. 47 See G. A. Adams, T. C. Elacqua and S. M. Colarelli, ‘The employment interview as a sociometric selection technique’, Journal of Group Psychotherapy, Autumn 1994, pp. 99–113; R. L. Dipboye, ‘Structured and unstructured selection interviews: beyond the job-fit model’, Research in Personnel Human Resource Management, 12 (1994), pp. 79–123; B. Schneider, D. B. Smith, S. Taylor and J. Fleenor, ‘Personality and organizations: a test of the homogeneity of personality hypothesis’, Journal of Applied Psychology, June 1998, pp. 462–70; and M. Burke, ‘Funny business’, Forbes, 9 June 2003, p. 173. 48 See European Workplace Drug Testing Society, http://www. ewdts.org, accessed 10 September 2015; Managing Drug and Alcohol Misuse at Work, CIPD, September 2007. 49 Eurofound, Fifth European Working Conditions Survey, Luxembourg: Publications Office of the European Union, 2012 Luxembourg, www.trainingindustry.com. Accessed 10 September 2015.

50 T. Craig, ‘Basic skills gap costs millions as it hits UK productivity’, Personnel Today, 17 April 2008; M. Millar, ‘One in three employers send staff to gain basic numeracy and literacy skills’, Personnel Today, 21 August 2006. M. Smulian, ‘England fails on numeracy and literacy’, Public Finance, 6 February 2009, p. 13; E. K. Sharma, ‘Growing a new crop of talent: India Inc. is increasingly going rural’, Business Today, 28 June 2009, http://businesstoday.intoday.in/; and G. Paton, ‘Almost half of employers forced to teach teenagers basic literacy and numeracy skills’, Telegraph, 9 May 2011. 51 A. Bernstein, ‘The time bomb in the workforce: illiteracy’, BusinessWeek, 25 February 2002, p. 122. 52 ‘Northern Foods teams up with three unions to deliver staff training’, Personnel Today, 12 October 2006. 53 C. Ansberry, ‘A new blue-collar world’, Wall Street Journal, 30 June 2003, p. B1. 54 J. Barbarian, ‘Mark Spear: Director of Management and Organizational Development, Miller Brewing Co.’, Training, October 2001, pp. 34–8. 55 See, for example, P. J. Taylor, D. F. Russ-Eft, and H. Taylor, ‘Transfer of management training from alternative perspectives’, Journal of Applied Psychology, 94, 1 (2009), pp. 104–21. 56 See, for example, S. Lim and A. Lee, ‘Work and nonwork outcomes of workplace incivility: does family support help?’, Journal of Occupational Health Psychology, 16, 1 (2011), pp. 95–111; C. L. Porath and C. M. Pearson, ‘The cost of bad behavior’, Organizational Dynamics, 39, 1 (2010), pp. 64–71; and B. Estes and J. Wang, ‘Workplace incivility: impacts on individual and organizational performance’, Human Resource Development Review, 7, 2 (2008), pp. 218–40. 57 M. P. Leiter, H. K. S. Laschinger, A. Day and D. G. Oore, ‘The impact of civility interventions on employee social behavior, distress, and attitudes’, Journal of Applied Psychology, advance online publication, 11 July 2011. 58 For example see L. Oliva, ‘Ethics edges on to courses: corporate social responsibility: business schools are taking the training of ethical managers seriousl’, Financial Times, 16 February 2004, p. 11; M. Berry, ‘Ethics rises up the agenda of UK businesses’, Personnel Today, 10 March 2008. 59 M. B. Wood, Business Ethics in Uncertain Times (Upper Saddle River, NJ: Prentice-Hall, 2004), p. 61. 60 See, for example, D. Seligman, ‘Oxymoron 101’, Forbes, 28 October 2002, pp. 160–4; and R. B. Schmitt, ‘Companies add ethics training; will it work?’, Wall Street Journal, 4 November 2002, p. B1; A. Becker, ‘Can you teach ethics to MBAs?’ BNet, 19 October 2009, www.bnet.com. 61 W. R. Allen, P. Bacdayan, K. B. Kowalski and M. H. Roy, ‘Examining the impact of ethics training on business student values’, Education and Training, 47, 3 (2005), pp. 170–82; A. Lämsä, M. Vehkaperä, T. Puttonen and H. Pesonen, ‘Effect of business education on women and men students’ attitudes on corporate responsibility in society’, Journal of Business Ethics, 82, 1 (2008), pp. 45–58; and K. M. Sheldon and L. S. Krieger, ‘Understanding the negative effects of legal education on law students: a longitudinal test of self-determination theory’, Personality and Social Psychology Bulletin, 33, 6 (2007), pp. 883–97. 62 S. Valentine and G. Fleischman, ‘Ethics programs, perceived corporate social responsibility, and job satisfaction’, Journal of Business Ethics, 77, 2 (2008), pp. 159–72. 63 K. Tyler, ‘A new U’, HR Magazine, April 2012, pp. 27–34. 64 See, for instance, R. E. Derouin, B. A. Fritzsche and E. Salas, ‘E-learning in organizations’, Journal of Management, 31,

endnotes   517 3 (2005), pp. 920–40; and K. A. Orvis, S. L. Fisher and M. E. Wasserman, ‘Power to the people: using learner control to improve trainee reactions and learning in web-based instructional environments’, Journal of Applied Psychology, 94, 4 (2009), pp. 960–71. 65 T. Sitzmann, K. Kraiger, D. Stewart and R. Wisher, ‘The comparative effectiveness of web-based and classroom instruction: a meta-analysis’, Personnel Psychology, 59, 3 (2006), pp. 623–64. 66 T. Sitzmann, B. S. Bell, K. Kraiger and A. M. Kanar, ‘A multilevel analysis of the effect of prompting self- regulation in technology-delivered instruction’, Personnel Psychology, 62, 4 (2009), pp. 697–734. 67 B. Roberts, ‘From e-learning to mobile learning’, HR Magazine, August 2012, pp. 61–5. 68 E. A. Ensher, T. R. Nielson and E. Grant-Vallone, ‘Tales from the hiring line: effects of the internet and technology on HR processes’, Organizational Dynamics, 31, 3 (2002), pp. 232–3; and J. B. Arbaugh, ‘Do undergraduates and MBAs differ online? initial conclusions from the literature’, Journal of Leadership and Organizational Studies, 17, 2 (2010), pp. 129–42. 69 G. M. Alliger, S. I. Tannenbaum, W. Bennett, H. Traver and A. Shotland, ‘A meta-analysis of the relations among training criteria’, Personnel Psychology, 50, 2 (1997), pp. 341–58; and T. Sitzmann, K. G. Brown, W. J. Casper, K. Ely and R. D. Zimmerman, ‘A review and meta-analysis of the nomological network of trainee reactions’, Journal of Applied Psychology, 93, 2 (2008), pp. 280–95. 70 J. A. Colquitt, J. A. LePine and R. A. Noe, ‘Toward an integrative theory of training motivation: a meta-analytic path analysis of 20 years of research’, Journal of Applied Psychology, October 2000, pp. 678–707. 71 See L. A. Burke and H. S. Hutchins, ‘Training transfer: an integrative literature review’, Human Resource Development Review, 6 (2007), pp. 263–96; and D. S. Chiaburu and S. V. Marinova, ‘What predicts skill transfer? An exploratory study of goal orientation, training self- efficacy, and organizational supports’, International Journal of Training and Development, 9, 2 (2005), pp. 110–23. 72 M. Rotundo and P. R. Sackett, ‘The relative importance of task, citizenship, and counterproductive performance to global ratings of job performance: a policy capturing approach’, Journal of Applied Psychology, 87, 1 (2002), pp. 66–80; and S. W. Whiting, P. M. Podsakoff and J. R. Pierce, ‘Effects of task performance, helping, voice, and organizational loyalty on performance appraisal ratings’, Journal of Applied Psychology, 93, 1 (2008), pp. 125–39. 73 W. F. Cascio and H. Aguinis, Applied Psychology in Human Resource Management, 7th edn (Upper Saddle River, NJ: Prentice Hall, 2010). 74 M. Shepard and R. Johns, ‘Candidate image and electoral preference in Britain’, British Politics, 3, 3 (2008), pp. 324–49. 75 A. H. Locher and K. S. Teel, ‘Appraisal trends’, Personnel Journal, September 1988, pp. 139–45. 76 Cited in S. Armour, ‘Job reviews take on added significance in down times’, USA Today, 23 July 2003, p. 4B. 77 See review in R. D. Bretz Jr, G. T. Milkovich and W. Read, ‘The current state of performance appraisal research and practice: concerns, directions, and implications’, Journal of Management, June 1992, p. 326; and P. W. B. Atkins and R. E. Wood, ‘Selfversus others’ ratings as predictors of assessment center ratings: validation evidence for 360-degree feedback programs’, Personnel Psychology, Winter 2002, pp. 871–904. 78 See, for instance, J. D. Facteau and S. B. Craig, ‘Are performance appraisal ratings from different rating sources compatible?’,

Journal of Applied Psychology, April 2001, pp. 215–27; J. F. Brett and L. E. Atwater, ‘360-degree feedback: accuracy, reactions, and perceptions of usefulness’, Journal of Applied Psychology, October 2001, pp. 930–42; F. Luthans and S. J. Peterson, ‘360degree feedback with systematic coaching: empirical analysis suggests a winning combination’, Human Resource Management, Autumn 2003, pp. 243–56; and B. I. J. M. van der Heijden and A. H. J. Nijhof, ‘The value of subjectivity: problems and prospects for 360-degree appraisal systems’, International Journal of Human Resource Management, May 2004, pp. 493–511. 79 M. K. Mount and S. E. Scullen, ‘Multisource feedback ratings: what do they really measure?’, in M. London (ed.), How People Evaluate Others in Organizations (Mahwah, NJ: Lawrence Erlbaum, 2001), pp. 155–76; and K.-Y. Ng, C. Koh, S. Ang, J. C. Kennedy and K. Chan, ‘Rating leniency and halo in multisource feedback ratings: testing cultural assumptions of power distance and individualism-collectivism’, Journal of Applied Psychology, Online First Publication, 11 April 2011. 80 X. M. Wang, K. F. E. Wong and J. Y. Y. Kwong, ‘The roles of rater goals and ratee performance levels in the distortion of performance ratings’, Journal of Applied Psychology, 95, 3 (2010), pp. 546–561; J. R. Spence and L. M. Keeping, ‘The impact of non-performance information on ratings of job performance: a policy-capturing approach’, Journal of Organizational Behavior, 31 (2010), pp. 587–608; and J. R. Spence and L. Keeping, ‘Conscious rating distortion in performance appraisal: a review, commentary, and proposed framework for research’, Human Resource Management Review, 21, 2 (2011), pp. 85–95. 81 L. E. Atwater, J. F. Brett and A. C. Charles, ‘Multisource feedback: lessons learned and implications for practice’, Human Resource Management, 46, 2 (2007), pp. 285–307; and R. Hensel, F. Meijers, R. van der Leeden and J. Kessels, ‘360-degree feedback: How many raters are needed for reliable ratings on the capacity to develop competences, with personal qualities as developmental goals?’, International Journal of Human Resource Management, 21, 15 (2010), pp. 2813–30. 82 See, for instance, J. W. Hedge and W. C. Borman, ‘Changing conceptions and practices in performance appraisal’, in A. Howard (ed.), The Changing Nature of Work (San Francisco, CA: Jossey-Bass, 1995), pp. 453–59. 83 See, for instance, K. L. Uggerslev and L. M. Sulsky, ‘Using frame-of-reference training to understand the implications of rater idiosyncrasy for rating accuracy’, Journal of Applied Psychology, 93, 3 (2008), pp. 711–19; and R. F. Martell and D. P. Evans, ‘Source-monitoring training: toward reducing rater expectancy effects in behavioral measurement’, Journal of Applied Psychology, 90, 5 (2005), pp. 956–63. 84 B. Erdogan, ‘Antecedents and consequences of justice perceptions in performance appraisals’, Human Resource Management Review, 12, 4 (2002), pp. 555–78; and I. M. Jawahar, ‘The mediating role of appraisal feedback reactions on the relationship between rater feedback-related behaviors and ratee performance’, Group and Organization Management, 35, 4 (2010), pp. 494–526. 85 B. D. Cawley, L. M. Keeping and P. E. Levy, ‘Participation in the performance appraisal process and employee reactions: a meta-analytic review of field investigations’, Journal of Applied Psychology, August 1998, pp. 615–33; and P. E. Levy and J. R. Williams, ‘The social context of performance appraisal: a review and framework for the future’, Journal of Management, 30, 6 (2004), pp. 881–905. 86 F. Gino and M. E. Schweitzer, ‘Blinded by anger or feeling the love: how emotions influence advice taking’, Journal of Applied Psychology, 93, 3 (2008), pp. 1165–73.

518  17 Human resource policies and practices 87 Heidemeier and Moser, ‘Self–other agreement in job performance ratings’. 88 J. Han, ‘Does performance-based salary system suit Korea?’, Korea Times, 15 January 2008. 89 F. F. T. Chiang and T. A. Birtch, ‘Appraising performance across borders: an empirical examination of the purposes and practices of performance appraisal in a multi-country context’, Journal of Management Studies, 47, 7 (2010), pp. 1365–93. 90 K.-Y. Ng, C. Koh, S. Ang, J. C. Kennedy and K. Chan, ‘Rating leniency and halo in multisource feedback ratings: testing cultural assumptions of power distance and individualism-collectivism’, Journal of Applied Psychology, Online First Publication, 11 April 2011. 91 J. Camps and R. Luna-Arocas, ‘A matter of learning: how human resources affect organizational performance’, British Journal of Management, 23 (2012), pp. 1–21. 92 R. R. Kehoe and P. M. Wright, ‘The impact of high-performance human resource practices on employees’ attitudes and behaviors’, Journal of Management, February 2013, pp. 366–91. 93 K. Van De Voorde, J. Paauwe and M. Van Veldhoven, ‘Employee well-being and the HRM-organizational performance relationship: a review of quantitative studies’, International Journal of Management Reviews, 14 (2012), pp. 391–407. 94 See, for instance, Harvard Business Review on Work and Life Balance (Boston: Harvard Business School Press, 2000); R. Rapoport, L. Bailyn, J. K. Fletcher and B. H. Pruitt, Beyond Work-Family Balance (San Francisco: Jossey-Bass, 2002); and E. E. Kossek, S. Pichler, T. Bodner and L. B. Hammer, ‘Workplace social support and work-family conflict: a meta-analysis clarifying the influence of general and work-family specific supervisor and organizational support’, Personnel Psychology, 64, 2 (2011), pp. 289–313.

  95 B. Harrington, F. Van Deusen and B. Humberd, The New Dad: Caring Committed and Conflicted (Boston: Boston College Center for Work and Family, 2011).   96 A. Grant, ‘Top 25 companies for work–life balance’, US News and World Report, 11 May 2011, www.money.usnews.com.  97 C. P. Maertz and S. L. Boyar, ‘Work–family conflict, enrichment, and balance under “levels” and “episodes” approaches’, Journal of Management, 37, 1 (2011), pp. 68–98.   98 L. M. Lapierre and T. D. Allen, ‘Control at work, control at home, and planning behavior: implications for work–family conflict’, Journal of Management, September 2012, pp. 1500–16.   99 J. S. Michel and M. B. Hargis, ‘Linking mechanisms of work– family conflict and segmentation’, Journal of Vocational Behavior, 73, 3 (2008), pp. 509–22; G. E. Kreiner, ‘Consequences of work–home segmentation or integration: a person-­environment fit perspective’, Journal of Organizational Behavior, 27, 4 (2006), pp. 485–507; and C. A. Bulger, R. A. Matthews and M. E. Hoffman, ‘Work and personal life boundary management: boundary strength, work/personal life balance, and the segmentation-integration continuum’, Journal of Occupational Health Psychology, 12, 4 (2007), pp. 365–75. 100 D. Catanzaro, H. Moore and T. R. Marshall, ‘The impact of organizational culture on attraction and recruitment of job applicants’, Journal of Business and Psychology, 25 (2010), pp. 649–62. 101 D. Meinert, ‘Layoff victims won’t hold a grudge if treated fairly’, HR Magazine, November 2012, p. 24. 102 D. van Dierendonck and G. Jacobs, ‘Survivors and victims: a meta-analytical review of fairness and organizational commitment after downsizing’, British Journal of Management, 23 (2012), pp. 96–109. 103 C. Soltis, ‘Eagle-eyed employers scour résumés for little white lies’, Wall Street Journal, 21 March 2006, p. B7.

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CHAPTER 18 Organizational change and stress management Learning objectives after studying this chapter, you should be able to: 1 Contrast planned and unplanned change. 2 Describe the sources of resistance to change. 3 Compare the four main approaches to managing organizational change. 4 Demonstrate two ways of creating a culture for change. 5 identify potential sources of stress. 6 identify the consequences of stress. 7 Contrast the individual and organizational approaches to managing stress.

nothing endures but change. Heraclitus

LEGO: KING OF THE CASTLE No matter how hard Sam Johnson presses down on the spider, the creature known as Sparratus stays together. It was not always so. In his earlier versions, the plastic spider could withstand the pressure applied by someone like himself, an adult Lego designer from England. But when he gave the prototype to children, things were a little different. ‘They picked it up by the legs! The crazy things kids do,’ he says. ‘We had to make sure kids could push the body all the way down to the floor to put the figure in.’ Much of the six-month development of the €25 Sparratus’ Spider Stalker toy set was spent making sure the legs did not snap off. A solution for wooden floors did not work on carpets until Mr Johnson introduced bricks from more advanced Technic sets. ‘You can end up falling in love with a brick,’ he says. It is typical of the attention to detail that has propelled the Danish toymaker from the brink of financial collapse a decade ago to the most profitable company in the sector. The Lego formula appears simple: take plastic costing less than €1 per kilogramme and transform it into sets based on Star Wars, Legends of Chima or The Hobbit retailing for about €75 per kg. But the company’s success is not just built on the humble plastic brick. It has branched out from toys into video games, board games and, most recently, film, with the highly successful The Lego Movie. But as children spend more time playing on devices such as iPads and smartphones, Lego faces a big problem that has stalled rivals: can it keep up its stellar growth in an increasingly digital world of play, or will it be trapped by its own recent success? ‘I think it’s a really critical question,’ says David Robertson, a professor at the University of Pennsylvania’s Wharton School who has written a book on Lego, Brick by Brick. ‘They really need to find that next big thing. Lego has been pretty good at finding the next little thing but not the next big thing.’ A decade ago the privately owned company – still controlled by the founding Kristiansen family – was having trouble even knowing what the next little thing would be. When Jørgen Vig Knudstorp took over as chief executive in 2004, it was in deep crisis. The former McKinsey consultant found a company that had lost faith in the brick, dumping its Duplo brand for toddlers and plumping for easier-to-build products such as a character called Jack Stone.

Lewis Tse Pui Lung / Shutterstock

‘The real problem for Lego was that it did so many experiments in such a short space of time that the capabilities didn’t follow quickly enough,’ says Mr  Knudstorp, sitting in his modest office filled with dozens of Lego sets in the Danish town of Billund. Mr Knudstorp put in place a three-stage plan. The first two years were about survival: assets, such as the Legoland theme parks, were sold off and strict financial controls were introduced. Once the bleeding stopped, he tried to make the company healthy again in 2006–07 by restructuring manufacturing. The final stage, begun in 2008, was a push for growth. Lego made a big effort in markets where it was underrepresented: in the US, as well as emerging markets such as China, Russia and Brazil. It also launched new product lines. Lego had always been preferred by boys, so it started the Friends range aimed at girls. Despite controversy, it was a big seller. Other successful homegrown launches were Ninjago, based on Japanese warriors, and Legends of Chima, featuring animals fighting in a magical land. Those successes were all the sweeter because Lego does not have to pay the royalty it does for third-party sets such as Star Wars or Harry Potter. It also has full control over the characters, what they look like and can do. The result of these efforts was a company that made an operating profit of about €1.5 billion in 2014. Yet he cautions that the challenges Lego faces today are very similar to the ones a decade ago. ‘I think one of my huge jobs over the next 20 years is to be able to adjust to globalisation and digitalisation and not be taken hostage by our past success, not being tied by earlier decisions which then limits your ability to adapt to what is required from the future.’

Sources: Adapted from Milne, R. (2014) Lego: King of the castle, Financial Times, 10 July 2014. © The Financial Times Limited. All Rights Reserved. Pearson Education Ltd. is responsible for providing this adaptation of the original article.

522  18 Organizational change and stress ­m anagement

As the case of Lego demonstrates, organizations must change in order to survive. In this chapter we describe environmental forces that require firms to change, why people and organ­ izations often resist change and how this resistance can be overcome. We also review processes for managing organizational change. Then we move to the topic of stress, often caused by change, and its sources, consequences and what individuals and organizations can do to better manage stress levels.

REFLECTION During what time of your life have you experienced the most change? How did you deal with it? Would you handle these changes in the same way today? Why or why not?

Forces for change 1  Contrast planned and unplanned change.

No company today is in a particularly stable environment. Even traditionally stable indus­ tries such as energy and utilities have witnessed – and will continue to experience – turbulent change. Companies that occupy a dominant market share in their industries must change, sometimes radically. It is not difficult to find examples of organizations such as Blockbuster, HMV, Blackberry, Planet Hollywood, Woolworths, Polaroid, Groupon, Dell and Nokia that have struggled to adjust. The dynamic and changing environments that organizations face today require adaptation, sometimes calling for deep and rapid responses. ‘Change or die!’ is the rallying cry among today’s managers worldwide. Table 18.1 summarizes six specific forces that are acting as stim­ ulants for change. In a number of places in this book, we’ve discussed the changing nature of the workforce. For instance, almost every organization is having to adjust to a multicultural environment, demographic changes, immigration and outsourcing. Technology is continually changing jobs and organizations. It is not hard to imagine the very idea of an office becoming an antiquated concept in the near future. Economic shocks have continued to impose changes on organizations. In recent years, for instance, low interest rates and the ease of obtaining credit first stimulated a rapid rise in home values, helped sustain consumer spending and benefited many industries, especially construc­ tion and banking. But when the bubble burst, businesses in these same industries and many others suffered. Competition is changing. The global economy means that competitors are as likely to come from across the ocean as from across town. Heightened competition means that successful organizations will be the ones that can change in response to the competition. They’ll be fast on their feet, capable of developing new products rapidly and getting them to market quickly. They’ll rely on short production runs, short product cycles and an ongoing stream of new products. In other words, they’ll be flexible. They will require an equally flexible and respon­ sive workforce that can adapt to rapidly and even radically changing conditions. Social trends don’t remain static either. Consumers who are otherwise strangers now meet and share product information in chat rooms and blogs. Companies must continually adjust product and marketing strategies to be sensitive to changing social trends, as Liz Claiborne did when it sold off fashion brands such as Ellen Tracy, de-emphasized large vendors, streamlined operations and cut staff. Consumers, employees and organizational leaders are increasingly sensitive to environmental concerns. ‘Green’ practices are quickly becoming expected rather than optional. Not even globalization’s strongest proponents could have imagined how world politics would change in recent years. We’ve seen a major set of financial crises that have rocked global

Planned change   523

Table 18.1  Forces for change Force

Examples

Nature of the workforce

More cultural diversity Ageing population Increased immigration and outsourcing

Technology

Faster, cheaper and more mobile computers and handheld devices Emergence and growth of social networking sites Deciphering of the human genetic code

Economic shocks

Rise and fall of the global housing market Financial sector collapse Global recession

Competition

Global competitors Mergers and consolidations Growth of e-commerce

Social trends

Increased environmental awareness Shopping from home More multitasking and connectivity

World politics

European Union membership uncertainty Opening of markets in China War on terrorism

markets, a dramatic rise in the power and influence of China, and intense shakeups in govern­ ments across the Arab world. Throughout the industrialized world, businesses – particularly in the banking and financial sectors – have come under new scrutiny.

Planned change

change Making things different. planned change Change activities that are intentional and goal-oriented.

A group of housekeeping employees who work for a small hotel confronted the owner: ‘It’s very hard for most of us to maintain rigid 7-to-4 work hours,’ said their spokeswoman. ‘Each of us has significant family and personal responsibilities. And rigid hours don’t work for us. We’re going to begin looking for someplace else to work if you don’t set up flexible work hours.’ The owner listened thoughtfully to the group’s ultimatum and agreed to its request. The next day, the owner introduced a flexitime plan for these employees. A major automobile manufacturer spent several billion euros to install state-of-the-art robotics. One area that would receive the new equipment was quality control. Sophisticated computer-controlled equipment would be put in place to significantly improve the company’s ability to find and correct defects. Because the new equipment would dramatically change the jobs of the people working in the quality-control area, and because management antic­ ipated considerable employee resistance to the new equipment, executives were developing a programme to help people become familiar with the equipment and to deal with any anxieties they might be feeling. Both of these scenarios are examples of change. That is, both are concerned with making things different. However, only the second scenario describes a planned change. Many changes in organizations are like the one that occurred at the hotel – they just happen. Some organ­ izations treat all change as an accidental occurrence. We’re concerned with change activities that are proactive and purposeful. In this chapter, we address change as an intentional, goal-­ oriented activity.

Antonio Calanni/AP/Press Association Images

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The current CEO of Fiat Chrysler Automobiles, Sergio Marchionne, is well known as a change agent. He returned the ailing Fiat Group to profitability in 2006 and was instrumental in the merger with Chrysler in 2009 soon after it came out of bankruptcy. By 2014 Fiat Chrysler Automobiles had grown to become the seventh-largest carmaker in the world.

What are the goals of planned change? Essentially there are two. First, it seeks to improve the ability of the organization to adapt to changes in its envi­ ronment. Second, it seeks to change employee behaviour. Who in organizations is responsible for managing change activities? The answer is change agents.1 They see a future for the organization that others have not identified, and they are able to motivate, invent and implement this vision. Change agents can be managers or nonmanagers, current or new employees, or outside consultants. DuPont has two primary change agents in CEO Ellen Kullman and Chief Innovation Officer Thomas Connelly.2 Taking the reins of the company in 2010, Kullman has pushed the organization towards a higher level of achieve­ ment by focusing on a principle Connelly calls ‘launch hard and ramp fast’. This means the organization will seek to derive as much of its revenues from new products as possible. The goal is to move DuPont from a comparatively placid culture to one that focuses on market-driven science and delivers prod­ ucts customers need. The process has not always been easy, but is neces­ sary to keep DuPont ahead in the competitive marketplace. General Motors expects its human resource managers to be change agents and its top human resource executive to set the tone. Experts attribute some of the failed changes at General Motors to Kathleen Barclay’s stint as global human resource vice president. General Motors next hired Mary Barra, a manufacturing executive they thought could bring about better changes. Barra seemed like a change agent, but even CEO Dan Akerson said, ‘It was the worst application of talent I’ve ever seen.’ General Motors next selected Cynthia Brinkley, who supposedly has the right combination as a change agent. Yet, she has no HR background.3 Many change agents fail because organizational members resist change. In the next section, we discuss resistance to change and what managers can do about it.

Resistance to change 2  Describe the sources of resistance to change. change agents Persons who act as catalysts and assume the responsibility for managing change activities.

One of the most well-documented findings from studies of individual and organizational behaviour is that organizations and their members often resist change. One study showed that even when employees are shown data that suggest they need to change, they latch onto whatever data they can find that suggest they are okay and don’t need to change. Our egos are fragile, and we often see change as threatening.4 Employees who have negative feelings about a change cope by not thinking about it, increasing their use of sick time, or quitting. All these reactions can sap the organization of vital energy when it is most needed.5 Resistance to change can be positive if it leads to open discussion and debate.6 These responses are usually preferable to apathy or silence and can indicate that members of the organization are engaged in the process, providing change agents an opportunity to explain the change effort. Change agents can also use resistance to modify the change to fit the prefer­ ences of other members of the organization. When they treat resistance only as a threat, rather than a point of view to be discussed, they may increase dysfunctional conflict. Resistance to change doesn’t necessarily surface in standardized ways. Resistance can be overt, implicit, immediate or deferred. It’s easiest for management to deal with resistance when it is overt and immediate. For instance, a change is proposed and employees quickly respond by voicing complaints, engaging in a work slowdown, threatening to go on strike, or the like. The greater challenge is managing resistance that is implicit or deferred. Implicit resistance efforts are more subtle – loss of loyalty to the organization, loss of motivation to work, increased errors or mistakes, increased absenteeism due to ‘sickness’ – and hence are more difficult to recognize. Similarly, deferred actions cloud the link between the source of the resistance and the reaction to it. A change may produce what appears to be only a minimal reaction at the time it is initiated, but then resistance surfaces weeks, months or even years later. Or a single

Resistance to change   525

Table 18.2  Sources of resistance to change Individual sources Habit

To cope with life’s complexities, we rely on habits or programmed responses. But when confronted with change, this tendency to respond in our accustomed ways becomes a source of resistance.

Security

People with a high need for security are likely to resist change because it threatens their feelings of safety.

Economic factors

Changes in job tasks or established work routines can arouse economic fears if people are concerned that they won’t be able to perform the new tasks or routines to their previous standards, especially when pay is closely tied to productivity.

Fear of the unknown

Change substitutes ambiguity and uncertainty for the known.

Selective information processing

Individuals are guilty of selectively processing information in order to keep their perceptions intact. They hear what they want to hear, and they ignore information that challenges the world they’ve created.

Organizational sources Structural inertia

Organizations have built-in mechanisms – such as their selection processes and formalized regulations – to produce stability. When an organization is confronted with change, this structural inertia acts as a counterbalance to sustain stability.

Limited focus of change

Organizations are made up of a number of interdependent subsystems. One can’t be changed without affecting the others. So limited changes in subsystems tend to be nullified by the larger system.

Group inertia

Even if individuals want to change their behaviour, group norms may act as a constraint.

Threat to expertise

Changes in organizational patterns may threaten the expertise of specialized groups.

Threat to established power relationships

Any redistribution of decision-making authority can threaten long-established power relationships within the organization.

Threat to established resource allocations

Groups in the organization that control sizeable resources often see change as a threat. They tend to be content with the way things are.

change that in and of itself might have little impact becomes the straw that breaks the camel’s back. Reactions to change can build up and then explode in some response that seems totally out of proportion to the change action it follows. The resistance, of course, has merely been deferred and stockpiled. What surfaces is a response to an accumulation of previous changes. Table 18.2 summarizes major forces for resistance to change, categorized by individual and organizational sources. Individual sources of resistance reside in basic human characteristics such as perceptions, personalities and needs. Organizational sources reside in the structural makeup of organizations themselves. It’s worth noting that not all change is good. Speed can lead to bad decisions, and some­ times those initiating change fail to realize the full magnitude of the effects or their true costs. Rapid, transformational change is risky, and some organizations have collapsed for this reason.7 Change agents need to carefully think through the full implications.

Overcoming resistance to change Eight tactics can help change agents deal with resistance to change.8 Let’s review them briefly.

Education and communication Resistance can be reduced through communicating with employees to help them see the logic of a change. Communication can reduce resistance on two levels. First, it fights the effects of misinformation and poor communication. If employees receive the full facts and get any

526  18 Organizational change and stress ­m anagement

misunderstandings cleared up, resistance should subside. Second, communication can be helpful in ‘selling’ the need for change. Indeed, research shows that the way the need for change is sold matters – change is more likely when the necessity of changing is packaged properly.9 A study of German companies revealed that changes are most effective when a company commu­ nicates its rationale balancing various stakeholder (shareholders, employees, community, customers) interests versus a rationale based on shareholder interests only.10 Another study of a changing organization in the Philippines found that formal change information sessions decreased employees’ anxiety about the change, while providing high-quality information about the change increased their commitment to it.11

Participation It’s difficult to resist a change decision in which we’ve participated. Assuming participants have the expertise to make a meaningful contribution, their involvement can reduce resistance, obtain commitment and increase the quality of the change decision. However, against these advantages are the negatives: potential for a poor solution and great consumption of time.

Building support and commitment When employees’ fear and anxiety are high, employee counselling and therapy, new-skills training or a short paid leave of absence may facilitate adjustment. Research on middle managers has shown that when managers or employees have low emotional commitment to change, they favour the status quo and resist it.12 Employees are also more accepting of changes when they are committed to the organization as a whole.13 So, firing up employees and empha­ sizing their commitment to the organization overall can also help them emotionally commit to the change rather than embrace the status quo.

Develop positive relationships People are more willing to accept changes if they trust the managers implementing them.14 One study surveyed 235 employees from a large housing corporation in The Netherlands that was experiencing a merger. Those who had a more positive relationship with their super­ visors, and who felt that the work environment supported development, were much more positive about the change process.15 Another set of studies found that individuals who were dispositionally resistant to change felt more positive about the change if they trusted the change agent.16 This research suggests that if managers are able to facilitate positive relation­ ships, they may be able to overcome resistance to change even among those who ordinarily don’t like changes.

Implementing changes fairly One way organizations can minimize negative impact is to make sure change is implemented fairly. Procedural fairness is especially important when employees perceive an outcome as negative (as we saw in Chapter 6), so it’s crucial that employees see the reason for the change and perceive its implementation as consistent and fair.17

Manipulation and co-optation Manipulation refers to covert influence attempts. Twisting and distorting facts to make them appear more attractive, withholding undesirable information and creating false rumours to get employees to accept a change are all examples of manipulation. If manage­ ment threatens to close down a particular manufacturing plant if that plant’s employees fail to accept an across-the-board pay cut, and if the threat is actually untrue, management is using manipulation. Co-optation, on the other hand, is a form of both manipulation and participation. It seeks to ‘buy off’ the leaders of a resistance group by giving them a key role in the change decision. The leaders’ advice is sought, not to seek a better decision, but to get their endorsement. Both manipulation and co-optation are relatively inexpensive and easy ways to gain the support of adversaries, but the tactics can backfire if the targets become aware that they are being tricked or used. Once discovered, the change agent’s credibility may drop to zero.

Resistance to change   527

Selecting people who accept change Research suggests that the ability to easily accept and adapt to change is related to personality – some people simply have more positive attitudes about change than others.18 It appears that people who adjust best to change are those who are open to experience, take a positive atti­ tude towards change, are willing to take risks and are flexible in their behaviour. One study of managers in Europe, the United States and Asia found that those with a positive self-­concept and high risk tolerance coped better with organizational change. A study of 258 police officers found those who were higher in growth-needs, internal locus of control and internal work motivation had more positive attitudes about organizational change efforts.19 Individuals higher in general mental ability are also better able to learn and adapt to changes in the work­ place.20 In sum, an impressive body of evidence shows organizations can facilitate change by selecting people predisposed to accept it. Besides selecting individuals who are willing to accept changes, it is also possible to select teams that are more adaptable. Studies have shown that teams that are strongly motivated by learning about and mastering tasks are better able to adapt to changing environments.21 This research suggests that it may be necessary to consider not just individual motivation, but also group motivation when trying to implement changes.

Coercion Last on the list of tactics is coercion; that is, the application of direct threats or force on the resisters. If the corporate management mentioned in the previous discussion really is deter­ mined to close a manufacturing plant if employees don’t acquiesce to a pay cut, then coercion would be the label attached to its change tactic. Other examples of coercion are threats of transfer, loss of promotions, negative performance evaluations and a poor letter of recom­ mendation. The advantages and drawbacks of coercion are approximately the same as those mentioned for manipulation and co-optation.

EMPLOYABILITY AND CHANGE Consistently research reveals that change management skills are among the most sought after by employers. But often change management is thought of as a senior management activity alone and the skills not necessary until later in a career. In fact, the role of the line manager is crucial. Below are eight key skills that have been identified for effective change management for line managers:22 1. Personal resilience – Change requires line managers to learn quickly how to deal with, for example, fewer people, less resources, new ways of working.

4. Coaching – Line managers needs coaching skills to deal with the individuals who are struggling with change. 5. Forcing clarity – When the details of the change are worked out, leaders need line managers who will help to shape the change and work out the implications of different ideas. 6. Managing others’ uncertainty – The best line managers act as strong leaders, explaining why the uncertainty is necessary, what action is being taken and when it will be resolved.

2. Trust-building – People look to their line manager for information on how a change is going to affect them.

7. Organization – Creating a sensible plan, thinking through the details of how things will work and then delivering in line with the plan.

3. Networking – Building networks of trust with other line managers is essential to enable line managers to support themselves and to implement the details of change effectively.

8. Follow-through – The best line managers only start initiatives they can see through to the end, and they track change progress in the same robust way they track operational business performance.

The politics of change No discussion of resistance to change would be complete without a brief mention of the politics of change. Because change invariably threatens the status quo, it inherently implies political activity.

528  18 Organizational change and stress ­m anagement

Politics suggests that the impetus for change is more likely to come from outside change agents, employees who are new to the organization (and have less invested in the status quo), or from managers slightly removed from the main power structure. Managers who have spent their entire careers with a single organization and eventually achieve a senior position in the hierarchy are often major impediments to change. Change, itself, is a very real threat to their status and position. Yet they may be expected to implement changes to demonstrate that they’re not merely caretakers. By acting as change agents, they can symbolically convey to various constituencies – shareholders, suppliers, employees, customers – that they are on top of problems and adapting to a dynamic environment. Of course, as you might guess, when forced to introduce change, these long-time power holders tend to implement incremental changes. Radical change is too threatening. This explains why boards of directors that recognize the imperative for rapid and radical change frequently turn to outside candidates for new leadership.23

‘Change is easier when you are in a crisis’ Not according to consultant Steve Crom. He writes that it is true that a crisis can galvanize people into dramatic action. But, does it bring out the best in the greatest number of people? Under stress, most people become more entrenched and are actually less open to learning. ‘Granted, renewing a business that is prosperous is difficult because it is easy to become complacent, to lose focus. However, if managers handle change properly, prosperity allows them the time to bring people along with them. That is the key to sustainable change. The challenge is to create a sense of urgency for change during times of success. A sense

MYTH OR SCIENCE ?

of urgency pushes people out of their comfort zone into the so-called innovation zone, where they are willing to move into something new and try new behaviours while leaving behind the situation that made them feel comfortable and secure. By contrast, in a crisis, people are always in danger of falling too far out of their comfort zone and into the panic zone, where fear either paralyses them or drives them away.’ Source: S. Crom, ‘Dispelling several myths about leadership for change’, available at  http://www.isixsigma.com/new-to-six-sigma/deployment/dispelling-severalmyths-about-leadership-change/. Accessed 18 September 2015.

Approaches to managing organizational change 3  Compare the four main approaches to managing organizational change.

Now we turn to several approaches to managing change: Lewin’s classic three-step model of the change process, Kotter’s eight-step plan, action research and organizational development.

Lewin’s three-step model

Kurt Lewin argued that successful change in organizations should follow three steps: unfreezing the status quo, movement to a desired end state, and refreezing the new change to make it permanent24 (see Figure 18.1). The status quo can be considered to be an equilibrium state. To move from this equilibrium – to overcome the pressures of both individual resistance and group conformity – unfreezing is necessary. It can be achieved in one of three ways (see Figure 18.2). The driving forces, which movement direct behaviour away from the status quo, can be increased. The restraining forces, which A change process hinder movement from the existing equilibrium, can be decreased. A third alternative is to that transforms the organization from the combine the first two approaches. Companies that have been successful in the past are likely to status quo to a desired encounter restraining forces because people question the need for change.25 Similarly, research end state. shows that companies with strong cultures excel at incremental change but are overcome by restraining forces against radical change.26 Consider a large oil company that decided to consolidate its three US divisional marketing offices in Seattle, Unfreezing Movement Refreezing San Francisco and Los Angeles into a single regional San Francisco office. The decision was made in New York, Figure 18.1  Lewin’s three-step change model unfreezing Changing to overcome the pressures of both individual resistance and group conformity.

Approaches to managing organizational change   529

and the people affected had no say whatsoever in the choice. The reorganization meant transferring more than 150 employees, elim­ Restraining inating some duplicate managerial positions and instituting a new forces hierarchy of command. The oil company’s management could expect employee resist­ Status quo ance to the consolidation. Those in Seattle or Los Angeles may not want to transfer to another city, pull children out of school, Driving make new friends, adapt to new co-workers, or undergo the forces reassignment of responsibilities. Positive incentives such as pay increases, liberal moving expenses and low-cost mortgage funds Time for new homes in San Francisco might encourage employees to Figure 18.2  Unfreezing the status quo accept the change. Management might also unfreeze acceptance of the status quo by removing restraining refreezing forces. It could counsel employees individually, hearing and clarifying each employee’s Stabilizing a change specific concerns and apprehensions. Assuming most are unjustified, the counsellor could intervention by assure employees there was nothing to fear and offer tangible evidence that restraining forces balancing driving and restraining forces. are unwarranted. If resistance is extremely high, management may have to resort to both reducing resistance and increasing the attractiveness of the alternative if the unfreezing is to driving forces be successful. Forces that direct Research on organizational change has shown that, to be effective, the actual change has to behaviour away from happen quickly.27 Organizations that build up to change do less well than those that get to and the status quo. through the movement stage quickly. restraining forces Once change has been implemented, if it is to be successful, the new situation needs to be Forces that hinder refrozen so that it can be sustained over time. Unless this last step is taken, there is a very high movement from the chance that the change will be short-lived and that employees will attempt to revert to the existing equilibrium. previous equilibrium state. The objective of refreezing, then, is to stabilize the new situation by balancing the driving and restraining forces. How could the oil company’s management refreeze its consolidation change? By system­ atically replacing temporary forces with permanent ones. For instance, management might impose a permanent upward adjustment of salaries. The formal rules and regulations governing behaviour of those affected by the change should also be revised to reinforce the new situation. Over time, of course, the work group’s own norms will evolve to sustain the new equilibrium. But until that point is reached, management will have to rely on more formal mechanisms.

Desired state

Kotter’s eight-step plan for implementing change John Kotter built on Lewin’s three-step model to create a more detailed approach for imple­ menting change.28 Kotter began by listing common mistakes managers make when trying to initiate change. These included the inability to create a sense of urgency about the need for change, failure to create a coalition for managing the change process, the absence of a vision for change and to effectively communicate that vision, not removing obstacles that could impede the achievement of the vision, failure to provide short-term and achievable goals, the tendency to declare victory too soon, and not anchoring the changes into the organization’s culture. Kotter then established eight sequential steps to overcome these problems:29 1. Establish a sense of urgency by creating a compelling reason for why change is needed. 2. Form a coalition with enough power to lead the change. 3. Create a new vision to direct the change and strategies for achieving the vision. 4. Communicate the vision throughout the organization. 5. Empower others to act on the vision by removing barriers to change and encouraging risk

taking and creative problem solving. 6. Plan for, create and reward short-term ‘wins’ that move the organization towards the new

vision.

530  18 Organizational change and stress ­m anagement

7. Consolidate improvements, reassess changes and make necessary adjustments in the new

programmes. 8. Reinforce the changes by demonstrating the relationship between new behaviours and

organizational success. Notice how Kotter’s eight-step plan builds on Lewin’s model. Kotter’s first four steps essen­ tially extrapolate on the ‘unfreezing’ stage. Steps 5 through 7 represent ‘movement’. And the final step works on ‘refreezing’. So Kotter’s contribution lies in providing managers and change agents with a more detailed guide for successfully implementing change.

Action research action research A change process based on systematic collection of data and then selection of a change action based on what the analysed data indicate.

organizational development (OD) A collection of planned change interventions, built on humanisticdemocratic values, that seeks to improve organizational effectiveness and employee well-being.

Action research refers to a change process based on the systematic collection of data and then

selection of a change action based on what the analysed data indicate.30 Its importance lies in providing a scientific methodology for managing planned change. The process of action research consists of five steps (note how they closely parallel the scientific method): diagnosis, analysis, feedback, action and evaluation. The change agent, often an outside consultant in action research, begins by gathering infor­ mation about problems, concerns and needed changes from members of the organization. This diagnosis is analogous to the physician’s search to find specifically what ails a patient. In action research, the change agent asks questions, interviews employees, reviews records and listens to the concerns of employees. Diagnosis is followed by analysis. What problems do people key in on? What patterns do these problems seem to take? The change agent synthesizes this information into primary concerns, problem areas and possible actions. Action research includes extensive involvement of the change targets. That is, the people who will be involved in any change programme must be actively involved in deter­ mining what the problem is and participating in creating the solution. So the third step – ­feedback – requires sharing with employees what has been found from steps one and two. The employees, with the help of the change agent, develop action plans for bringing about any needed change. Now the action part of action research is set in motion. The employees and the change agent carry out the specific actions to correct the problems that have been identified. The final step, consistent with the scientific underpinnings of action research, is evaluation of the action plan’s effectiveness. Using the initial data gathered as a benchmark, any subse­ quent changes can be compared and evaluated. Action research provides at least two specific benefits for an organization. First, it’s ­problem-focused. The change agent objectively looks for problems, and the type of problem determines the type of change action. Although this may seem intuitively obvious, a lot of change activities aren’t done this way. Rather, they’re solution-centred. The change agent has a favourite solution – for example, implementing flexitime, teams or a process reengineering programme – and then seeks out problems that the solution fits. Second, because action research so heavily involves employees in the process, resistance to change is reduced. In fact, once employees have actively participated in the feedback stage, the change process typically takes on a momentum of its own. The employees and groups that have been involved become an internal source of sustained pressure to bring about the change.

Organizational development Organizational development (OD) is a collection of change methods that try to improve organ­

izational effectiveness and employee well-being.31 OD methods value human and organizational growth, collaborative and participative processes and a spirit of inquiry.32 Contemporary OD borrows heavily from postmodern philosophy in placing heavy emphasis on the subjective ways in which people see their envi­ ronment. The focus is on how individuals make sense of their work environment. The change

Approaches to managing organizational change   531

agent may take the lead in OD, but there is a strong emphasis on collaboration. These are the underlying values in most OD efforts: 1. Respect for people. Individuals are perceived as being responsible, conscientious and caring.

They should be treated with dignity and respect. 2. Trust and support. An effective and healthy organization is characterized by trust, authen­

ticity, openness and a supportive climate. 3. Power equalization. Effective organizations deemphasize hierarchical authority and control. 4. Confrontation. Problems shouldn’t be swept under the rug. They should be openly

confronted. 5. Participation. The more that people who will be affected by a change are involved in the

decisions surrounding that change, the more they will be committed to implementing those decisions. What are some of the OD techniques or interventions for bringing about change? In the following pages, we present six interventions that change agents might consider using.

Sensitivity training sensitivity training Training groups that seek to change behaviour through unstructured group interaction.

A variety of names – sensitivity training, laboratory training, encounter groups and T-groups (training groups) – all refer to an early method of changing behaviour through unstructured group interaction.33 Members were brought together in a free and open environment in which participants discussed themselves and their interactive processes, loosely directed by a professional behav­ ioural scientist who created the opportunity to express ideas, beliefs and attitudes without taking any leadership role. The group was process-oriented, which means individuals learned through observing and participating rather than being told. Many participants found these unstructured groups intimidating, chaotic and damaging to work relationships. Although extremely popular in the 1960s, they diminished in use during the 1970s and have essentially disappeared. However, organizational interventions such as diversity training, executive coaching and team-building exercises are descendants of this early OD intervention technique.

Survey feedback survey feedback The use of questionnaires to identify discrepancies among member perceptions; discussion follows and remedies are suggested.

One tool for assessing attitudes held by organizational members, identifying discrepancies among member perceptions and solving these differences is the survey feedback approach.34 Everyone in an organization can participate in survey feedback, but of key importance is the organizational ‘family’ – the manager of any given unit and the employees who report directly to him or her. A questionnaire is usually completed by all members in the organization or unit. Organization members may be asked to suggest questions or may be interviewed to determine what issues are relevant. The questionnaire typically asks members for their percep­ tions and attitudes on a broad range of topics, including decision-making practices; commu­ nication effectiveness; coordination between units; and satisfaction with the organization, job, peers and their immediate supervisor. The data from this questionnaire are tabulated with data pertaining to an individual’s specific ‘family’ and to the entire organization and then distributed to employees. These data then become the springboard for identifying problems and clarifying issues that may be creating difficulties for people. Particular attention is given to the importance of encour­ aging discussion and ensuring that discussions focus on issues and ideas and not on attacking individuals. Finally, group discussion in the survey feedback approach should result in members iden­ tifying possible implications of the questionnaire’s findings. Are people listening? Are new ideas being generated? Can decision making, interpersonal relations or job assignments be improved? Answers to questions like these, it is hoped, will result in the group agreeing on commitments to various actions that will remedy the problems that are identified.

532  18 Organizational change and stress ­m anagement

Process consultation process consultation (PC) A meeting in which a consultant assists a client in understanding process events with which he or she must deal and identifying processes that need improvement.

Managers often sense that their unit’s performance can be improved, but they’re unable to identify what can be improved and how it can be improved. The purpose of process ­consultation (PC) is for an outside consultant to assist a client, usually a manager, ‘to perceive, understand and act upon process events’ with which the manager must deal.35 These might include work flow, informal relationships among unit members and formal communication channels. PC is similar to sensitivity training in its assumption that organizational effectiveness can be improved by dealing with interpersonal problems and in its emphasis on involvement. But PC is more task-directed than is sensitivity training. Consultants in PC are there to ‘give the client “insight” into what is going on around him, within him, and between him and other people.’36 They do not solve the organization’s problems. Rather, the consultant is a guide or coach who advises on the process to help the client solve his or her own problems. The consultant works with the client in jointly diagnosing what processes need improvement. The emphasis is on ‘jointly’ because the client develops a skill at analysing processes within his or her unit that can be continually called on long after the consultant is gone. In addition, by having the client actively participate in both the diagnosis and the development of alternatives, there will be greater understanding of the process and the remedy and less resistance to the action plan chosen.

Team building team building High interaction among team members to increase trust and openness.

We’ve noted throughout this book that organizations increasingly rely on teams to accomplish work tasks. Team building uses high-interaction group activities to increase trust and openness among team members, improve coordinative efforts and increase team performance.37 Here, we emphasize the intragroup level, meaning organizational families (command groups) as well as committees, project teams, self-managed teams and task groups. Team building typically includes goal-setting, development of interpersonal rela­ tions among team members, role analysis to clarify each member’s role and responsibili­ ties, and team process analysis. It may emphasize or exclude certain activities, depending on the purpose of the development effort and the specific problems with which the team is confronted. Basically, however, team building uses high interaction among members to increase trust and openness.

Intergroup development intergroup development OD efforts to change the attitudes, stereotypes and perceptions that groups have of each other.

A major area of concern in OD is dysfunctional conflict among groups. Intergroup ­development seeks to change groups’ attitudes, stereotypes and perceptions about each other. Here, training sessions closely resemble diversity training (in fact, diversity training largely evolved from intergroup development in OD), except rather than focusing on demographic differences, they focus on differences among occupations, departments or divisions within an organization. For example, in one company, the engineers saw the accounting department as composed of shy and conservative types, and the human resources department as having a bunch of ‘ultra-liberals who are more concerned that some protected group of employees might get their feelings hurt than with the company making a profit’. Such stereotypes can have an obvious negative impact on the coordination efforts between the departments. Among several approaches for improving intergroup relations, a popular method empha­ sizes problem solving.38 Each group meets independently to develop lists of its perception of itself, the other group, and how it believes the other group perceives it. The groups then share their lists, after which similarities and differences are discussed. Differences are clearly articu­ lated, and the groups look for the causes of the disparities. Are the groups’ goals at odds? Were perceptions distorted? On what basis were stereotypes formulated? Have some differences been caused by misunderstandings of intentions? Have words and concepts been defined differently by each group? Answers to questions like these clarify the exact nature of the conflict. Once the causes of the difficulty have been identi­ fied, the groups can move to the integration phase – working to develop solutions that will

Approaches to managing organizational change   533

improve relations between the groups. Subgroups can be formed of members from each of the conflicting groups to conduct further diagnoses and formulate alternative solutions.

Appreciative inquiry appreciative inquiry (AI) An approach that seeks to identify the unique qualities and special strengths of an organization, which can then be built on to improve performance.

Most OD approaches are problem-centred. They identify a problem or set of problems, then look for a solution. Appreciative inquiry (AI) accentuates the positive.39 Rather than looking for problems to fix, this approach seeks to identify the unique qualities and special strengths of an organization, which can then be built on to improve performance. That is, it focuses on an organization’s successes rather than on its problems. The AI process essentially consists of four steps, often played out in a large-group meeting over a two- or three-day time period and overseen by a trained change agent. The first step is discovery. The idea is to find out what people think are the strengths of the organization. For instance, employees are asked to recount times they felt the organization worked best or when they specifically felt most satisfied with their jobs. The second step is dreaming. The information from the discovery phase is used to speculate on possible futures for the organization such as what the organization will be like in five years. The third step is design. Based on the dream articulation, participants focus on finding a common vision of how the organization will look and agree on its unique qualities. The fourth stage seeks to define the organization’s destiny. In this final step, participants discuss how the organization is going to fulfil its dream. This typically includes the writing of action plans and development of implementation strategies. AI has proven to be an effective change strategy in organizations such as BP, Nokia and the electrical retailer Currys. For instance, during a three-day AI seminar at a logistics firm, workers were asked to recall ideal work experiences – when they were treated with respect, when trucks were loaded to capacity or arrived on time. Assembled into nine groups, the workers were then encouraged to devise money-saving ideas. A team of short-haul drivers came up with 12 cost-cutting and revenue-generating ideas, one of which could alone generate €750,000 in additional profits.40

The state of perpetual change It’s often said that change brings opportunity. Managers in the midst of organizational change often do acquire new perspectives on how their businesses can run more efficiently. This is never more true than when an organization expands into new global regions and learns from the best practices that each international business culture has to offer. However, changing first and then seeing what opportunities arise is reactive; companies that expand globally this way often learn by painful trial and error. Have you ever considered the converse of the opening statement, that perhaps opportunity should bring change? Organizations that have successfully met the opportunity of globalization have embraced the concept of perpetual change. Their managers create an organizational culture of change, plan for overcoming resistance to new initiatives, and address the stress implications of a constantly evolving, worldwide workforce. Many of the successful global organizations we have discussed in this book are in a state of perpetual change.

glOBal They are committed to the constant changes needed to follow current trends around the world. From their cutting-edge global technology to their virtual collaborations worldwide, these companies rapidly reorganize people and resources to find the best new ideas wherever they are and sell them wherever there is a market. Their organizational cultures champion change agents and challenge the status quo, rewarding individuals who quickly act on new opportunities. There is no one right way to ‘go global’. Experts vary on how to incorporate a new subsidiary into the organization chart, how much to centralize or decentralize leadership and decision making, how to transmit an organizational culture across the internet, and so forth. But they do agree that the decision to globalize should include a commitment to perpetual change . . . and growth. Sources: G. Anders, ‘Solve puzzle, get job’, Forbes, 6 May 2013, pp. 46–8; M.-G. Seo, M. S. Taylor, N. S. Hill, X. Zhang, P. E. Tesluk and N. M. Lorinkova, ‘The role of affect and leadership during organizational change’, Personnel Psychology, 65 (2012), pp. 121–65; and K. Wilson and Y. L. Doz, ‘10 rules for managing global innovation’, Harvard Business Review, October 2012, pp. 85–90.

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Creating a culture for change 4  Demonstrate two ways of creating a culture for change.

We’ve considered how organizations can adapt to change. Recently, some OB scholars have focused on a more proactive approach to change – how organizations can embrace change by transforming their cultures. In this section we review two such approaches: stimulating an innovative culture and creating a learning organization. We also address the issue of organiz­ ational change and stress.

Stimulating a culture of innovation How can an organization become more innovative? An excellent model is W. L. Gore, best known as the maker of Gore-Tex fabric.41 Gore has developed a reputation as one of the world’s most innovative companies (and consistently ranks highly in the European Great Place to Work list42) by developing a stream of diverse products – including guitar strings, dental floss, medical devices and fuel cells. What’s the secret of Gore’s success? What can other organizations do to duplicate its track record for innovation? Although there is no guaranteed formula, certain characteristics surface again and again when researchers study innovative organizations. We’ve grouped them into structural, cultural and human resource categories. Change agents should consider intro­ ducing these characteristics into their organization if they want to create an innovative climate. Before we look at these, however, let’s clarify what we mean by innovation.

Definition of innovation innovation A new idea applied to initiating or improving a product, process or service.

We said change refers to making things different. Innovation is a more specialized kind of change. Innovation is a new idea applied to initiating or improving a product, process or service.43 So all innovations involve change, but not all changes necessarily involve new ideas or lead to significant improvements. Innovations can range from small incremental improve­ ments, such as tablets, to radical breakthroughs, such as Nissan’s electric Leaf car.

Sources of innovation Structural variables have been the most studied potential source of innovation.44 A compre­ hensive review of the structure–innovation relationship leads to the following conclusions.45 1. Organic structures positively influence innovation. Because they’re lower in vertical differ­

entiation, formalization and centralization, organic organizations facilitate the flexibility, adaptation and cross-fertilization that make the adoption of innovations easier. 2. Long tenure in management is associated with innovation. Managerial tenure appar­

ently provides legitimacy and knowledge of how to accomplish tasks and obtain desired outcomes. 3. Innovation is nurtured when there are slack resources. Having an abundance of resources

allows an organization to afford to purchase innovations, bear the cost of instituting them and absorb failures. 4. Inter-unit communication is high in innovative organizations.46 These organizations are

high users of committees, task forces, cross-functional teams and other mechanisms that facilitate interaction across departmental lines. Innovative organizations tend to have similar cultures. They encourage experimentation. They reward both successes and failures. They celebrate mistakes. Unfortunately, in too many organizations, people are rewarded for the absence of failures rather than for the presence of successes. Such cultures extinguish risk taking and innovation. People will suggest and try new ideas only when they feel such behaviours exact no penalties. Managers in innovative organiz­ ations recognize that failures are a natural by-product of venturing into the unknown.

Creating a culture for change   535

idea champions Individuals who take an innovation and actively and enthusiastically promote the idea, build support, overcome resistance and ensure that the idea is implemented.

Within the human resources category, we find that innovative organizations actively promote the training and development of their members so that they keep current, offer high job security so employees don’t fear getting fired for making mistakes, and encourage individuals to become champions of change. Once a new idea is developed, idea champions actively and enthusiastically promote the idea, build support, overcome resistance and ensure that the innovation is implemented.47 The evidence indicates that champions have common personality characteristics: extremely high self-confidence, persistence, energy and a tendency to take risks. Idea champions also display charac­ teristics associated with transformational leadership. They inspire and energize others with their vision of the potential of an innovation and through their strong personal conviction in their mission. They are also good at gaining the commitment of others to support their mission. In addition, idea champions have jobs that provide considerable decision-making discretion. This autonomy helps them introduce and implement inno­ vations in organizations.48 Do successful idea champions do things differently in different cultures? Yes.49 People in collectivist cultures prefer appeals for cross-functional support for inno­ vation efforts; people in high power distance cultures prefer champions to work closely with those in authority to approve innovative activities before work is begun; and the higher the uncertainty avoidance of a society, the more champions should work within the organiza­ tion’s rules and procedures to develop the innovation. These findings suggest that effective managers will alter their organization’s championing strategies to reflect cultural values. So, for instance, although idea champions in Russia might succeed by ignoring budgetary limita­ tions and working around confining procedures, champions in Austria, Denmark, Germany or other cultures high in uncertainty avoidance will be more effective by closely following budgets and procedures.

Creating a learning organization

©Unipart Group 2016/ www.unipart.com

Another way organizations can proactively manage change is to make continuous growth part of its culture – to become a learning organization.50 This idea is popular with one survey finding that 39 per cent of employees in the European Union considering themselves to be working in a learning organization.51

Unipart has transformed from a company known for automotive parts in the 1970s to the multinational logistics, manufacturing and consultancy group it has become today. The transformation began in 1987 under the leadership of John Neill who was an early proponent of learning organization principles that continues to this day. The firm seeks continuous improvement and learning that will benefit the organization and then adapts them, integrates them and spreads best practice across the global operations. Source: www.unipartconsulting.com

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What is a learning organization? learning organization An organization that has developed the continuous capacity to adapt and change. single-loop learning A process of correcting errors using past routines and present policies. double-loop learning A process of correcting errors by modifying the organization’s objectives, policies and standard routines.

A learning organization is an organization that has developed the continuous capacity to adapt and change. Just as individuals learn, so too do organizations. ‘All organizations learn, whether they consciously choose to or not – it is a fundamental requirement for their sustained existence.’52 However, some organizations just do it better than others. Most organizations engage in what has been called single-loop learning.53 When errors are detected, the correction process relies on past routines and present policies. In contrast, learning organizations use double-loop learning. When an error is detected, it’s corrected in ways that involve the modification of the organization’s objectives, policies and standard routines. Double-loop learning challenges deeply rooted assumptions and norms within an organization. In this way, it provides opportunities for radically different solutions to problems and dramatic jumps in improvement. There are five basic characteristics of a learning organization:54 1. There exists a shared vision that everyone agrees on. 2. People discard their old ways of thinking and the standard routines they use for solving

problems or doing their jobs. 3. Members think of all organizational processes, activities, functions and interactions with

the environment as part of a system of interrelationships. 4. People openly communicate with each other (across vertical and horizontal boundaries)

without fear of criticism or punishment. 5. People sublimate their personal self-interest and fragmented departmental interests to work

together to achieve the organization’s shared vision. So, a learning organization is an organization in which people put aside their old ways of thinking, learn to be open with each other, understand how their organization really works, form a plan or vision that everyone can agree on, and then work together to achieve that vision.55 Proponents of the learning organization envision it as a remedy for three fundamental problems inherent in traditional organizations: fragmentation, competition and reactive­ ness.56 First, fragmentation based on specialisation creates ‘walls’ and ‘chimneys’ that separate different functions into independent and often warring fiefdoms. Second, an overemphasis on competition often undermines collaboration. Members of the management team compete with one another to show who is right, who knows more, or who is more persuasive. Divisions compete with one another when they ought to cooperate and share knowledge. Team project leaders compete to show who the best manager is. And third, reactiveness misdirects manage­ ment’s attention to problem solving rather than creation. The problem solver tries to make something go away, while a creator tries to bring something new into being. An emphasis on reactiveness pushes out innovation and continuous improvement and, in its place, encourages people to run around ‘putting out fires’.

Managing learning What can managers do to make their firms learning organizations? Here are some suggestions: ●

●

●

Establish a strategy. Management needs to make explicit its commitment to change, inno­ vation and continuous improvement. Redesign the organization’s structure. The formal structure can be a serious impediment to learning. By flattening the structure, eliminating or combining departments and increasing the use of cross-functional teams, interdependence is reinforced and boundaries between people are reduced. Reshape the organization’s culture. To become a learning organization, managers need to demonstrate by their actions that taking risks and admitting failures are desirable traits. That means rewarding people who take chances and make mistakes. And management

Work stress and its management   537

needs to encourage functional conflict. ‘The key to unlocking real openness at work,’ says one expert on learning organizations, ‘is to teach people to give up having to be in agreement. We think agreement is so important. Who cares? You have to bring paradoxes, conflicts and dilemmas out in the open, so collectively we can be more intelligent than we can be individually.’57

Organizational change and stress Think about the times you have felt stressed during your work life. Look past the everyday stress factors that can spill over to the workplace, like a traffic jam that makes you late for work or a broken coffee machine that keep you from your morning java. What were the more memo­ rable and lasting stressful times? For many people, these were caused by organizational change. Researchers are increasingly studying the effects of organizational change on employees. We are interested in determining the specific causes and mitigating factors of stress in order to learn how to manage organizational change effectively. The overall findings are that organ­ izational changes incorporating OB knowledge of how people react to stressors may yield more effective results than organizational changes that are only objectively managed through goal-setting.58 Not surprisingly, the role of leadership is critical. A recent study found that transformational leaders can help shape employee affect so employees stay committed to the change and do not perceive it as stressful.59 Another study indicated that a positive orientation towards change before specific changes are planned will predict how employees deal with new initiatives. A positive change orientation will decrease employees’ stress when they go through organizational changes and will increase their positive attitudes. Managers can be continually working to increase employees’ self-efficacy, change-­related attitudes and perceived control to create this positive change orientation. For instance, they can use role clarification and continual rewards to increase self-efficacy. They can also enhance employees’ perceived control and positive change attitudes by including them from the planning stages through to the application of new processes.60 Another study added the need for increasing the amount of communication to employees during change, assessing and enhancing the employees’ psychological resilience through offering social support, and training employees in emotional self-regulation techniques.61 Through these methods, managers can help employees keep their stress levels low and their commitment high. Often, organizational changes are stressful because employees perceive aspects of the changes as threatening. These employees are more likely to quit, partially in reaction to their stress. To reduce the perception of threat, employees need to see the organizational changes as fair. Research indicates that those who have a positive change orientation before changes are planned are less likely to perceive of changes as unfair or threatening.

Work stress and its management 5 Identify potential sources of stress.

stress An unpleasant psychological process that occurs in response to environmental pressures.

Most of us are aware that employee stress is an increasing problem in organizations. Friends tell us they’re stressed out from greater workloads and having to work longer hours because of downsizing at their companies. Parents talk about the lack of job stability in today’s world and reminisce about a time when a job with a large company implied lifetime security. We read surveys in which employees complain about the stress created in trying to balance work and family responsibilities.62 Indeed, as Figure 18.3 shows, work is, for many people, the most important source of stress in life. In this section we’ll look at the causes and consequences of stress, and then consider what individuals and organizations can do to reduce it.

What is stress? Stress is a dynamic condition in which an individual is confronted with an opportunity, demand or resource related to what the individual desires and for which the outcome is perceived to

538  18 Organizational change and stress ­m anagement

be both uncertain and important.63 This is a complicated definition. Let’s look at its components more closely. Area Causes most stress Stress is not necessarily bad in and of itself. Although 34% My job stress is typically discussed in a negative context, it also has My finances 30% a positive value.64 It’s an opportunity when it offers poten­ Health 17% tial gain. Consider, for example, the superior performance Other 19% that an athlete or stage performer gives in tense situations. Figure 18.3  Work is the biggest source of stress for most Such individuals often use stress positively to rise to the Source: Based on 2013 poll of over 2,000 UK individuals, www.mind.org. occasion and perform at or near their maximum. Similarly, uk/news/8566_work_is_biggest_cause_of_stress_in_peoples_lives. Accessed many professionals see the pressures of heavy workloads 31 July 2013. and deadlines as positive challenges that enhance the quality of their work and the satisfaction they get from their job. In short, some stress can be good, and some can be bad. Researchers have argued that c­ hallenge stressors – or stressors associated with work load, pressure to complete tasks and time challenge stressors urgency – operate quite differently from hindrance stressors – or stressors that keep you from Stressors associated with work load, reaching your goals (red tape, office politics, confusion over job responsibilities). Although pressure to complete research on challenge and hindrance stress is just starting to accumulate, early evidence suggests tasks and time urgency. that challenge stressors are less harmful (produce less strain) than hindrance stressors.65 Researchers have sought to clarify the conditions under which each type of stress exists. hindrance stressors It appears that employees who have stronger affective commitment to their organizations Stressors that keep you from reaching your can transfer psychological stress into greater focus and higher sales performance, whereas goals (red tape, office employees with low levels of commitment perform worse under stress.66 And when challenge politics, confusion over stress increases, those with high levels of organizational support have higher role-based perfor­ job responsibilities). mance, but those with low levels of organizational support do not.67 More typically, stress is associated with demands and resources. Demands are responsi­ demands Responsibilities, bilities, pressures, obligations and even uncertainties that individuals face in the workplace. pressures, obligations Resources are things within an individual’s control that can be used to resolve the demands. and even uncertainties Let’s discuss what this demands–resources model means.68 that individuals face in When you take a test at school or you undergo your annual performance review at work, the workplace. you feel stress because you confront opportunities and performance pressures. A good perfor­ resources mance review may lead to a promotion, greater responsibilities and a higher salary. A poor Things within an review may prevent you from getting a promotion. An extremely poor review might even individual’s control that result in you being fired. In such a situation, to the extent that you can apply resources to the can be used to resolve demands – such as being prepared, placing the exam or review in perspective, or obtaining demands. social support – you will feel less stress. Research suggests that adequate resources help reduce the stressful nature of demands when demands and resources match. For example, if emotional demands are stressing you, then having emotional resources in the form of social support is especially important. Conversely, if the demands are cognitive – say, information overload – then job resources in the form of computer support or information are more important. Thus, under the demands and resources perspective on stress, having resources to cope with stress is just as important in offsetting stress as demands are in increasing it.69 ’What area of your life causes you the most stress?’

Work-related stress ●

Work-related stress is the second most frequently reported work-related health problem in Europe – after musculoskeletal disorders. Around half of workers consider it to be common in their workplace.

●

50–60 per cent of all lost working days can be attributed to work-related stress.

●

In a recent European poll conducted by European Agency for Safety and Health at Work, the most common causes

FACE THE FACTS of work-related stress cited were job reorganization or job insecurity (72 per cent of respondents), working long hours or excessive workload (66 per cent) and being bullied or harassed at work (59 per cent). ●

The same poll showed that around 4 in 10 workers think that stress is not handled well in their workplace.

Source: www.healthy-workplaces.eu. Accessed 20 August 2015.

Work stress and its management   539

Potential sources of stress What causes stress? As the model in Figure 18.4 shows, there are three categories of potential stressors: environmental, organizational and personal. Let’s take a look at each.70

Environmental factors Just as environmental uncertainty influences the design of an organization’s structure, it also influences stress levels among employees in that organization. Indeed, evidence indi­ cates that uncertainty is the biggest reason people have trouble coping with organizational changes.71 There are three main types of environmental uncertainty: economic, political and technological. Changes in the business cycle create economic uncertainties. When the economy is contracting, for example, people become increasingly anxious about their job security. Political uncertainties are more pronounced in some countries than others and vary with time. Even for countries with relatively stable political systems, such as most European countries, political threats and changes do occur and certainly have in the past, which can induce stress. Technological change is a third type of environmental factor that can cause stress. Because new innovations can make an employee’s skills and experience obsolete in a very short time, computers, robotics, automation and similar forms of technological innovation are a threat to many people and cause them stress.

Organizational factors There is no shortage of factors within an organization that can cause stress. Pressures to avoid errors or complete tasks in a limited time, work overload, a demanding and insensitive boss and unpleasant co-workers are a few examples. We’ve categorized these factors around task, role and interpersonal demands.72 Task demands are factors related to a person’s job. They include the design of the individ­ ual’s job (autonomy, task variety, degree of automation), working conditions and the physical work layout. Assembly lines, for instance, can put pressure on people when the line’s speed is perceived as excessive. Similarly, working in an overcrowded room or in a visible location where noise and interruptions are constant can increase anxiety and stress.73 Increasingly, as customer service becomes ever more important, emotional labour is a source of stress.74 Imagine being a flight attendant for KLM or a hostess at Galeries Lafayette. Do you think you could put on a happy face when you’re having a bad day?

Potential sources Environmental factors • Economic uncertainty • Political uncertainty • Technological change

Individual differences • Perception • Job experience • Social support • Belief in locus of control • Self-efficacy • Hostility

Organizational factors • Task demands • Role demands • Interpersonal demands

Experienced stress

Personal factors • Family problems • Economic problems • Personality

Figure 18.4  A model of stress

Consequences Physiological symptoms • Headaches • High blood pressure • Heart disease

Psychological symptoms • Anxiety • Depression • Decrease in job satisfaction

Behavioural symptoms • Productivity • Absenteeism • Turnover

Jeff Gilbert / Alamy Stock Photo

540  18 Organizational change and stress ­m anagement

In a bid to address the high levels of stress in the UK’s National Health Service and ultimately reduce the bill for staff absence which stood at €3.3 billion a year, the Chief Executive announced that hospitals would provide counselling, healthy food and provide exercise classes such as Zumba and Yoga targeting 1.3 million employees.

Role demands relate to pressures placed on a person as a function of the particular role she plays in the organization. Role conflicts create expectations that may be hard to reconcile or satisfy. Role overload is experienced when the employee is expected to do more than time permits. Role ambiguity is created when role expectations are not clearly understood and the employee is not sure what he or she is to do. Interpersonal demands are pressures created by other employees. Lack of social support from colleagues and poor interpersonal relationships can cause stress, especially among employees with a high social need. A rapidly growing body of research has also shown that negative co-worker and supervisor behaviours, including fights, bullying, incivility, racial harassment and sexual harassment, are especially strongly related to stress at work.75

Personal factors The typical individual works about 40 to 50 hours a week. But the experiences and prob­ lems that people encounter in the other 120-plus hours each week can spill over to the job. Our final category, then, encompasses factors in the employee’s personal life. Primarily, these factors are family issues, personal economic problems and inherent personality characteristics. National surveys consistently show that people hold family and personal relationships dear. Marital difficulties, the breaking of a close relationship and discipline troubles with children are examples of relationship problems that create stress for employees that aren’t left at the front door when they arrive at work.76 Economic problems created by individuals overextending their financial resources is another set of personal troubles that can create stress for employees and distract their attention from their work. Regardless of income level – people who make €80,000 per year seem to have as much trouble handling their finances as those who earn €18,000 – some people are poor money managers or have wants that always seem to exceed their earning capacity.

Work stress and its management   541

Studies in three diverse organizations found that stress symptoms reported prior to begin­ ning a job accounted for most of the variance in stress symptoms reported nine months later.77 This led the researchers to conclude that some people may have an inherent tendency to accen­ tuate negative aspects of the world in general. If this is true, then a significant individual factor that influences stress is a person’s basic disposition. That is, stress symptoms expressed on the job may actually originate in the person’s personality.78

Stressors are additive A fact that tends to be overlooked when stressors are reviewed individually is that stress is an additive phenomenon.79 Stress builds up. Each new and persistent stressor adds to an indi­ vidual’s stress level. So a single stressor may be relatively unimportant in and of itself, but if it’s added to an already high level of stress, it can be too much. If we want to appraise the total amount of stress an individual is under, we have to sum up their opportunity stresses, constraint stresses and demand stresses.

Individual differences Some people thrive on stressful situations, while others are overwhelmed by them. What is it that differentiates people in terms of their ability to handle stress? What individual differ­ ence variables moderate the relationship between potential stressors and experienced stress? At least four variables – perception, job experience, social support and personality – have been found to be relevant. We have demonstrated that employees react in response to their perception of reality rather than to reality itself (see Chapter 5). Perception, therefore, will moderate the relation­ ship between a potential stress condition and an employee’s reaction to it. For example, one person’s fear that they’ll lose their job because their company is laying off personnel may be perceived by another as an opportunity to get a large redundancy payment and start their own business. So stress potential doesn’t lie in objective conditions; it lies in an employee’s interpre­ tation of those conditions. The evidence indicates that experience on the job tends to be negatively related to work stress. Why? Two explanations have been offered.80 First is the idea of selective withdrawal. Voluntary turnover is more probable among people who experience more stress. Therefore, people who remain with an organization longer are those with more stress-resistant traits or those who are more resistant to the stress characteristics of their organization. Second, people eventually develop coping mechanisms to deal with stress. Because this takes time, senior members of the organization are more likely to be fully adapted and should experience less stress. Social support – that is, collegial relationships with co-workers or supervisors – can buffer the impact of stress.81 This is among the best-documented relationships in the stress literature. Social support acts as a palliative, mitigating the negative effects of even high-strain jobs. Perhaps the most widely studied personality trait in stress is neuroticism (which we discussed in Chapter 4). As you might expect, neurotic individuals are more prone to experience psycho­ logical strain.82 Evidence suggests that neurotic individuals are more prone to believe there are stressors in their work environments, so part of the problem is that they believe their environ­ ments are more threatening. They also tend to select less adaptive coping mechanisms, relying on avoidance as a way of dealing with problems rather than attempting to resolve them.83 Workaholism is another personal characteristic related to stress levels. Workaholics are people obsessed with their work; they put in an enormous number of hours, think about work even when not working, and create additional work responsibilities to satisfy an inner compulsion to work more. In some ways, they might seem like ideal employees. That’s probably why when most people are asked in interviews what their greatest weakness is, they reflexively say, ‘I just work too hard’. However, there is a difference between working hard and working compulsively. Workaholics are not necessarily more productive than other employees, despite their extreme efforts. The strain of putting in such a high level of work effort eventually begins to wear on the workaholic, leading to higher levels of work–life conflict and psychological burnout.84

542  18 Organizational change and stress ­m anagement

Cultural differences It doesn’t appear that personality effects on stress are different across cultures. One study of employees in Hungary, Italy, the United Kingdom, Israel and the United States found Type A personality traits (see Chapter 4) predicted stress equally well across countries.85 A study of 5,270 managers from 20 countries found individuals from individualistic countries experienced higher levels of stress due to work interfering with family than did individuals from collectivist countries in Asia and Latin America.86 The authors proposed that this may occur because, in collectivist cultures, working extra hours is seen as a sacrifice to help the family, whereas in individualistic cultures, work is seen as a means to personal achievement that takes away from the family. Evidence suggests that stressors are associated with perceived stress and strains among employees in different countries. In other words, stress is equally bad for employees of all cultures.87

Consequences of stress 6 Identify the consequences of stress.

Stress shows itself in a number of ways, such as high blood pressure, ulcers, irritability, difficulty making routine decisions, loss of appetite, accident proneness, and the like. These symptoms fit under three general categories: physiological, psychological and behavioural symptoms.

Physiological symptoms Most of the early concern with stress was directed at physiological symptoms. This was predominantly due to the fact that the topic was researched by specialists in the health and medical sciences. This research led to the conclusion that stress could create changes in metab­ olism, increase heart and breathing rates, increase blood pressure, bring on headaches and induce heart attacks. Evidence now clearly suggests stress may have harmful physiological effects. One study linked stressful job demands to increased susceptibility to upper respiratory illnesses and poor immune system functioning, especially for individuals with low self-­efficacy.88 A long-term study conducted in the United Kingdom found that job strain was associated with higher levels of coronary heart disease.89 Still another study conducted with Danish human services workers found that higher levels of psychological burnout at the work-unit level were related to significantly higher levels of sickness absence.90 Many other studies have shown similar results linking work stress to a variety of indicators of poor health.

Psychological symptoms Job dissatisfaction is an obvious cause of stress. But stress shows itself in other psychological states – for instance, tension, anxiety, irritability, boredom and procrastination. For example, a study that tracked physiological responses of employees over time found that stress due to high workloads was related to higher blood pressure and lower emotional wellbeing.91 Jobs that make multiple and conflicting demands or that lack clarity about the incumbent’s duties, authority and responsibilities increase both stress and dissatisfaction.92 Similarly, the less control people have over the pace of their work, the greater their stress and dissatisfaction. Jobs that provide a low level of variety, significance, autonomy, feedback and identity appear to create stress and reduce satisfaction and involvement in the job.93 Not everyone reacts to autonomy in the same way, however. For those with an external locus of control, increased job control increases the tendency to experience stress and exhaustion.94

Behavioural symptoms Research on behaviour and stress has been conducted across several countries and over time, and the relationships appear relatively consistent. Behaviour-related stress symptoms include reductions in productivity, absence and turnover, as well as changes in eating habits, increased smoking or consumption of alcohol, rapid speech, fidgeting and sleep disorders.95 A significant amount of research has investigated the stress–performance relationship. The most widely studied pattern of this relationship is the inverted U shown in Figure 18.5.96

Work stress and its management   543

The  logic underlying the figure is that low to moderate levels of stress stimulate the body and increase its ability to react. Individuals then often perform their tasks better, more intensely or more rapidly. But too much stress places unattain­ able demands on a person, which result in lower performance. In spite of the popularity and intuitive appeal of the inverted-U model, it doesn’t get a lot of empirical support.97 So we should be careful of assuming it accurately depicts the stress–perfor­ mance relationship. As we mentioned earlier, researchers have begun to differ­ Low entiate challenge and hindrance stressors, showing that these Low Stress High two forms of stress have opposite effects on job behaviours, especially job performance. A meta-analysis of responses Figure 18.5  The inverted-U relationship between from more than 35,000 individuals showed role ambiguity, stress and job performance role conflict, role overload, job insecurity, environmental uncertainty and situational constraints were all consistently negatively related to job performance.98 There is also evidence that challenge stress improves job performance in a supportive work environment, whereas hindrance stress reduces job performance in all work environments.99 Performance

High

Managing stress

7  Contrast the individual and organizational approaches to managing stress.

Because low to moderate levels of stress can be functional and lead to higher performance, management may not be concerned when employees experience them. Employees, however, are likely to perceive even low levels of stress as undesirable. It’s not unlikely, therefore, for employees and management to have different notions of what constitutes an acceptable level of stress on the job. What management may consider to be ‘a positive stimulus that keeps the adrenaline running’ is very likely to be seen as ‘excessive pressure’ by the employee. Keep this in mind as we discuss individual and organizational approaches towards managing stress.100

Individual approaches An employee can take personal responsibility for reducing stress levels. Individual strategies that have proven effective include implementing time-management techniques, increasing physical exercise, relaxation training and expanding social support networks. Many people manage their time poorly. The well-organized employee, like the well-­organized student, can often accomplish twice as much as the person who is poorly organized. So an understanding and utilization of basic time management principles can help individuals better cope with tensions created by job demands.101 A few of the best-known time-­management principles are (1) making daily lists of activities to be accomplished, (2) prioritizing activities by importance and urgency, (3) scheduling activities according to the priorities set, (4) knowing your daily cycle and handling the most demanding parts of your job when you are most alert and productive, and (5) avoiding electronic distractions like frequently checking email, which can limit attention and reduce efficiency.102 These time-management skills can help minimize procrastination by focusing efforts on immediate goals and boosting motivation even in the face of tasks that are less desirable.103 Physicians have recommended non-competitive physical exercise, such as aerobics, walking, jogging, swimming and riding a bicycle, as a way to deal with excessive stress levels. These activities increase lung capacity, lower the resting heart rate and provide a mental diversion from work pressures, effectively reducing work-related levels of stress.104 Individuals can also teach themselves to reduce tension through relaxation techniques such as meditation, hypnosis and deep breathing. The objective is to reach a state of deep physical relaxation, in which you focus all your energy on release of muscle tension.105 Deep relaxation for 15 or 20 minutes a day releases strain and provides a pronounced sense of peacefulness, as well as significant changes

544  18 Organizational change and stress ­m anagement

OB IN THE NEWS

High cost of mental health problems forces employers to act by Tim Smedley Every year, one in four adults in the UK experiences mental health problems, and evidence suggests the problem is taking an increasing toll on businesses. The Office for National Statistics reported 15.2 million days of sickness absence across the UK in 2013 caused by stress, anxiety or depression – significantly higher than the 11.8 million days lost in 2010. The absences are thought to cost UK employers €35 billion a year. However, the part played by employers and the working environments they provide is only now becoming better understood. Employee assistance programmes (EAPs) are commonly offered by large and small employers, with helplines to offer advice to employees on finance, relationships and – increasingly – mental health.

Other measures available include workshops on mindfulness, mental health awareness training and promoting the ‘Five ways to well-being’ health advice, namely: connect with family and friends, be physically active, take notice of the world around you, keep learning new things and give generously. Andy Buxton, health and well-being manager at National Grid, says he used a detailed business case for health and well-being expenditure to the board, proving that ‘for every pound spent on psychological rehabilitation processes we got back at least two in returning people to work early. But now they just see it as the right thing to do,’ he says. To not do anything would be damaging to individual and employer alike.

Source: Adapted from Tim Smedley, ‘High cost of mental health problems forces employers to act’, Financial Times, 7 July 2014. © The Financial Times Limited. All Rights Reserved. Pearson Education Ltd. is responsible for providing this adaptation of the original article.

in heart rate, blood pressure and other physiological factors. A growing body of research shows that simply taking breaks from work at routine intervals can facilitate psychological recovery and reduce stress significantly and may improve job performance, and these effects are even greater if relaxation techniques are employed.106 As we have noted, friends, family or work colleagues can provide an outlet when stress levels become excessive. Expanding your social support network provides someone to hear your problems and offer a more objective perspective on a stressful situation than your own.

Organizational approaches Several of the factors that cause stress – particularly task and role demands – are controlled by management. As such, they can be modified or changed. Strategies that management might want to consider include improved personnel selection and job placement, training, use of realistic goal setting, redesigning of jobs, increased employee involvement, improved organiz­ ational communication and establishment of corporate wellness programmes. Certain jobs are more stressful than others but, as we learned earlier in this chapter, indi­ viduals differ in their response to stressful situations. We know, for example, that individuals with little experience or an external locus of control tend to be more prone to stress. Selection and placement decisions should take these facts into consideration. Obviously, management shouldn’t restrict hiring to only experienced individuals with an internal locus, but such indi­ viduals may adapt better to high-stress jobs and perform those jobs more effectively. Similarly, training can increase an individual’s self-efficacy and thus lessen job strain. We discussed goal-setting in Chapter 6. Individuals perform better when they have specific and challenging goals and receive feedback on their progress towards these goals. Goals can

IMPLICATIONS FOR MANAGERS   545

wellness programmes Organizationally supported programmes that focus on the employee’s total physical and mental condition.

reduce stress as well as provide motivation.107 Employees who are highly committed to their goals and see purpose in their jobs experience less stress, because they are more likely to perceive stressors as challenges rather than hindrances. Specific goals perceived as attainable clarify performance expectations. In addition, goal feedback reduces uncertainties about actual job performance. The result is less employee frustration, role ambiguity and stress. Redesigning jobs to give employees more responsibility, more meaningful work, more auto­ nomy and increased feedback can reduce stress because these factors give the employee greater control over work activities and lessen dependence on others. But as we noted in our discussion of work design, not all employees want enriched jobs. The right redesign, then, for employees with a low need for growth might be less responsibility and increased specialization. If individuals prefer structure and routine, reducing skill variety should also reduce uncertainties and stress levels. Role stress is detrimental to a large extent because employees feel uncertain about goals, expectations, how they’ll be evaluated and the like. By giving these employees a voice in the decisions that directly affect their job performance, management can increase employee control and reduce role stress. Thus, managers should consider increasing employee involvement in decision making because evidence clearly shows that increases in employee empower­ ment reduce psychological strain.108 Increasing formal organizational communication with employees reduces uncertainty by lessening role ambiguity and role conflict. Given the importance that perceptions play in moderating the stress–response relationship, management can also use effective communica­ tions as a means to shape employee perceptions. Remember that what employees categorize as demands, threats or opportunities are merely an interpretation, and that interpretation can be affected by the symbols and actions communicated by management. Our final suggestion is organizationally supported wellness programmes. These typically provide workshops to help people quit smoking, control alcohol use, lose weight, eat better and develop a regular exercise programme; they focus on the employee’s total physical and mental condition.109 Some help employees improve their psychological health as well. A meta-analysis of 36 programmes designed to reduce stress (including wellness programmes) showed that interventions to help employees reframe stressful situations and use active coping strategies appreciably reduced stress levels.110 Most wellness programmes assume employees need to take personal responsibility for their physical and mental health and that the organization is merely a means to that end.

SUMMARY The need for change has been implied throughout this text. For instance, think about atti­ tudes, motivation, work teams, communication, leadership, organizational structures, human resource practices and organizational cultures. Change was an integral part in our discussion of each. If environments were perfectly static, if employees’ skills and abilities were always up to date and incapable of deteriorating, and if tomorrow were always exactly the same as today, organizational change would have little or no relevance to managers. But the real world is turbulent, requiring organizations and their members to undergo dynamic change if they are to perform at competitive levels.

IMPLICATIONS FOR MANAGERS ●

●

Consider that, as a manager, you are a change agent in your organization. The decisions you make and your role modelling behaviours will help shape the organization’s change culture. Your management policies and practices will determine the degree to which the organiz­ ation learns and adapts to changing environmental factors.

546  18 Organizational change and stress ­m anagement ●

●

●

Some stress is good. Low to moderate amounts of stress enable many people to perform their jobs better by increasing their work intensity, alertness and ability to react. This is especially true if stress arises due to challenges on the job rather than hindrances that prevent employees from doing their jobs effectively. You can help alleviate harmful workplace stress for your employees by accurately matching workloads to employees, providing employees with stress-coping resources and responding to their concerns. You can identify extreme stress in your employees when performance declines, turnover increases, health-related absenteeism increases and engagement declines. However, by the time these symptoms are visible, it may be too late to be helpful, so stay alert for early indi­ cators and be proactive.

Managing change is an episodic activity

POINT/COUNTERPOINT

POINT Organizational change is an episodic activity. That is, it starts at some point, proceeds through a series of steps and culminates in some outcome that those involved hope is an improvement over the starting point. It has a beginning, a middle and an end. Lewin’s three-step model represents a classic illustration of this perspective. Change is seen as a break in the organ­ ization’s equilibrium. The status quo has been disturbed, and change is necessary to establish a new equilibrium state. The objective of refreezing is to stabilize the new situation by balancing the driving and restraining forces. Some experts have argued that organizational change should be thought of as balancing a system made up of five interacting variables within the organization – people, tasks, technology, structure and strategy. A change in any one variable has repercussions on one or more of the others. This perspective is episodic in that it treats organizational change

as essentially an effort to sustain equilibrium. A change in one variable begins a chain of events that, if properly managed, requires adjustments in the other variables to achieve a new state of equilibrium. Another way to conceptualize the episodic view of looking at change is to think of managing change as analogous to captaining a ship. The organization is like a large ship travelling across the calm Mediterranean Sea to a specific port. The ship’s captain has made this exact trip hundreds of times before with the same crew. Every once in a while, however, a storm will appear, and the crew has to respond. The captain will make the appropriate adjustments – that is, implement changes – and, having manoeuvred through the storm, will return the ship to calm waters. Like this ship’s voyage, managing an organization should be seen as a journey with a beginning and an end, and implementing change as a response to a break in the status quo and needed only occasionally.

COUNTERPOINT The episodic approach may be the dominant paradigm for handling organizational change, but it has become obsolete. It applies to a world of certainty and predictability. The episodic approach was developed in the 1950s and 1960s, and it reflects the environment of those times. It treats change as the occasional disturbance in an otherwise peaceful world. However, it bears little resemblance to today’s environment of constant and chaotic change.111 If you want to understand what it’s like to manage change in today’s organizations, think of it as equivalent to permanent white-water rafting.112 The organization is not a large ship, but more akin to a 40-foot raft. Rather than sailing a calm sea, this raft must traverse a raging river made up of an uninterrupted flow of permanent white-water rapids. To make things worse, the raft is manned by 10 people who have never worked

together or travelled the river before, much of the trip is in the dark, the river is dotted by unexpected turns and obstacles, the exact destination is not clear, and at irregular intervals the raft needs to pull to shore, where some new crew members are added and others leave. Change is a natural state and managing change is a continual process. That is, managers never get the luxury of escaping the white-water rapids. The stability and predictability characterized by the episodic perspective no longer captures the world we live in. Disruptions in the status quo are not occasional, temporary and followed by a return to an equilibrium state. There is, in fact, no equilibrium state. Managers today face constant change, bordering on chaos. They’re being forced to play a game they’ve never played before, governed by rules that are created as the game progresses.

EXPERIENTIAL EXERCISE   547

QUESTIONS FOR REVIEW 1. What is the difference between planned and unplanned

change?

4. How can managers create a culture for change? 5. What are the possible sources of stress?

2. What forces act as sources of resistance to change?

6. What are the consequences of stress?

3. What are the four main approaches to managing

7. What are the individual and organizational approaches

organizational change?

to managing stress?

EXPERIENTIAL EXERCISE STRATEGY AND CHANGE Objectives 1. To think through the obstacles organizations encounter

when they initiate change. 2. To consider solutions to increase the probability of

meeting the organization’s change goals.

Time Approximately 20 minutes.

The situation TutorMe is a midsize company that employs 45 former teachers as tutors in public and private schools, in the company’s branches and corporate headquarters, and at home via phone and internet. The firm employs a support staff of 15. TutorMe used to be the only such company in the area, but two new tutoring chains recently opened branches nearby. Online tutoring firms have added competition as well. TutorMe is beginning to struggle because it is no longer the only provider. Its organizational culture could best be described as ‘lackadaisical’ and its business practices as ‘loose’. Although it provides a meaningful service to students, many of its tutors use their own methods instead of following the TutorMe manuals. Tutor pay is low and benefits are near zero. But the tutors are skilled teachers who appreciate the oppor­ tunity to use their expertise in a flexible work situation, and turnover is low. TutorMe’s facilities look ‘tired’ and are poorly located. The corporate headquarters is a bit nicer and in a more visible location. But the managers often don’t know what the tutors are doing, and billing practices are chaotic. There is no HR department, so the business staff handles both payments and employee issues, mostly by creating further problems that upper management must settle. The pay for the business staff is mid-range for the area with standard benefits, but high staff turnover has been an accepted part of TutorMe’s business.

Upper management understands the company needs to change to survive, so its executives hired consultants to diagnose what TutorMe needs. The consultants believe the company should (1) eliminate some of its less-used branches, (2) relocate other branches to more visible locations, (3) train tutors with the TutorMe manuals and insist on standardization of teaching practices, (4) over­ haul the organizational culture to reflect a commitment to tutoring excellence, and (5) train and set expectations for the business staff to raise performance levels and tighten accountability. The consultants have warned TutorMe management that recent studies indicate only 30 to 43 per cent of organ­ izations achieve their goals for change initiatives. They have outlined the following specific obstacles and offered to help TutorMe be successful in its ­transformation: 1. Lack of adoption and commitment from top manage­

ment. 2. Employee resistance. 3. Manager resistance. 4. Insufficient communication. 5. Budget overages and project delays. 6. Employees and managers who ignore the new policies

and procedures.

The procedure Break into groups of three to four members. Each group will act as the consultants to guide TutorMe through the change process. Your group will need to come to a consensus, in writing, for each of the following ­assignments. 1. First, gather all you know about TutorMe’s current

business practices. Write down the reasons tutors stay while staff turnover is high. Decide what is currently working for TutorMe. What is not working and needed change even before competition came in?

548  18 Organizational change and stress ­m anagement

2. Based on what you determine about TutorMe’s busi­

4. From your list in question 3, write down your targeted,

ness practices, do you agree or disagree with each of the consultants’ five recommendations? Why or why not?

informed recommendations for overcoming the obsta­ cles. Also consider what further information would you like from the company.

3. Now consider the six obstacles the consultants have

identified, the five recommendations, and your answer to question 1. Which of the obstacles do you think will present problems for achieving the five recommenda­ tions? How? Make a list.

5. Bring the class together, and discuss your recommen­

dations from question 4.

ETHICAL DILEMMA IS USING MANIPULATION TO DRIVE CHANGE UNETHICAL? Manipulation, in the context of managing change, normally involves the very selective use of information and the conscious structuring of events. One common form of manipulation is co-optation. Co-opting an indi­ vidual usually involves giving him or her a desirable role in the design or implementation of the change. Co-opting a group involves giving one of its leaders, or someone it respects, a key role in the design or implementation of a change. This is not a form of participation, however, because the initiators do not want the advice of the co-opted, merely his or her endorsement.

on the diagnoses. But his presence at key meetings helped commit him to the diagnoses as well as the solutions the group designed. The commitment was subsequently very important because the president, at least initially, did not like some of the proposed changes. Nevertheless, after discussion with his human relations vice president, he did not try to block them.

For example:

2. Do you think this is justified given the fact that the

A division manager in a large multi-business corporation invited the corporate human relations vice president, a close friend of the president, to help him and his key staff diagnose some problems the division was having. Because of his busy schedule, the corporate vice president was not able to do much of the actual information gath­ ering or analysis himself, thus limiting his own influence

When companies fail to change The Trinitron TV, transistor radio, Walkman and VCR are the stuff of time capsules nowadays, but not long ago they were cutting-edge technology. Japan was at the pinnacle of the home consumer electronics industry from the 1970s to the 1990s, introducing new innovations to the world each year. Now those same Japanese firms are at the back of the pack and struggling to stay in the game. Japanese electronics production has fallen by more than 41 per cent, and Japan’s global market share of electronics goods and services has decreased by more than half since 2000. Sony, for example, hasn’t earned a profit since 2008. What happened? The simple answer is failure to innovate. While firms outside Japan pioneered digital technology and conquered the internet, Japanese firms stuck to semiconductors and hardware. But the deeper issue is the refusal of Japanese

Questions 1. Do you think the corporate human relations vice pres­

ident has been used by the division manager solely for his own benefit? change probably would have been blocked without the vice president’s involvement? 3. Would you deal with potential resistance to change by

using manipulation techniques such as co-opting? Why or why not? Source: J. Kotter and L. Schlesinger, ‘Choosing strategies for change’, Harvard Business Review, 57, 2 (1979), pp. 106–14.

CASE INCIDENT 1 managers to adapt to the changing global environment and to change their organizations accordingly. For instance, Sony mastered the technology needed for a digital music player years before Apple introduced the iPod in 2001, but its engineers resisted the change. Sony’s divisions would not cooperate with one another fast enough to compete in this market or in the new market for flat-screen TVs. Even now, Sony has not managed to change its organization to reflect current global thinking in the industry. For instance, they and other Japanese firms make a larger number of products than most of their global competitors. Former Sony executive Yoshiaki Sakito said, ‘Sony makes too many models, and for none of them can they say, “This contains our best, most cutting-edge technology.” Apple, on the other hand, makes one amazing phone in just two colours and says, “This is the one.”’

ENDNOTES   549

For Japanese electronics companies to survive, they must change. They were once able to structure their organizations around abundant, inexpensive labour to keep costs down and prices competitive, but that’s no longer the case. One complicating factor is that Japan is an ancient country of many traditions, with a low birth rate and an ageing population. The country’s culture will make it even more difficult to realign to globalization. It now must change to foster innovation, which may involve a cultural as much as an organiz­ ational transformation.

Questions 1. What made the Japanese electronics industry initially successful?

2. Why is the Japanese electronics industry no longer a succ­ ess story?

3. What types of organizational changes would you advise Japanese electronics managers to consider?

4. How do you think Japanese demographic trends have been a factor in the innovation problem?

Sources: H. Hiyama, ‘Sony break-up call shines light on electronics industry problems’, Japan Today, 7 June 2013, www.japantoday.com/category/opinions/ view/sony-break-up-call-shines-light-onelectronic-industry-problems; R. Katz, ‘How Japan blew its lead in electronics’, Wall Street Journal, 23 March 2012, p. A15; and H. Tabuchi, ‘How the parade passed Sony by’, New York Times, 15 April 2012, pp. B1, B7.

Preventing burnout and stress at Siemens, Belgium Siemens was granted the Belgian Employer of the Year 2014 partly in recognition of the ‘Life in Balance’ (LiB) programme. The company describes the programme below. Having recognized stress as being a significant issue, global evaluations and feedback from Siemens organizations in more than 70 countries led to the development of ‘Life in Balance’ (LiB) – a company-wide methodology based on five areas identified as essential to successful psychosocial risk and resource management: awareness, leadership involvement, communication, training and the Employee Assistance Programme (EAP). LiB, as an important part of the overall Health Manage­ ment programme Fit@Work, was implemented in Belgium from 2013 and the most appropriate measures for their specific risk factors were selected and were adjusted to fit local cultural and company conditions. Risk factors for burnout/stress and a high level of stigmatization of these issues were identified. To raise awareness of and destigmatize these issues, a video was created from the perspective of an affected manager who volunteered to share his experience. An instructional video was also created to enable other branches globally to take a similar approach and develop ‘educational’ videos. To improve involvement and awareness of leadership, stress management training for managers and two-day health seminars are run, targeted at managerial staff. Both initiatives promote health and highlight possibilities for support with regard to both prevention and rehabilitation.

CASE INCIDENT 2

Interested workers without personnel responsibility are also invited to attend and these workers contribute a valuable perspective. To improve communication, the Siemens Social Network was set up in 2013. In Belgium, the Fit@Work group was set up within this network and is now an active community of employees, health experts and voluntary members discussing stress and psychosocial issues, among other health topics. Worries about job security in Siemens Belgium have been addressed through the Employability Index. This is a tool via which individual development plans are created and long-term learning areas are proposed. Suitable paths are revealed for every employee. Finally, about 66 per cent of Siemens employees worldwide have access to the EAP.

Questions 1. List the initiatives Siemens has employed to combat stress. 2. Evaluate these initiatives according to what you have learned in this chapter.

3. Do you believe the initiatives will be effective in combating stress?

4. Are there any recommendations you can give to improve the programme? Source: ‘Healthy Workplaces Good Practice Awards 2014–2015’, European Agency for Health and Safety at Work, see www.healthy-workplaces.eu.

ENDNOTES  1 See, for instance, J. Birkinshaw, G. Hamel and M. J. Mol, ‘Management innovation’, Academy of Management Review, 33, 4 (2008), pp. 825–45; and J. Welch and S. Welch, ‘What change agents are made of’, BusinessWeek, 20 October 2008, p. 96.

  2 C. J. Loomis and D. Burke, ‘Can Ellen Kullman make DuPont great again?’, Fortune, 3 May 2010), pp. 156–63.  3 R. J. Grossman, ‘Accelerating change at GM’, HR Magazine, June 2012, pp. 58–64.

550  18 Organizational change and stress ­m anagement   4 P. G. Audia and S. Brion, ‘Reluctant to change: self-enhancing responses to diverging performance measures’, Organizational Behavior and Human Decision Processes, 102 (2007), pp. 255–69.   5 M. Fugate, A. J. Kinicki and G. E. Prussia, ‘Employee coping with organizational change: an examination of alternative the­ oretical perspectives and models’, Personnel Psychology, 61, 1 (2008), pp. 1–36.   6 J. D. Ford, L. W. Ford and A. D’Amelio, ‘Resistance to change: the rest of the story’, Academy of Management Review, 33, 2 (2008), pp. 362–77.   7 M. T. Hannan, L. Pólos and G. R. Carroll, ‘The fog of change: opacity and asperity in organizations’, Administrative Science Quarterly, September 2003, pp. 399–432.  8 J. P. Kotter and L. A. Schlesinger, ‘Choosing strategies for change’, Harvard Business Review, March–April 1979, pp. 106–14; and R. K. Smollan, ‘The multi-dimensional nature of resistance to change’, Journal of Management & Organization, November 2011, pp. 828–49.   9 J. E. Dutton, S. J. Ashford, R. M. O’Neill and K. A. Lawrence, ‘Moves that matter: issue selling and organizational change’, Academy of Management Journal, August 2001, pp. 716–36. 10 P. C. Fiss and E. J. Zajac, ‘The symbolic management of strategic change: sensegiving via framing and decoupling’, Academy of Management Journal, 49, 6 (2006), pp. 1173–93. 11 A. E. Rafferty and S. L. D. Restubog, ‘The impact of change process and context on change reactions and turnover during a merger’, Journal of Management, 36, 5 (2010), pp. 1309–338. 12 Q. N. Huy, ‘Emotional balancing of organizational continu­ ity and radical change: the contribution of middle managers’, Administrative Science Quarterly, March 2002, pp. 31–69; D. M. Herold, D. B. Fedor and S. D. Caldwell, ‘Beyond change management: a multilevel investigation of contextual and per­ sonal influences on employees’ commitment to change’, Journal of Applied Psychology, 92, 4 (2007), pp. 942–51; and G. B. Cunningham, ‘The relationships among commitment to change, coping with change, and turnover intentions’, European Journal of Work and Organizational Psychology, 15, 1 (2006), pp. 29–45. 13 R. Peccei, A. Giangreco and A. Sebastiano, ‘The role of organ­ izational commitment in the analysis of resistance to change: co-predictor and moderator effects’, Personnel Review, 40, 2 (2011), pp. 185–204. 14 J. P. Kotter, ‘Leading change: why transformational efforts fail’, Harvard Business Review, 85 (January 2007), p. 96–103. 15 K. van Dam, S. Oreg and B. Schyns, ‘Daily work contexts and resistance to organisational change: the role of leader-member exchange, development climate, and change process characteris­ tics’, Applied Psychology: An International Review, 57, 2 (2008), pp. 313–34. 16 S. Oreg and N. Sverdlik, ‘Ambivalence toward imposed change: the conflict between dispositional resistance to change and the orientation toward the change agent’, Journal of Applied Psychology, 96, 2 (2011), pp. 337–49. 17 D. B. Fedor, S. Caldwell and D. M. Herold, ‘The effects of organ­ izational changes on employee commitment: a multilevel inves­ tigation’, Personnel Psychology, 59 (2006), pp. 1–29; and R. D. Foster, ‘Resistance, justice, and commitment to change’, Human Resource Development Quarterly, 21, 1 (2010), pp. 3–39.

20 J. W. B. Lang and P. D. Bliese, ‘General mental ability and two types of adaptation to unforeseen change: applying discontin­ uous growth models to the task-change paradigm’, Journal of Applied Psychology, 94, 2 (2009), pp. 411–28. 21 C. O. L. H. Porter, J. W. Webb and C. I. Gogus, ‘When goal ori­ entations collide: effects of learning and performance orienta­ tion on team adaptability in response to workload imbalance’, Journal of Applied Psychology, 95, 5 (2010), pp. 935–43. 22 Adapted from: Laura Chamberlain, ‘Eight key skills for effec­ tive change management for line managers’, Personnel Today, 8 Sep 2010, available at http://www.personneltoday.com/hr/ eight-key-skills-for-effective-change-management-for-linemanagers/. 23 See, for instance, A. Karaevli, ‘Performance consequences for new CEO “outsiderness”: moderating effects of pre- and post-succession contexts’, Strategic Management Journal, 28, 7 (2007), pp. 681–706. 24 K. Lewin, Field Theory in Social Science (New York: Harper & Row, 1951). 25 P. G. Audia, E. A. Locke and K. G. Smith, ‘The paradox of success: an archival and a laboratory study of strategic persis­ tence following radical environmental change’, Academy of Management Journal, October 2000, pp. 837–53. 26 J. B. Sorensen, ‘The strength of corporate culture and the reli­ ability of firm performance’, Administrative Science Quarterly, March 2002, pp. 70–91. 27 J. Amis, T. Slack and C. R. Hinings, ‘The pace, sequence, and linearity of radical change’, Academy of Management Journal, February 2004, pp. 15–39; and E. Autio, H. J. Sapienza and J. G. Almeida, ‘Effects of age at entry, knowledge intensity, and imitability on international growth’, Academy of Management Journal, October 2000, pp. 909–24. 28 J. P. Kotter, ‘Leading changes: why transformation efforts fail’, Harvard Business Review, March–April 1995, pp. 59–67; and J. P. Kotter, Leading Change (Boston, MA: Harvard Business School Press, 1996). 29 J. P. Kotter, Leading Change, (Boston, MA: Harvard Business School Press, 1996). 30 See, for example, C. Eden and C. Huxham, ‘Action research for the study of organizations’, in S. R. Clegg, C. Hardy and W. R. Nord (eds), Handbook of Organization Studies (London: Sage, 1996); and L. S. Lüscher and M. W. Lewis, ‘Organizational change and managerial sensemaking: working through paradox’, Academy of Management Journal, 51, 2 (2008), pp. 221–40. 31 For a sampling of various OD definitions, see H. K. Sinangil and F. Avallone, ‘Organizational Development and Change’, in N. Anderson, D. S. Ones, H. K. Sinangil and C. Viswesvaran (eds), Handbook of Industrial, Work and Organizational Psychology, vol. 2 (Thousand Oaks, CA: Sage, 2001), pp. 332–335; and R. J. Marshak and D. Grant, ‘Organizational Discourse and New Organization Development Practices’, British Journal of Management, 19, 1 (2008), pp. S7–S19. 32 See, for instance, R. Lines, ‘Influence of Participation in Strategic Change: Resistance, Organizational Commitment and Change Goal Achievement’, Journal of Change Management, September 2004, pp. 193–215.

18 S. Oreg, ‘Personality, context, and resistance to organiz­ ational change’, European Journal of Work and Organizational Psychology, 15, 1 (2006), pp. 73–101.

33 S. Highhouse, ‘A History of the T-Group and Its Early Application in Management Development’, Group Dynamics: Theory, Research, & Practice, December 2002, pp. 277–290.

19 S. M. Elias, ‘Employee commitment in times of change: assess­ ing the importance of attitudes toward organizational change’, Journal of Management, 35, 1 (2009), pp. 37–55.

34 J. E. Edwards and M. D. Thomas, ‘The organizational survey pro­ cess: general steps and practical considerations’, in P. Rosenfeld, J. E. Edwards and M. D. Thomas (eds), Improving Organizational

ENDNOTES   551 Surveys: New Directions, Methods, and Applications (Newbury Park, CA: Sage, 1993), pp. 3–28. 35 E. H. Schein, Process Consultation: Its Role in Organizational Development, 2nd edn (Reading, MA: Addison-Wesley, 1988), p. 9. See also E. H. Schein, Process Consultation Revisited: Building Helpful Relationships (Reading, MA: Addison-Wesley, 1999). 36 Schein, Process Consultation.

June 2013, pp. 103–17; and S. Shane, S. Venkataraman and I. MacMillan, ‘Cultural differences in innovation championing strategies’, Journal of Management, 21, 5 (1995), pp. 931–52. 50 See, for example, T. B. Lawrence, M. K. Mauws, B. Dyck and R. F. Kleysen, ‘The politics of organizational learning: integrating power into the 4I framework’, Academy of Management Review, January 2005, pp. 180–91.

37 W. W. G. Dyer, W. G. Dyer and J. H. Dyer, Team Building: Proven Strategies for Improving Team Performance (Hoboken, NJ: Jossey-Bass, 2007).

51 ‘Employment in Europe 2007’, European Commission.

38 U. Wagner, L. Tropp, G. Finchilescu and C. Tredoux (eds), Improving Intergroup Relations (New York: Wiley-Blackwell, 2008).

53 C. Argyris and D. A. Schon, Organizational Learning (Reading, MA: Addison-Wesley, 1978).

39 See, for example, R. Fry, F. Barrett, J. Seiling and D. Whitney (eds), Appreciative Inquiry & Organizational Transformation: Reports from the Field (Westport, CT: Quorum, 2002); J. K. Barge and C. Oliver, ‘Working with appreciation in managerial practice’, Academy of Management Review, January 2003, pp. 124–42; and D. van der Haar and D. M. Hosking, ‘Evaluating appreciative inquiry: a relational constructionist perspective’, Human Relations, August 2004, pp. 1017–36. 40 J. Gordon, ‘Meet the freight fairy’, Forbes, 20 January 2003, p. 65. 41 A. Harrington, ‘Who’s afraid of a new product?’, Fortune, 10 November 2003, pp. 189–192; and C. C. Manz, F. Shipper and G. L. Stewart, ‘Everyone a team leader: shared influence at W. L. Gore and Associates’, Organizational Dynamics, 38, 3 (2009), pp. 239–44. 42 See Great Place to Work Institute Europe http://www.greatplace­ towork-europe.com 43 See, for instance, R. M. Kanter, ‘When a thousand flowers bloom: structural, collective and social conditions for innova­ tion in organizations’, in B. M. Staw and L. L. Cummings (eds), Research in Organizational Behavior, vol. 10 (Greenwich, CT: JAI Press, 1988), pp. 169–211. 44 F. Damanpour, ‘Organizational innovation: a meta-­ analysis of effects of determinants and moderators’, Academy of Management Journal, September 1991, p. 557; and H. W. Volberda, F. A. J. Van den Bosch and C. V. Heij, ‘Management innovation: management as fertile ground for innovation’, European Management Review, Spring 2013, pp. 1–15. 45 Damanpour, ‘Organizational innovation’, pp. 555–90; and G. Westerman, F. W. McFarlan and M. Iansiti, ‘Organization design and effectiveness over the innovation life cycle’, Organization Science, 17, 2 (2006), pp. 230–8. 46 See P. R. Monge, M. D. Cozzens and N. S. Contractor, ‘Communication and motivational predictors of the dynamics of organizational innovation’, Organization Science, May 1992, pp. 250–274; P. Schepers and P. T. van den Berg, ‘Social fac­ tors of work-environment creativity’, Journal of Business and Psychology, 21, 3 (2007), pp. 407–28. 47 D. L. Day, ‘Raising radicals: different processes for championing innovative corporate ventures’, Organization Science, May 1994, pp. 148–72; and M. E. Mullins, S. W. J. Kozlowski, N. Schmitt and A. W. Howell, ‘The role of the idea champion in innovation: the case of the internet in the mid-1990s’, Computers in Human Behavior, 24, 2 (2008), pp. 451–67. 48 J. M. Howell and C. A. Higgins, ‘Champions of change: iden­ tifying, understanding, and supporting champions of techno­ logical innovations’, Organizational Dynamics, 19 (1990), pp. 40–55; and S. C. Parker, ‘Intrapreneurship or entrepreneurship?’, Journal of Business Venturing, January 2011, pp. 19–34. 49 M. Cerne, M. Jaklic and M. Skerlavaj, ‘Decoupling manage­ ment and technological innovations: resolving the individualism-­ collectivism controversy’, Journal of International Management,

52 D. H. Kim, ‘The link between individual and organizational learning’, Sloan Management Review, Autumn 1993, p. 37.

54 Based on P. M. Senge, The Fifth Discipline (New York: Doubleday, 1990). 55 L. Berghman, P. Matthyssens, S. Streukens and K. Vandenbempt, ‘Deliberate learning mechanisms for stimulating strategic innova­ tion capacity’, Long Range Planning (February–April 2013), pp. 39–71; and B. Dumaine, ‘Mr. Learning Organization’, Fortune, 17 October 1994, p. 148. 56 F. Kofman and P. M. Senge, ‘Communities of commitment: the heart of learning organizations’, Organizational Dynamics, Autumn 1993, pp. 5–23. 57 Dumaine, ‘Mr. Learning Organization’, p. 153. 58 D. Meinert, ‘Wings of change’, HR Magazine, November 2012, pp. 30–6. 59 M.-G. Seo, M. S. Taylor, N. S. Hill, X. Zhang, P. E. Tesluk and N. M. Lorinkova, ‘The role of affect and leadership during organ­ izational change’, Personnel Psychology, 65 (2012), pp. 121–65. 60 M. Fugate, G. E. Prussia and A. J. Kinicki, ‘Managing employee withdrawal during organizational change: the role of threat appraisal’, Journal of Management, May 2012, pp. 890–914. 61 J. Shin, M. S. Taylor and M.-G. Seo, ‘Resources for change: the relationships of organizational inducements and psychological resilience to employees’ attitudes and behaviors toward organ­ izational change’, Academy of Management Journal, 55 (2012), pp. 727–48. 62 See, for instance, S. Armour, ‘Rising job stress could affect bot­ tom line’, USA Today, 29 July 2003, p. 1B; and J. Schramm, ‘Work/life on hold’, HR Magazine, 53, October 2008, p. 120. 63 Adapted from R. S. Schuler, ‘Definition and conceptualization of stress in organizations’, Organizational Behavior and Human Performance, April 1980, p. 189. For an updated review of definitions, see C. L. Cooper, P. J. Dewe and M. P. O’Driscoll, Organizational Stress: A Review and Critique of Theory, Research, and Applications (Thousand Oaks, CA: Sage, 2002). 64 See, for instance, M. A. Cavanaugh, W. R. Boswell, M. V. Roehling and J. W. Boudreau, ‘An empirical examination of self-reported work stress among U.S. managers’, Journal of Applied Psychology, February 2000, pp. 65–74. 65 N. P. Podsakoff, J. A. LePine and M. A. LePine, ‘Differential challenge-hindrance stressor relationships with job attitudes, turnover intentions, turnover, and withdrawal behavior: a meta-analysis’, Journal of Applied Psychology, 92, 2 (2007), pp. 438–54; J. A. LePine, M. A. LePine and C. L. Jackson, ‘Challenge and hindrance stress: relationships with exhaustion, motiva­ tion to learn, and learning performance’, Journal of Applied Psychology, October 2004, pp. 883–91. 66 L. W. Hunter and S. M. B. Thatcher, ‘Feeling the heat: effects of stress, commitment, and job experience on job performance’, Academy of Management Journal, 50, 4 (2007), pp. 953–68. 67 J. C. Wallace, B. D. Edwards, T. Arnold, M. L. Frazier and D. M. Finch, ‘Work stressors, role-based performance, and the

552  18 Organizational change and stress ­m anagement moderating influence of organizational support’, Journal of Applied Psychology, 94, 1 (2009), pp. 254–62. 68 N. W. Van Yperen and O. Janssen, ‘Fatigued and dissatisfied or fatigued but satisfied? Goal orientations and responses to high job demands’, Academy of Management Journal, December 2002, pp. 1161–71; and N. W. Van Yperen and M. Hagedoorn, ‘Do high job demands increase intrinsic motivation or fatigue or both? The role of job control and job social support’, Academy of Management Journal, June 2003, pp. 339–48. 69 J. de Jonge and C. Dormann, ‘Stressors, resources, and strain at work: a longitudinal test of the triple-match principle’, Journal of Applied Psychology, 91, 5 (2006), pp. 1359–74. 70 This section is adapted from C. L. Cooper and R. Payne, Stress at Work (London: Wiley, 1978); Parasuraman and Alutto, ‘Sources and outcomes of stress in organizational settings’, pp. 330–50; and P. M. Hart and C. L. Cooper, ‘Occupational stress: toward a more integrated framework’, in N. Anderson, D. S. Ones, H. K. Sinangil and C. Viswesvaran (eds), Handbook of Industrial, Work and Organizational Psychology, vol. 2 (London: Sage, 2002), pp. 93–114. 71 A. E. Rafferty and M. A. Griffin, ‘Perceptions of organizational change: a stress and coping perspective’, Journal of Applied Psychology, 71, 5 (2007), pp. 1154–62. 72 See, for example, M. L. Fox, D. J. Dwyer and D. C. Ganster, ‘Effects of stressful job demands and control of physiological and attitudinal outcomes in a hospital setting’, Academy of Management Journal, April 1993, pp. 289–318; and R. Ilies, N. Dimotakis and I. E. De Pater, ‘Psychological and physiolog­ ical reactions to high workloads: implications for well-being’, Personnel Psychology, Summer 2010, pp. 407–36. 73 T. L. Smith-Jackson and K. W. Klein, ‘Open-plan offices: task performance and mental workload’, Journal of Environmental Psychology, 29, 2 (2009), pp. 279–89. 74 T. M. Glomb, J. D. Kammeyer-Mueller and M. Rotundo, ‘Emotional labor demands and compensating wage differentials’, Journal of Applied Psychology, August 2004, pp. 700–14; A. A. Grandey, ‘When “The show must go on”: surface acting and deep acting as determinants of emotional exhaustion and peer-rated service delivery’, Academy of Management Journal, February 2003, pp. 86–96. 75 S. Lim, L. M. Cortina and V. J. Magley, ‘Personal and workgroup incivility: impact on work and health outcomes’, Journal of Applied Psychology, 93, 1 (2008), pp. 95–107; N. T. Buchanan and L. F. Fitzgerald, ‘Effects of racial and sexual harassment on work and the psychological well-being of African American women’, Journal of Occupational Health Psychology, 13, 2 (2008), pp. 137–51; C. R. Willness, P. Steel and K. Lee, ‘A meta-analysis of the antecedents and consequences of workplace sexual harass­ ment’, Personnel Psychology, 60, 1 (2007), pp. 127–62; and B. Moreno-Jiménez, A. Rodríguez-Muñoz, J. C. Pastor, A. I. SanzVergel and E. Garrosa, ‘The moderating effects of psychologi­ cal detachment and thoughts of revenge in workplace bullying’, Personality and Individual Differences, 46, 3 (2009), pp. 359–64. 76 V. S. Major, K. J. Klein and M. G. Ehrhart, ‘Work time, work interference with family, and psychological distress’, Journal of Applied Psychology, June 2002, pp. 427–36; see also P. E. Spector, C. L. Cooper, S. Poelmans, T. D. Allen, M. O’Driscoll, J. I. Sanchez, O. L. Siu, P. Dewe, P. Hart, L. Lu, L. F. R. De Moreas, G. M. Ostrognay, K. Sparks, P. Wong and S. Yu, ‘A cross-national comparative study of work-family stressors, working hours, and well-being: China and Latin America versus the Anglo world’, Personnel Psychology, Spring 2004, pp. 119–42. 77 D. L. Nelson and C. Sutton, ‘Chronic work stress and coping: a longitudinal study and suggested new directions’, Academy of Management Journal, December 1990, pp. 859–69.

78 J. B. Avey, F. Luthans and S. M. Jensen, ‘Psychological capital: a pos­ itive resource for combating employee stress and turnover’, Human Resource Management, September–October 2009, pp. 677–93. 79 H. Selye, The Stress of Life, rev. edn (New York: McGrawHill, 1976); and Q. Hu, W. B. Schaufeli and T. W. Taris, ‘The job demands–resources model: an analysis of additive and joint effects of demands and resources’, Journal of Vocational Behavior, 79, 1 (2011), pp. 181–90. 80 S. J. Motowidlo, J. S. Packard and M. R. Manning, ‘Occupational stress: its causes and consequences for job performance’, Journal of Applied Psychology, November 1987, pp. 619–20; and E. R. Crawford, J. A. LePine and B. L. Rich, ‘Linking job demands and resources to employee engagement and burnout: a theo­ retical extension and meta-analytic test’, Journal of Applied Psychology, 95, 5 (2010), pp. 834–48. 81 See J. B. Halbesleben, ‘Sources of social support and burnout: a meta-analytic test of the conservation of resources model’, Journal of Applied Psychology, 91, 5 (2006), pp. 1134–45; N. Bolger and D. Amarel, ‘Effects of social support visibility on adjustment to stress: experimental evidence’, Journal of Applied Psychology, 92, 3 (2007), pp. 458–75; and C. Fernet, M. Gagné and S. Austin, ‘When does quality of relationships with coworkers pre­ dict burnout over time? The moderating role of work motivation’, Journal of Organizational Behavior, 31 (2010), pp. 1163–180. 82 See, for example, C. M. Middeldorp, D. C. Cath, A. L. Beem, G. Willemsen and D. I. Boomsma, ‘Life events, anxious depression, and personality: a prospective and genetic study’, Psychological Medicine, 38, 11 (2008), pp. 1557–65; A. A. Uliaszek, R. E. Zinbarg, S. Mineka, M. G. Craske, J. M. Sutton, J. W. Griffith, R. Rose, A. Waters and C. Hammen, ‘The role of neuroticism and extraversion in the stress-anxiety and stress-depression rela­ tionships’, Anxiety, Stress, and Coping, 23, 4 (2010), pp. 363–81. 83 J. D. Kammeyer-Mueller, T. A. Judge and B. A. Scott, ‘The role of core self-evaluations in the coping process’, Journal of Applied Psychology, 94, 1 (2009), pp. 177–95. 84 R. J. Burke, A. M. Richardson and M. Mortinussen, ‘Workaholism among Norwegian managers: work and well-­being outcomes’, Journal of Organizational Change Management, 7 (2004), pp. 459–70; and W. B. Schaufeli, T. W. Taris and W. van Rhenen, ‘Workaholism, burnout, and work engagement: three of a kind or three different kinds of employee well-being’, Applied Psychology: An International Review, 57, 2 (2008), pp. 173–203. 85 J. Chen, C. Silverthorne and J. Hung, ‘Organization commu­ nication, job stress, organizational commitment, and job per­ formance of accounting professionals in Taiwan and America’, Leadership & Organization Development Journal, 27, 4 (2006), pp. 242–9; and C. Liu, P. E. Spector and L. Shi, ‘Cross-national job stress: a quantitative and qualitative study’, Journal of Organizational Behavior, February 2007, pp. 209–39. 86 P. E. Spector, T. D. Allen, S. A. Y. Poelmans, L. M. Lapierre, C. L. Cooper, M. O’Driscoll, et al., ‘Cross national differences in relationships of work demands, job satisfaction, and turnover intention with work-family conflict’, Personnel Psychology, 60, 4 (2007), pp. 805–35. 87 H. M. Addae and X. Wang, ‘Stress at work: linear and curvilinear effects of psychological-, job-, and organization-related factors: an exploratory study of Trinidad and Tobago’, International Journal of Stress Management, November 2006, pp. 476–93. 88 J. Schaubroeck, J. R. Jones and J. L. Xie, ‘Individual differences in utilizing control to cope with job demands: effects on suscepti­ bility to infectious disease’, Journal of Applied Psychology, April 2001, pp. 265–78. 89 M. Kivimäki, J. Head, J. E. Ferrie, E. Brunner, M. G. Marmot, J. Vahtera and M. J. Shipley, ‘Why is evidence on job strain and

ENDNOTES   553 coronary heart disease mixed? An illustration of measurement challenges in the Whitehall II Study’, Psychosomatic Medicine, 68, 3 (2006), pp. 398–401.

Richardson and H. R. Rothstein, ‘Effects of occupational stress management intervention programs: a meta-analysis’, Journal of Occupational Health Psychology, 13, 1 (2008), pp. 69–93.

90 M. Borritz, K. B. Christensen, U. Bültmann, R. Rugulies, T. Lund, I Andersen, E. Villadsen, F. Didreichsen and T. S. Krisensen, ‘Impact on burnout and psychosocial work characteristics on future longterm sickness absence, prospective results of the Danish PUMA study among human service workers’, Journal of Occupational and Environmental Medicine, 52, 10 (2010), pp. 964–70.

101 T. H. Macan, ‘Time management: test of a process model’, Journal of Applied Psychology, June 1994, pp. 381–91; and B. J. C. Claessens, W. Van Eerde, C. G. Rutte and R. A. Roe, ‘Planning behavior and perceived control of time at work’, Journal of Organizational Behavior, December 2004, pp. 937–50.



91 R. Ilies, N. Dimotakis and I. E. DePater, ‘Psychological and physiological reactions to high workloads: implications for well-being’, Personnel Psychology, 63, 2 (2010), pp. 407–63. 92 D. Örtqvist and J. Wincent, ‘Prominent consequences of role stress: a meta-analytic review’, International Journal of Stress Management, 13, 4 (2006), pp. 399–422. 93 J. R. Hackman and G. R. Oldham, ‘Development of the job diag­ nostic survey’, Journal of Applied Psychology, April 1975, pp. 159–70; J. J. Hakanen, A. B. Bakker and M. Jokisaari, ‘A 35-year follow-up study on burnout among Finnish employees’, Journal of Occupational Health Psychology, 16, 3 (2011), pp. 345–60; Crawford, LePine and Rich, ‘Linking job demands and resources to employee engagement and burnout’; and G. A. Chung-Yan, ‘The nonlinear effects of job complexity and autonomy on job satisfaction, turnover, and psychological well-being’, Journal of Occupational Health Psychology, 15, 3 (2010), pp. 237–51. 94 L. L. Meier, N. K. Semmer, A. Elfering and N. Jacobshagen, ‘The double meaning of control: three-way interactions between internal resources, job control, and stressors at work’, Journal of Occupational Health Psychology, 13, 3 (2008), pp. 244–58. 95 E. M. de Croon, J. K. Sluiter, R. W. B. Blonk, J. P. J. Broersen and M. H. W. Frings-Dresen, ‘Stressful work, psychological job strain, and turnover: a 2-year prospective cohort study of truck drivers’, Journal of Applied Psychology, June 2004, pp. 442–54; R. Cropanzano, D. E. Rupp and Z. S. Byrne, ‘The relationship of emo­ tional exhaustion to work attitudes, job performance, and organ­ izational citizenship behaviors’, Journal of Applied Psychology, February 2003, pp. 160–9; and S. Diestel and K. Schmidt, ‘Costs of simultaneous coping with emotional dissonance and self-control demands at work: results from two German samples’, Journal of Applied Psychology, 96, 3 (2011), pp. 643–53. 96 See, for instance, S. Zivnuska, C. Kiewitz, W. A. Hochwarter, P. L. Perrewe and K. L. Zellars, ‘What is too much or too little? The curvilinear effects of job tension on turnover intent, value attainment, and job satisfaction’, Journal of Applied Social Psychology, July 2002, pp. 1344–60. 97 L. A. Muse, S. G. Harris and H. S. Field, ‘Has the inverted-U theory of stress and job performance had a fair test?’, Human Performance, 16, 4 (2003), pp. 349–64. 98 S. Gilboa, A. Shirom, Y. Fried and C. L. Cooper, ‘A meta-analysis of work demand stressors and job performance: examining main and moderating effects’, Personnel Psychology, 61, 2 (2008), pp. 227–71. 99 J. C. Wallace, B. D. Edwards, T. Arnold, M. L. Frazier and D. M. Finch, ‘Work stressors, role-based performance, and the moder­ ating influence of organizational support’, Journal of Applied Psychology, 94, 1 (2009), pp. 254–62. 100 The following discussion has been influenced J. M. Ivancevich, M. T. Matteson, S. M. Freedman and J. S. Phillips, ‘Worksite stress management interventions’, American Psychologist, February 1990, pp. 252–61; R. Schwarzer, ‘Manage stress at work through preventive and proactive coping’, in E. A. Locke (ed.), Handbook of Principles of Organizational Behavior (Malden, MA: Blackwell, 2004), pp. 342–55; and K. M.

102  See, for example, G. Lawrence-Ell, The Invisible Clock: A Practical Revolution in Finding Time for Everyone and Everything (Seaside Park, NJ: Kingsland Hall, 2002); and B. Tracy, Time Power (New York: AMACOM, 2004). 103 R. W. Renn, D. G. Allen and T. M. Huning, ‘Empirical exami­ nation of individual-level personality-based theory of self-man­ agement failure’, Journal of Organizational Behavior, 32, 1 (2011), pp. 25–43; and P. Gröpel and P. Steel, ‘A mega-trial inves­ tigation of goal setting, interest enhancement, and energy on procrastination’, Personality and Individual Differences, 45, 5 (2008), pp. 406–11. 104 P. Salmon, ‘Effects of physical exercise on anxiety, depression, and sensitivity to stress: a unifying theory’, Clinical Psychology Review, 21, 1 (2001), pp. 33–61. 105 K. M. Richardson and H. R. Rothstein, ‘Effects of occupational stress management intervention programs: a meta-analysis’, Journal of Occupational Health Psychology, 13, 1 (2008), pp. 69–93. 106  V. C. Hahn, C. Binnewies, S. Sonnentag and E. J. Mojza, ‘Learning how to recover from job stress: effects of a recovery training program on recovery, recovery-related self-efficacy, and well-being’, Journal of Occupational Health Psychology, 16, 2 (2011), pp. 202–16; and C. Binnewies, S. Sonnentag and E. J. Mojza, ‘Recovery during the weekend and fluctuations in weekly job performance: a week-level study examining intra-individual relationships’, Journal of Occupational and Organizational Psychology, 83, 2 (2010), pp. 419–41. 107 E. R. Greenglass and L. Fiksenbaum, ‘Proactive coping, posi­ tive affect, and well-being: testing for mediation using path analysis’, European Psychologist, 14, 1 (2009), pp. 29–39; and P. Miquelon and R. J. Vallerand, ‘Goal motives, well-being, and physical health: happiness and self-realization as psychologi­ cal resources under challenge’, Motivation and Emotion, 30, 4 (2006), pp. 259–72. 108 M. M. Butts, R. J. Vandenberg, D. M. DeJoy, B. S. Schaffer and M. G. Wilson, ‘Individual reactions to high involvement work processes: investigating the role of empowerment and perceived organizational support’, Journal of Occupational Health Psychology, 14, 2 (2009), pp. 122–36. 109 L. Blue, ‘Making good health easy’, Time, 12 November 2009; and M. Andrews, ‘Americas best health plans’, US News and World Report, 5 November 2007, pp. 54–60. 110 K. M. Richardson and H. R. Rothstein, ‘Effects of occupational stress management intervention programs: a meta-analysis’, Journal of Occupational Health Psychology, 13, 1 (2008), pp. 69–93. 111 For contrasting views on episodic and continuous change, see K. E. Weick and R. E. Quinn, ‘Organizational change and develop­ ment’, in J. T. Spence, J. M. Darley and D. J. Foss (eds), Annual Review of Psychology, vol. 50 (Palo Alto, CA: Annual Reviews, 1999), pp. 361–86. 112 This perspective is based on P. B. Vaill, Managing as a Performing Art: New Ideas for a World of Chaotic Change (San Francisco, CA: Jossey-Bass, 1989).

Glossary Ability An individual’s capacity to perform the various tasks in a job. Accommodating The willingness of one party in a conflict

to place the opponent’s interests above his or her own.

Attribution theory of leadership A leadership theory that says that leadership is merely an attribution that people make about other individuals.

Action research A change process based on systematic collection of data and then selection of a change action based on what the analysed data indicate.

Authentic leaders Leaders who know who they are, know what they believe in and value, and act on those values and beliefs openly and candidly. Their followers would consider them to be ethical people.

Adjourning stage The final stage in group development

Authority The rights inherent in a managerial position to

for temporary groups, characterized by concern with wrapping up activities rather than task performance. Affect A broad range of feelings that people experience. Affect intensity Individual differences in the strength

with which individuals experience their emotions. Affective commitment An emotional attachment to an organization and a belief in its values. Affective component The emotional or feeling segment

of an attitude. Affective events theory (AET) A model that suggests that

workplace events cause emotional reactions on the part of employees, which then influence workplace attitudes and behaviours.

give orders and to expect the orders to be obeyed. Automatic processing A relatively superficial consideration of evidence and information making use of heuristics. Autonomy The degree to which a job provides substantial freedom and discretion to the individual in scheduling the work and in determining the procedures to be used in carrying it out. Availability bias The tendency for people to base their judgements on information that is readily available to them. Avoiding The desire to withdraw from or suppress a

conflict.

Agreeableness A personality dimension that describes

BATNA The best alternative to a negotiated agreement;

someone who is good natured, cooperative and trusting.

the least the individual should accept.

Anchoring bias A tendency to fixate on initial information, from which one then fails to adequately adjust for subsequent information.

Behavioural component An intention to behave in a certain way towards someone or something.

Anthropology The study of societies to learn about

when confronted with ethical dilemmas.

human beings and their activities. Appreciative inquiry (AI) An approach that seeks to

identify the unique qualities and special strengths of an organization, which can then be built on to improve performance. Arbitrator A third party to a negotiation who has the

authority to dictate an agreement. Assessment centres A set of performance-simulation

tests designed to evaluate a candidate’s managerial potential. Attitudes Evaluations employees make about objects,

people or events. Attribution theory An attempt to determine whether an

individual’s behaviour is internally or externally caused.

Behavioural ethics Analysing how people actually behave Behavioural theories of leadership Theories propos-

ing that specific behaviours differentiate leaders from nonleaders. Behaviourally anchored rating scales (BARS) Scales that

combine major elements from the critical incident and graphic rating scale approaches. The appraiser rates the employees based on items along a continuum, but the points are examples of actual behaviour on the given job rather than general descriptions or traits. Big Five model A personality assessment model that taps five basic dimensions. Biographical characteristics Personal characteristics such as age, gender, race and length of tenure that are objective and easily obtained from personnel records.

glossary   555

These characteristics are representative of surface-level diversity. Bonus A pay plan that rewards employees for recent performance rather than historical performance. Boundaryless organization An organization that seeks

Cognitive evaluation theory A version of self-determination theory which holds that allocating extrinsic rewards for behaviour that had been previously intrinsically rewarding tends to decrease the overall level of motivation if the rewards are seen as controlling.

to eliminate the chain of command, have limitless spans of control and replace departments with empowered teams.

Cohesiveness The degree to which group members are

Bounded rationality A process of making decisions by

Collaborating A situation in which the parties to a con-

constructing simplified models that extract the essential features from problems without capturing all their complexity. Brainstorming An idea-generation process that specifi-

cally encourages any and all alternatives while withholding any criticism of those alternatives.

attracted to each other and are motivated to stay in the group. flict each desire to satisfy fully the concerns of all parties. Collectivism A national culture attribute that describes a tight social framework in which people expect others in groups of which they are a part to look after them and protect them. Communication The transfer and understanding of

Bureaucracy An organization structure with highly rou-

meaning.

tine operating tasks achieved through specialization, very formalized rules and regulations, tasks that are grouped into functional departments, centralized authority, narrow spans of control and decision making that follows the chain of command.

Communication apprehension Undue tension and anxi-

Centralization The degree to which decision making is

concentrated at a single point in an organization.

ety about oral communication, written communication, or both. Communication process The steps between a source and

a receiver that result in the transfer and understanding of meaning.

Chain of command The unbroken line of authority that

Competing A desire to satisfy one’s interests, regardless of the impact on the other party to the conflict.

extends from the top of the organization to the lowest echelon and clarifies who reports to whom.

Compromising A situation in which each party to a conflict is willing to give up something.

Challenge stressors Stressors associated with workload, pressure to complete tasks and time urgency.

Conceptual skills The mental ability to analyse and diag-

Change Making things different.

Conciliator A trusted third party who provides an infor-

Change agents Persons who act as catalysts and assume

mal communication link between the negotiator and the opponent.

the responsibility for managing change activities. Channel richness The amount of information that can be transmitted during a communication episode. Charismatic leadership theory A leadership theory that states that followers make attributions of heroic or extraordinary leadership abilities when they observe certain behaviours.

nose complex situations.

Confirmation bias The tendency to seek out information

that reaffirms past choices and to discount information that contradicts past judgements. Conflict A process that begins when one party perceives

that another party has negatively affected, or is about to negatively affect, something that the first party cares about.

Citizenship Actions that contribute to the psychological

Conflict management The use of resolution and stimu-

environment of the organization, such as helping others when not required.

Conflict process A process that has five stages: potential

Citizenship behaviour Discretionary behaviour that con-

lation techniques to achieve the desired level of conflict. opposition or incompatibility, cognition and personalization, intentions, behaviour and outcomes.

tributes to the psychological and social environment of the workplace.

Conformity The adjustment of one’s behaviour to align

Coercive power A power base that is dependent on fear

with the norms of the group.

of the negative results from failing to comply. an attitude.

Conscientiousness A personality dimension that describes someone who is responsible, dependable, persistent and organized.

Cognitive dissonance Any incompatibility between two or more attitudes or between behaviour and attitudes.

Consideration The extent to which a leader is likely to have job relationships characterized by mutual trust,

Cognitive component The opinion or belief segment of

556  glossary

respect for subordinates’ ideas, and regard for their feelings.

Defensive behaviours Reactive and protective behaviours to avoid action, blame or change.

Consultant An impartial third party, skilled in conflict management, who attempts to facilitate creative problem solving through communication and analysis.

Demands Responsibilities, pressures, obligations and even uncertainties that individuals face in the workplace.

Contingency variables Situational factors: variables that

moderate the relationship between two or more variables. Continuance commitment The perceived economic

value of remaining with an organization compared to leaving it. Contrast effect Evaluation of a person’s characteris-

tics that is affected by comparisons with other people recently encountered who rank higher or lower on the same characteristics.

Departmentalization The basis by which jobs in an organization are grouped together. Dependency B’s relationship to A when A possesses something that B requires. Deviant workplace behaviour Voluntary behaviour

that violates significant organizational norms and, in so doing, threatens the well-being of the organization or its members. Also called antisocial behaviour or workplace incivility.

Controlling Monitoring activities to ensure they are

Discrimination Noting of a difference between things; often we refer to unfair discrimination, which means making judgements about individuals based on stereotypes regarding their demographic group.

being accomplished as planned and correcting any significant deviations.

Displayed emotions Emotions that are organizationally required and considered appropriate in a given job.

Core self-evaluation The degree to which an individual likes or dislikes himself or herself, whether the person sees himself or herself as capable and effective, and whether the person feels in control of his or her environment or powerless over the environment.

Distributive bargaining Negotiation that seeks to divide

Controlled processing A detailed consideration of evi-

dence and information relying on facts, figures and logic.

Core self-evaluations (CSE) Bottom-line conclusions

individuals have about their capabilities, competence and worth as a person. Core values The primary or dominant values that are accepted throughout the organization. Cost-minimization strategy A strategy that emphasizes

tight cost controls, avoidance of unnecessary innovation or marketing expenses and price cutting. Counterproductivity Actions that actively damage the

organization, including stealing, behaving aggressively towards co-workers, or being late or absent. Creativity The ability to produce novel and useful ideas. Critical incidents A way of evaluating the behaviours

that are key in making the difference between executing a job effectively and executing it ineffectively. Cross-functional teams Employees from about the same

hierarchical level, but from different work areas, who come together to accomplish a task. Decisions Choices made from among two or more

alternatives. Deep acting Trying to modify one’s true inner feelings

up a fixed amount of resources; a win–lose situation. Distributive justice Perceived fairness of the amount and allocation of rewards among individuals. Diversity The extent to which members of a group are

similar to, or different from, one another. Diversity management The process and programmes by which managers make everyone more aware of and sensitive to the needs and differences of others. Dominant culture A culture that expresses the core val-

ues that are shared by a majority of the organization’s members. Double-loop learning A process of correcting errors

by modifying the organization’s objectives, policies and standard routines. Driving forces Forces that direct behaviour away from

the status quo. Dyadic conflict Conflict that occurs between two people. Dysfunctional conflict Conflict that hinders group

performance. Effectiveness The degree to which an organization meets

the needs of its clientele or customers. Efficiency The degree to which an organization can

achieve its ends at a low cost. Emotional contagion The process by which peoples’

based on display rules.

emotions are caused by the emotions of others.

Deep-level diversity Differences in values, personality

Emotional dissonance Inconsistencies between the emo-

and work preferences that become progressively more important for determining similarity as people get to know one another better.

Emotional intelligence (EI) The ability to detect and to manage emotional cues and information.

tions people feel and the emotions they project.

glossary   557

Emotional labour A situation in which an employee expresses organizationally desired emotions during interpersonal transactions at work.

by a given outcome and on the attractiveness of that outcome to the individual.

Emotional stability A personality dimension that charac-

knowledge.

terizes someone as calm, self-confident, secure (positive) versus nervous, depressed and insecure (negative).

Extroversion A personality dimension describing someone who is sociable, gregarious and assertive.

Emotions Intense feelings that are directed at someone or

Faultlines The perceived divisions that split groups into two or more subgroups based on individual differences such as sex, race, age, work experience and education.

something. Employee engagement An individual’s involvement with, satisfaction with, and enthusiasm for the work he or she does. Employee involvement A participative process that

uses the input of employees and is intended to increase employee commitment to an organization’s success. Employee-oriented leader A leader who emphasizes

interpersonal relations, takes a personal interest in the needs of employees and accepts individual differences among members. Employee stock ownership plan (ESOP) A company-­

established benefits plan in which employees acquire stock, often at below-market prices, as part of their benefits. Encounter stage The stage in the socialization process

in which a new employee sees what the organization is really like and confronts the possibility that expectations and reality may diverge. Environment Institutions or forces outside an organization that potentially affect the organization’s performance. Equity theory A theory that says that individuals com-

pare their job inputs and outcomes with those of others and then respond to eliminate any inequities. Escalation of commitment An increased commitment to

a previous decision in spite of negative information. Ethical dilemmas and ethical choices Situations in

which individuals are required to define right and wrong conduct. Ethical work climate (EWC) The shared concept of right

and wrong behaviour in the workplace that reflects the true values of the organization and shapes the ethical decision making of its members. Evidence-based management (EBM) The basing of man-

agerial decisions on the best available scientific evidence. Evolutionary psychology An area of inquiry which

argues that we must experience the emotions we do because they serve a purpose. Exit Dissatisfaction expressed through behaviour directed

towards leaving the organization.

Expert power Influence based on special skills or

Feedback The degree to which carrying out the work

activities required by a job results in the individual obtaining direct and clear information about the effectiveness of his or her performance. Felt conflict Emotional involvement in a conflict that cre-

ates anxiety, tenseness, frustration or hostility. Felt emotions An individual’s actual emotions. Femininity A national culture attribute that indicates little differentiation between male and female roles; a high rating indicates that women are treated as the equals of men in all aspects of the society. Fiedler contingency model The theory that effective groups depend on a proper match between a leader’s style of interacting with subordinates and the degree to which the situation gives control and influence to the leader. Filtering A sender’s manipulation of information so that it will be seen more favourably by the receiver. Five-stage group-development model The five distinct

stages groups go through: forming, storming, norming, performing and adjourning. Fixed pie The belief that there is only a set amount of goods or services to be divvied up between the parties. Flexible benefits A benefits plan that allows each

employee to put together a benefits package individually tailored to his or her own needs and situation. Flexitime Flexible work hours. Forced comparison Method of performance evaluation

where an employee’s performance is made in explicit comparison to others (e.g. an employee may rank third out of ten employees in her work unit). Formal channels Communication channels established

by an organization to transmit messages related to the professional activities of members. Formal group A designated work group defined by an

organization’s structure. Formalization The degree to which jobs within an organ-

Expectancy theory A theory that says that the strength

ization are standardized.

of a tendency to act in a certain way depends on the strength of an expectation that the act will be followed

Forming stage The first stage in group development, characterized by much uncertainty.

558  glossary

Functional conflict Conflict that supports the goals of the group and improves its performance. Fundamental attribution error The tendency to underes-

Hindrance stressors Stressors that keep you from reach-

ing your goals (for example, red tape, office politics, confusion over job responsibilities).

timate the influence of external factors and overestimate the influence of internal factors when making judgements about the behaviour of others.

Hindsight bias The tendency to believe falsely, after an

Gainsharing A formula-based group incentive plan.

Human skills The ability to work with, understand and motivate other people, both individually and in groups.

General mental ability (GMA) An overall factor of intel-

ligence, as suggested by the positive correlations among specific intellectual ability dimensions. Goal-set ting theor y A theory that says that spe-

cific and difficult goals, with feedback, lead to higher performance. Grapevine An organization’s informal communication

network. Graphic rating scales An evaluation method in which the

evaluator rates performance factors on an incremental scale. Group Two or more individuals, interacting and interdependent, who have come together to achieve particular objectives. Group cohesion The extent to which members of a group support and validate one another while at work. Group functioning The quantity and quality of a work

group’s output. Group order ranking An evaluation method that places

employees into a particular classification, such as quartiles. Groupshift A change between a group’s decision and

an individual decision that a member within the group would make; the shift can be towards either conservatism or greater risk but it generally is towards a more extreme version of the group’s original position.

outcome of an event is actually known, that one would have accurately predicted that outcome.

Hygiene factors Factors – such as company policy and administration, supervision and salary – that, when adequate in a job, placate workers. When these factors are adequate, people will not be dissatisfied. Idea champions Individuals who take an innovation and

actively and enthusiastically promote the idea, build support, overcome resistance and ensure that the idea is implemented. Idea evaluation The process of creative behaviour involving the evaluation of potential solutions to problems to identify the best one. Idea generation The process of creative behaviour that involves developing possible solutions to a problem from relevant information and knowledge. Identification-based trust Trust based on a mutual

understanding of each other’s intentions and appreciation of each other’s wants and desires. Illusory correlation The tendency of people to associate two events when in reality there is no connection. Imitation strategy A strategy that seeks to move into new

products or new markets only after their viability has already been proven. Impression management (IM) The process by which individuals attempt to control the impression others form of them.

Groupthink A phenomenon in which the norm for consensus overrides the realistic appraisal of alternative courses of action.

Individualism A national culture attribute that describes

Halo effect The tendency to draw a general impres-

Individual ranking An evaluation method that rank-­

sion about an individual on the basis of a single characteristic.

Informal channels Communication channels that are

the degree to which people prefer to act as individuals rather than as members of groups. orders employees from best to worst.

ical, physiological and inherent psychological makeup.

created spontaneously and that emerge as responses to individual choices.

Hierarchy of needs Abraham Maslow’s hierarchy of

Informal group A group that is neither formally struc-

five needs – physiological, safety, social, esteem and self-­ actualization – in which, as each need is substantially satisfied, the next need becomes dominant.

Informational justice The degree to which employees are

Heredity Factors determined at conception; one’s biolog-

tured nor organizationally determined; such a group appears in response to the need for social contact.

High-context cultures Cultures that rely heavily on non-

provided truthful explanations for decisions.

verbal and subtle situational cues in communication.

Information gathering The stage of creative behaviour

Higher-order needs Needs that are satisfied internally,

when possible solutions to a problem incubate in individual’s mind.

such as social, esteem and self-actualization needs.

glossary   559

Information overload A condition in which information inflow exceeds an individual’s processing capacity. Ingroup favouritism Perspective in which we see members of our ingroup as better than other people, and people not in our group as all the same.

Job enrichment The vertical expansion of jobs, which

increases the degree to which the worker controls the planning, execution and evaluation of the work. Job involvement The degree to which a person identifies with a job, actively participates in it, and considers performance important to self-worth.

Initiating structure The extent to which a leader is likely to define and structure his or her role and those of subordinates in the search for goal attainment.

Job rotation The periodic shifting of an employee from one task to another.

Innovation A new idea applied to initiating or improving

Job satisfaction A positive feeling about one’s job result-

a product, process or service.

ing from an evaluation of its characteristics.

Innovation strategy A strategy that emphasizes the

Job sharing An arrangement that allows two or more

introduction of major new products and services.

individuals to split a traditional 40-hour-a-week job.

Input Variables that lead to processes.

Leader–member exchange (LMX) theory A theory that

Institutionalization A condition that occurs when an

organization takes on a life of its own, apart from any of its members, and acquires immortality. Instrumental values Preferable modes of behaviour or

means of achieving one’s terminal values. Integrative bargaining Negotiation that seeks one or

more settlements that can create a win/win solution. Intellec tual abilities The capacity to do mental

­activities – thinking, reasoning and problem solving. Intentions Decisions to act in a given way. Interacting groups Typical groups in which members

interact with each other face to face.

supports leaders’ creation of ingroups and outgroups; subordinates with ingroup status will have higher performance ratings, less turnover and greater job satisfaction. Leader–member relations The degree of confidence,

trust and respect subordinates have in their leader. Leader-participation model A leadership theory that provides a set of rules to determine the form and amount of participative decision making in different situations. Leadership The ability to influence a group towards the achievement of a vision or set of goals. Leading A function that includes motivating employees, directing others, selecting the most effective communication channels and resolving conflicts.

Interactionist view of conflict The belief that conflict is not only a positive force in a group but also an absolute necessity for a group to perform effectively.

Learning organization An organization that has developed the continuous capacity to adapt and change.

Intergroup conflict Conflict between different groups or

instrument that purports to measure whether a person is task- or relationship-oriented.

teams.

Least preferred co-worker (LPC) questionnaire An

Intergroup development OD efforts to change the attitudes, stereotypes and perceptions that groups have of each other.

Legitimate power The power a person receives as a

Interpersonal justice The degree to which employees are

Long-term orientation A national culture attribute that

treated with dignity and respect. Intragroup conflict Conflict that occurs within a group

or team. Intuition A gut feeling not necessarily supported by

result of his or her position in the formal hierarchy of an organization. emphasizes the future, thrift and persistence. Low-context cultures Cultures that rely heavily on words

to convey meaning in communication. Lower-order needs Needs that are satisfied externally,

research.

such as physiological and safety needs.

Intuitive decision making An unconscious process cre-

Loyalty Dissatisfaction expressed by passively waiting for conditions to improve.

ated out of distilled experience. Job characteristics model (JCM) A model that proposes that any job can be described in terms of five core job dimensions: skill variety, task identity, task significance, autonomy and feedback. Job design The way the elements in a job are organized. Job engagement The investment of an employee’s

physical, cognitive and emotional energies into job performance.

Machiavellianism The degree to which an individual is

pragmatic, maintains emotional distance and believes that ends can justify means. Management by objectives (MBO) A programme that encompasses specific goals, participatively set, for an explicit time period, with feedback on goal progress. Manager An individual who achieves goals through

other people.

560  glossary

Masculinity A national culture attribute that describes the extent to which the culture favours traditional masculine work roles of achievement, power and control. Societal values are characterized by assertiveness and materialism.

Need for achievement (nAch) The drive to excel, to achieve in relation to a set of standards and to strive to succeed.

Material symbols What conveys to employees who

Need for power (nPow) The need to make others behave

is important, the degree of egalitarianism top management desires and the kinds of behaviour that are appropriate. Matrix structure An organization structure that creates

dual lines of authority and combines functional and product departmentalization. McClelland’s theory of needs A theory that states achievement, power and affiliation are three important needs that help explain motivation. Mechanistic model A structure characterized by extensive departmentalization, high formalization, a limited information network and centralization. Mediator A neutral third party who facilitates a negoti-

ated solution by using reasoning, persuasion and suggestions for alternatives. Mental models Team members’ knowledge and beliefs about how the work gets done by the team. Mentor A senior employee who sponsors and supports a

less-experienced employee, called a protégé. Merit-based pay plan A pay plan based on performance

appraisal ratings. Metamorphosis stage The stage in the socialization pro-

cess in which a new employee changes and adjusts to the job, work group and organization. Model An abstraction of reality. A simplified representation of some real-world phenomenon. Moods Feelings that tend to be less intense than emo-

tions and that lack a contextual stimulus. Motivating potential score (MPS) A predictive index that

suggests the motivating potential in a job. Motivation The processes that account for an individu-

al’s intensity, direction and persistence of effort towards attaining a goal. Movement A change process that transforms the organ­

ization from the status quo to a desired end state. Multiteam system A collection of two or more interdependent teams that share a superordinate goal; a team of teams. Myers-Briggs Type Indicator (MBTI) A personality test

that taps four characteristics and classifies people into 1 of 16 personality types. Narcissism The tendency to be arrogant, have a grandi-

ose sense of self-importance, require excessive admiration and have a sense of entitlement.

Need for affiliation (nAff) The desire for friendly and

close interpersonal relationships. in a way in which they would not have behaved otherwise. Negative affect A mood dimension that consists of emo-

tions such as nervousness, stress and anxiety at the high end and relaxation, tranquillity and poise at the low end. Neglect Dissatisfaction expressed through allowing conditions to worsen. Negotiation A process in which two or more parties exchange goods or services and attempt to agree on the exchange rate for them. Neutralizers Attributes that make it impossible for leader behaviour to make any difference to follower outcomes. Nominal group technique A group decision-making method in which individual members meet face to face to pool their judgements in a systematic but independent fashion. Normative commitment An obligation to remain with

an organization for moral or ethical reasons. Norming stage The third stage in group development,

characterized by close relationships and cohesiveness. Norms Acceptable standards of behaviour within a

group that are shared by the group’s members. Openness to experience A personality dimension that characterizes someone in terms of imagination, sensitivity and curiosity. Organic model A structure that is flat, uses cross-hierar-

chical and cross-functional teams, has low formalization, possesses a comprehensive information network, and relies on participative decision making. Organization A consciously coordinated social unit,

composed of two or more people, that functions on a relatively continuous basis to achieve a common goal or set of goals. Organizational behaviour (OB) A field of study that investigates the impact that individuals, groups and structure have on behaviour within organizations, for the purpose of applying such knowledge towards improving an organization’s effectiveness. Organizational climate The shared perceptions organ-

izational members have about their organization and work environment. Organizational commitment The degree to which an employee identifies with a particular organization and its goals and wishes to maintain membership in the organization.

glossary   561

Organizational culture A system of shared meaning held by members that distinguishes the organization from other organizations. Organizational demography The degree to which mem-

bers of a work unit share a common demographic attribute, such as age, sex, race, educational level or length of service in an organization, and the impact of this attribute on turnover. Organizational development (OD) A collection of

planned change interventions, built on humanistic–­ democratic values, that seeks to improve organizational effectiveness and employee well-being. Organizational justice An overall perception of what is

fair in the workplace, composed of distributive, procedural, informational and interpersonal justice. Organizational structure The way in which job tasks are

formally divided, grouped and coordinated. Organizational survival The degree to which an organ­

ization is able to exist and grow over the long term. Organizing Determining what tasks are to be done, who

is to do them, how the tasks are to be grouped, who reports to whom, and where decisions are to be made. Outcomes Key factors that are affected by some other

variables. Participative management A process in which subordinates share a significant degree of decision-making power with their immediate superiors. Path–goal theory A theory that states that it is the lead-

er’s job to assist followers in attaining their goals and to provide the necessary direction and/or support to ensure that their goals are compatible with the overall objectives of the group or organization. Perceived conflict Awareness by one or more parties of

Physical abilities The capacity to do tasks that demand stamina, dexterity, strength and similar characteristics. Piece-rate pay plan A pay plan in which workers are paid a fixed sum for each unit of production completed. Planned change Change activities that are intentional and goal oriented. Planning A process that includes defining goals, establishing strategy and developing plans to coordinate activities. Political behaviour Activities that are not required as

part of a person’s formal role in the organization but that influence, or attempt to influence, the distribution of advantages and disadvantages within the organization. Political skill The ability to influence others in such a way as to enhance one’s objectives. Position power Influence derived from one’s formal structural position in the organization; includes power to hire, fire, discipline, promote and give salary increases. Positive affect A mood dimension that consists of spe-

cific positive emotions such as excitement, self-assurance and cheerfulness at the high end, and boredom, sluggishness and tiredness at the low end. Positive organizational culture A culture that emphasizes building on employee strengths, rewards more than punishes and emphasizes individual vitality and growth. Positive organizational scholarship An area of OB research that concerns how organizations develop human strength, foster vitality and resilience and unlock potential. Positivity offset The tendency of most individuals to experience a mildly positive mood at zero input (when nothing in particular is going on).

the existence of conditions that create opportunities for conflict to arise.

Power A capacity that A has to influence the behaviour

Perceived organizational support (POS) The degree to

Power distance A national culture attribute that

which employees believe an organization values their contribution and cares about their well-being. Perception A process by which individuals organize and

of B so that B acts in accordance with A’s wishes. describes the extent to which a society accepts that power in institutions and organizations is distributed unequally.

interpret their sensory impressions in order to give meaning to their environment.

Power tactics Ways in which individuals translate power

Performing stage The fourth stage in group develop-

Prearrival stage The period of learning in the socializa-

ment, during which the group is fully functional. Personality The sum total of ways in which an individual

reacts to and interacts with others. Personality–job fit theory A theory that identifies six

bases into specific actions. tion process that occurs before a new employee joins the organization. Prevention focus A self-regulation strategy that involves

striving for goals by fulfilling duties and obligations.

personality types and proposes that the fit between personality type and occupational environment determines satisfaction and turnover.

Proactive personality People who identify opportunities,

Personality traits Enduring characteristics that describe

Problem A discrepancy between the current state of

an individual’s behaviour.

affairs and some desired state.

show initiative, take action and persevere until meaningful change occurs.

562  glossary

Problem formulation The stage of creative behaviour which involved identifying a problem or opportunity that requires a solution that is as yet unknown. Problem-solving teams Groups of 5 to 12 employees

from the same department who meet for a few hours each week to discuss ways of improving quality, efficiency and the work environment. Procedural justice The perceived fairness of the process

used to determine the distribution of rewards. Process conflict Conflict over how work gets done. Process consultation (PC) A meeting in which a consult-

ant assists a client in understanding process events with which he or she must deal and identifying processes that need improvement.

or would like to be a member, and feels group members are significant to him or her. Referent power Influence based on identification with a person who has desirable resources or personal traits. Reflexivity A team characteristic of reflecting on and adjusting the master plan when necessary. Refreezing Stabilizing a change intervention by balancing driving and restraining forces. Reinforcement theory A theory that says that behaviour

is a function of its consequences. Relationship conflict Conflict based on interpersonal

relationships. Representative participation A system in which workers

Processes Actions that individuals, groups and organ­

participate in organizational decision making through a small group of representative employees.

izations engage in as a result of inputs and that lead to certain outcomes.

Resources Things within an individual’s control that can be used to resolve demands.

Production-oriented leader A leader who emphasizes

Restraining forces Forces that hinder movement from the

technical or task aspects of the job. Productivity The combination of the effectiveness and

efficiency of an organization. Profit-sharing plan An organization-wide programme

existing equilibrium. Reward power Compliance achieved based on the ability

to distribute rewards that others view as valuable. Risk aversion The tendency to prefer a sure gain of a

that distributes compensation based on some established formula designed around a company’s profitability.

moderate amount over a riskier outcome, even if the riskier outcome might have a higher expected payoff.

Promotion focus A self-regulation strateg y that

Psychological contract An unwritten agreement that sets

Rituals Repetitive sequences of activities that express and reinforce the key values of the organization, which goals are most important, which people are important and which are expendable.

out what management expects from an employee and vice versa.

Role A set of expected behaviour patterns attributed to someone occupying a given position in a social unit.

Psychological empowerment Employees’ belief in the

Role conflict A situation in which an individual is confronted by divergent role expectations.

involves striving for goals through advancement and accomplishment.

degree to which they affect their work environment, their competence, the meaningfulness of their job and their perceived autonomy in their work.

Role expectations How others believe a person should act in a given situation.

Psychology The science that seeks to measure, explain, and sometimes change the behaviour of humans and other animals.

Role perception An individual’s view of how he or she is

Punctuated-equilibrium model A set of phases that

pret what one sees on the basis of one’s interests, background, experience and attitudes.

temporary groups go through that involves transitions between inertia and activity. Randomness error The tendency of individuals to believe

that they can predict the outcome of random events.

supposed to act in a given situation. Selective perception The tendency to selectively inter-

Self-actualization The drive to become what a person is capable of becoming.

maximizing choices within specified constraints.

Self-concordance The degree to which peoples’ reasons for pursuing goals are consistent with their interests and core values.

Rational decision-making model A decision-making model that describes how individuals should behave in order to maximize some outcome.

Self-determination theory A theory of motivation that is concerned with the beneficial effects of intrinsic motivation and the harmful effects of extrinsic motivation.

Reference group A group in which a person is aware of

Self-efficacy theory An individual’s belief that he or she is capable of performing a task.

Rational Characterized by making consistent, value-­

other members, defines himself or herself as a member

glossary   563

Self-fulfilling prophecy A situation in which a person inaccurately perceives a second person, and the resulting expectations cause the second person to behave in ways consistent with the original perception.

Social psychology An area of psychology that blends

concepts from psychology and sociology and that focuses on the influence of people on one another.

Self-managed work teams Groups of 10 to 15 people

Sociology The study of people in relation to their social environment or culture.

who take on responsibilities of their former supervisors.

Span of control The number of subordinates a manager

Self-monitoring A personality trait that measures an

can efficiently and effectively direct.

individual’s ability to adjust his or her behaviour to external, situational factors.

Status characteristics theory A theory that states that

differences in status characteristics create status hierarchies within groups.

Self-serving bias The tendency for individuals to attribute their own successes to internal factors and put the blame for failures on external factors.

Stereotyping Judging someone on the basis of one’s perception of the group to which that person belongs.

Sensitivity training Training groups that seek to change

Storming stage The second stage in group development,

behaviour through unstructured group interaction.

characterized by intragroup conflict.

Ser vant leadership A leadership style marked by going beyond the leader’s own self-interest and instead focusing on opportunities to help followers grow and develop.

Stress An unpleasant psychological process that occurs Strong culture A culture in which the core values are intensely held and widely shared.

Short-term orientation A national culture attribute that emphasizes the past and present, respect for tradition and fulfilment of social obligations.

Subcultures Minicultures within an organization, typically defined by department designations and geographical separation.

Simple structure An organization structure characterized by a low degree of departmentalization, wide spans of control, authority centralized in a single person and little formalization.

Substitutes Attributes, such as experience and training,

Single-loop learning A process of correcting errors using

emotional expressions in response to display rules.

past routines and present policies.

Surface-level diversity Differences in easily perceived

Situational leadership theory (SLT) A contingency theory

characteristics, such as gender, race, ethnicity, age or disability, that do not necessarily reflect the ways people think or feel but that may activate certain stereotypes.

that focuses on followers’ readiness. Situation-strength theory A theory indicating that the

way personality translates into behaviour depends on the strength of the situation. Skill-based pay A pay plan that sets pay levels on the basis of how many skills employees have or how many jobs they can do. Skill variety The degree to which a job requires a variety

in response to environmental pressures.

that can replace the need for a leader’s support or ability to create structure. Surface acting Hiding one’s inner feelings and forgoing

Survey feedback The use of questionnaires to identify discrepancies among member perceptions; discussion follows and remedies are suggested. Systematic study Looking at relationships, attempting to attribute causes and effects and drawing conclusions based on scientific evidence.

of different activities.

Task conflict Conflict over content and goals of the work.

Social identity theory Perspective that considers when

Task identity The degree to which a job requires comple-

and why individuals consider themselves members of groups. Socialization A process that adapts employees to the organization’s culture. Socialized charismatic leadership A leadership con-

tion of a whole and identifiable piece of work. Task performance The combination of effectiveness and efficiency at doing your core job tasks. Task significance The degree to which a job has a sub-

stantial impact on the lives or work of other people. Task structure The degree to which job assignments are

cept that states that leaders convey values that are ­other-centred versus self-centred and who role-model ethical conduct.

procedurized.

Social loafing The tendency for individuals to expend

increase trust and openness.

less effort when working collectively than when working individually.

Technical skills The ability to apply specialized knowl-

Team building High interaction among team members to

edge or expertise.

564  glossary

Technology The way in which an organization transfers

its inputs into outputs. Teleworking Working from home at least two days a week on a computer that is linked to the employer’s office. Terminal values Desirable end-states of existence; the goals a person would like to achieve during his or her lifetime.

Utilitarianism A system in which decisions are made to provide the greatest good for the greatest number. Values Basic convictions that a specific mode of conduct or end-state of existence is personally or socially preferable to an opposite or converse mode of conduct or endstate of existence. Value system A hierarchy based on a ranking of an indi-

Theory X The assumption that employees dislike work,

vidual’s values in terms of their intensity.

are lazy, dislike responsibility and must be coerced to perform.

Variable-pay programme A pay plan that bases a por-

Theory Y The assumption that employees like work,

tion of an employee’s pay on some individual and/or organizational measure of performance.

are creative, seek responsibility and can exercise self-direction.

Virtual organization A small, core organization that out-

Three-stage model of creativity The proposition that

Virtual teams Teams that use computer technology to

creativity involves three stages: causes (creative potential and creative environment), creative behaviour and creative outcomes (innovation). Traditional view of conflict The belief that all conflict is

harmful and must be avoided. Trait activation theory (TAT) A theory that predicts that

some situations, events or interventions ‘activate’ a trait more than others. Trait theories of leadership Theories that consider per-

sonal qualities and characteristics that differentiate leaders from nonleaders. Transactional leaders Leaders who guide or motivate

their followers in the direction of established goals by clarifying role and task requirements.

sources major business functions. tie together physically dispersed members in order to achieve a common goal. Vision A long-term strategy for attaining a goal or goals. Vision statement A formal articulation of an organiz­

ation’s vision or mission. Voice Dissatisfaction expressed through active and con-

structive attempts to improve conditions. Wellness programmes Organizationally supported pro-

grammes that focus on the employee’s total physical and mental condition. Whistle-blowers Individuals who report unethical practices by their employer to outsiders. Withdrawal behaviour The set of actions employees take

Transformational leaders Leaders who inspire followers

to separate themselves from the organization.

to transcend their own self-interests and who are capable of having a profound and extraordinary effect on followers.

Workforce diversity The concept that organizations are

Trust A positive expectation that another will not act

opportunistically. Two-factor theory A theory that relates intrinsic factors to job satisfaction and associates extrinsic factors with dissatisfaction. Also called motivation-hygiene theory.

becoming more heterogeneous in terms of gender, age, race, ethnicity, sexual orientation and inclusion of other diverse groups. Work group A group that interacts primarily to share information and to make decisions to help each group member perform within his or her area of responsibility.

incessant struggle to achieve more and more in less and less time and, if necessary, against the opposing efforts of other things or other people.

Workplace spirituality The recognition that people have an inner life that nourishes and is nourished by meaningful work that takes place in the context of community.

Uncertainty avoidance A national culture attribute that

Work sample tests Hands-on simulations of part or

Type A personality Aggressive involvement in a chronic,

describes the extent to which a society feels threatened by uncertain and ambiguous situations and tries to avoid them.

all of the work that applicants for routine jobs must perform.

Unfreezing Changing to overcome the pressures of both individual resistance and group conformity.

Work specialization The degree to which tasks in an

Unity of command The idea that a subordinate should

Work team A group whose individual efforts result in performance that is greater than the sum of the individual inputs.

have only one superior to whom he or she is directly responsible.

organization are subdivided into separate jobs.

Name index A Aamodt, M.G. 319 Adams, J. Stacy 163 Adams, S. 262 Aherarn, Liz 233 Akerson, Dan 524 Alexander the Great 355 Anand, N. 452 Anders, G. 358, 533 Anderson, J.R. Jr 16 Andersson, Bo 442 Ang, S. 350 Appleman, Jack 312 Armstrong, Lance 291–2 Asch, Solomon 250–1, 260 Ashenfelter, O. 200 Ashkanasy, N.M. 221 Ashkenas, R. 290 Atatürk, Mustafa Kemal 340 Augustine, Norman Ralph 146 Aurasmaa, Artti 77 Austin, E. 233 Ayling, Robert 140 B Bachman, J. 222 Back, Philippa Foster 109 Bain, Sir George 77 Bale, Gareth 497 Ball, Arie 511 Ballmer, Steve 267, 513 Balzac, Honoré de 366 Bandura, Albert 160–1 Barclay, Kathleen 524 Barra, Mary 524 Barrett, Claer 20 Baschera, Pius 482 Bass, B.M. 343 Bass, Steedman 452 Bassett, Laura 308 Bauer, T.N. 492 Beale, Marcus 335 Beckham, David 370 Begley, S. 53 Belbin, Meredith 282–3 Benitez, Emilio 465 Bennett, John 133 Bennett, R.J. 251 Bergeron, D.M. 150 Bernard, Wolfgang 442 Berry, M. 195, 376

Bertone, Andrea 76–7 Bezos, Jeff 284, 357–8, 472 Binney, George 358 Blankfein, Lloyd 190 Blatter, Sepp 367 Bloodgood, J.M. 107 Bock, Laszlo 3 Boese, Steve 313 Bolino, M.C. 16 Bolman, L. 389 Bomers, G.B.J. 405 Borg, Bjorn 128, 215 Bos, J. 511 Bos, Wouter 357 Bosnian, Adam 389 Boyd, Magnus 308 Bradburn, Jen 483 Branson, Sir Richard 20, 307, 332, 333, 335, 343, 467 Brauer, Chris 201–2 Bricker, Daniel 301 Bridoux, F. 199 Briles, Judith 390 Brinkley, Cynthia 524 Brosnahan, David 246, 247–8 Brown, E.R. 51 Browne, John, Baron Browne of ­Madingley 29 Bryant, A. 450 Bryant, Chris 442–3 Brynaert, Didier 475 Budden, Jonathan 59 Buddha 332 Buffett, Warren 356, 449 Burley, Kermit 446 Burns, Ursula 123 Buxton, Andy 544 Byron, E. 483

Carmichael. M. 107 Carnegie, Andrew 272 Carroll, Dave 228 Casmir, Fred 321 Cassani, Barbara 325 Cavalli, Roberto 467 Ceci, S.J. 51 Chen, Y-P. 16 Chinn, Carl 489 Chirac, Jacques 108 Chudy, Denise 483 Chui, M. 307 Chung Ju Yung 467 Churchill, Winston S. 332 Clark, A. 386 Clark, E.K. 51 Clark, Hayley 471 Clarke, D. 301 Coady, Tony 387 Cohen, D. 290 Cohen, R. 422 Cohen, T.R. 107 Collins, Jim 456 Conchie, Barry 475 Connelly, Thomas 524 Cook, Tim 4, 5 Cookson, Robert 87 Copland, Lynette 313 Cote, David 450 Crail, M. 232 Crom, Steve 528 Crooks, E. 29 Crump, J. 89 Culbert, S.A. 514 Cullen, J.B. 478 Cullum, Leo 370 Curry, Cecilia 293 Custer, H. 319

C Cadbury, George 489 Cadbury, Richard 489 Cain, S. 264 Caligiuri, P.M. 96 Cameron, David 190 Campagnini, John 511 Campbell, K. 222 Campion, M.A. 53 Canning, George 114 Carbee, Marshall 133 Carlyle, Thomas 355

D Da Vinci, Leonardo 178, 263 Daft, R. 311, 452 Dahl, Roald 489 D’Aloisio, Nicholas 115–16 Daniels, Timothy 172 Danyo, Edward 451 Darwin, Charles 215 Dassler, Adi 16 Daus, C.S. 221 David, P.A. 183 Davies, Dame Sally 370

566  Name Index

Day-Lewis, Daniel 44 de Balzac, Honoré 366 de Gaulle, Charles 332 de’ Medici, Lorenzo 332 de Vita, Emma 273 Deal, T.E. 389 Dearborn, D.C. 120 Del Vecchio, Leonardo 193 Descartes, René 211 DeVoe, S.E. 155 Dewhurst, M. 16 Dickinson, Bruce 247 Diekman, A.B. 51 Diener, M. 422 Diess, Herbert 442–3 Dietz, G. 280 Dimon, Jamie 397 Disney, Roy 82 Dommeyer, C. 261 Doz, Y.L. 533 Drucker, Peter 452, 474 Duff, Stuart 513 Duggan, Kris 306 Dulebohn, J.H. 350 Dunnette, M.D. 404 Dunning, Kitty 373 Dutta, Soumitra 325 Duval-Russell, Catherine 483 E Eagly, A.H. 343 Earl, Donna 233 Earley, C. 44 Easterlin, Richard 183 Eby, L.T. 469 Efrati, A. 115, 450 Egloff, B. 94 Einstein, Albert 134 Ekman, P. 29 el Kaliouby, Rana 209 El Nasser, H. 450, 452 Ellemann, Palle 77 Ellis, A.P.J. 292 Ellison, Larry 91, 194 Ells, Steve 358 Ellsworth, D. 16 Elms, H. 261 Erdogan, B. 492 Erez, A. 261 Ergen, Charlie 465 Ewing, J. 429 F Fadiman, J. 150 Farley, Samuel 173 Fastow, Andrew 119, 260 Faure, C. 264 Fayol, Henri 5 Federer, Roger 370 Ferrin, D.L. 280

Festinger, Leon 61–2 Fiedler, Fred 336–9 Fiorina, Carly 120 Fisher, Martyn 193 Fisk, G.M. 218 Flynn, J.R. 52–3 Fong, E. 261 Forbes, Moira 331 Ford, Henry 430 Ford, Henry II 471 Forstmann, Teddy 90 Foster Back, Philippa 109 Frager, R.D. 150 Frauenheim, E. 16, 172 Frederick, W.C. 98 Friesen, J.P. 218 Friis, Janus 341 Fry, Stephen 115 Fu, P.P. 373 Furnham, A. 89, 264 Furst, S.A. 150 G Gage, Phineas 214 Gajdosik, A. 457 Galbreath, J. 52 Gale, S.F. 323 Galinsky, Adam 367 Galvin, B.M. 358 Gandhi, Mohandas Karamchand (Mahatma) 340 Gangopadhyay, M. 233 Gates, Bill 140, 467 Gaulle, Charles de 332 Geenwald, J. 232 Gelfand, M.J. 412 George, Bill 307–8 Gerhard, B. 21 Ghosn, Carlos 340, 342 Gianotti, Fabiola 34 Gibson, L.L. 255 Gibson, Owen 367 Gifford, Jonny 308, 399 Gillespie, N. 280 Gilovich, T. 137 Gimbel, Tom 511 Gino, Francesca 469 Glasi, F. 405 Gold, Jack 436 Golder, S.A. 216 Goleman, Daniel 343 Goodwin, Sir Fred 335 Górska-Kołodziejczyk, Elżbieta 475 Graf, A. 412 Gratton, L. 441 Greathouse, J. 358 Gregersen, H. 96 Grégoire, Yany 228 Grimes, James 312

Groysberg, B. 350 Guimetti, G.W. 492 Guinness, Molly 331 Gyllenhammar, Pehr 91 H Hackman, J. Richard 180–1, 184, 199–200 Hamad bin Jassem bin Jabr al-Thani, Sheikh 423 Hammond, Larry 474–5 Hancock, B. 16 Harford, Tim 279 Harrison, D.A. 96 Hartel, E.J. 218 Harvey-Jones, Sir John 340 Hawk, Tony 153 Hawn, C. 267 Hayek, Salma 483 Hays, K. 260 Hayton, Philip 403 Hed, Mikael 336 Henn, S. 452 Heraclitus 520 Hershfield, H.E. 107 Herzberg, Frederick 151–2 Hewlett, Sylvia Ann 77 Hidalgo, César 279 Hill, A. 109 Hill, N.S. 533 Hilti, Eugen 482 Hilti, Martin 482 Hilti, Michael 482 Hirschmüller, S. 94 Hiyama, H. 549 Hoang, T.G. 492 Hobbes, Thomas 212 Hoch, S.J. 422 Hofstede, Geert 101–5, 135 Hogan, R. 106 Holland, Christopher 267 Holland, J. 59, 100 Hotz, R.L. 212 Hough, L.M. 404 House, Robert 338, 340 Howard, Kevin 260 Hoyos, C. 29 Huggins, R. 323 Hume, David 212, 396 Huppke, R.W. 452 I Idestam, Fredrik 465 Iksil, Bruno 397 Ilie, A. 233 Iliescu, C. 233 Imbardelli, Patrick 388 Immelt, Jeff 20 Inagaki, Kana 474 Ion, A. 233

Name Index   567

Ispas, D. 233 Iyengar, S.S. 155 J Jackson, Peter 445 Jacobs, E. 139, 173 Jacobs, Katie 65 Jagger, Mick 241 James, K. 108 Janis, Irving 259 Jay-Z 371 Jeffrey, Robert 489 Jermier, J.M. 353 Jiang Jianqing 190 Jobs, Steve 5, 134, 264, 340, 342 Johannesen-Schmidt, M.C. 343 Johns, G. 21 Johns, James 293 Johns, T. 441 Johnson, S. 323 Johnson, Sam 521 Johnston, A.M. 51 Jones, Benjamin F. 279 Jordahl, Atle 358 Jurajda, S. 200 K Kafka, Franz 428 Kahneman, D. 137 Kaltoft, Karsten 42 Kamprad, Ingvar 467, 468 Kankaaranta, A. 301 Kant, Immanuel 387 Kaplan, D.A. 457 Kappas, Arvid 212 Karlinsky, N. 292 Katz, R. 548 Kavanagh, A.L. 323 Keller, Maryann 466 Kennedy, J.C. 373 Kenney, Robert 183 Kerr, S. 353 Kerviel, Jerome 92 Ketokivi, Mikko 437 Khoi Tu 241 Kim, E. 212 King, Martin Luther Jr. 340 Kiu, X-Y. 218 Klion, Stanley 453 Knowles, Beyoncé 371 Knowles, Divinia 139 Knudstorp, Jøgen Vig 521 Koeppen, N. 16 Koeszegi, S.T. 412 Kolind, Lars 429–30 Kotter, John 529–30, 548 Kourdi, Jeremy 140 Kozlowksi, Dennis 346 Kraimer, M.L. 16 Kravitz, Noah 307

Krell, T.C. 377 Kroon, D. 478 Kullman, Ellen 524 Kun-Hee Lee 407 Kunreuther, H.C. 422 Kurtzleben, D. 183 Kutcher, Ashton 115 L Labarre, P. 429 Lagarde, Christine 331, 357 Lambert, T.A. 469 Lane, D. 358 Laninge, Niklas 134 Latham, G.P. 160, 170–1 Lauding, J. 280, 301 Lavery, Matt 314 Lay, Ken 119, 260 Lazear, Ed 195 Lee, Kate 266–7 Leeson, Nick 92 Leitman Bailey, Adam 449 Lengel, R.H. 311 Lescornez, Philippe 475 Lev-Ram, M. 514 Levine, Julie 186 Levitt, Theodore 136 Lévy, Maurice 332 Lewicki, Roy, J. 280 Lewin, Kurt 528–9, 530 Lewis, Leo 474 Li Ka Shing 115 Light, J. 511 Liu Zhengrong 479 Locke, E.A. 156, 160, 170–1 Loehr, Anne 273 Logan, G. 389 Lorinkova, N.M. 533 Lorsch, Jay 193 Louhiala Salminen, L. 301 Lowery, D. 70 Luke, Jacob 194 Luongo, Melissa 59 Lutes, Lynaia 317 Luthans, Fred 8 M Machiavelli, Niccolo 91 Macy, M.W. 216 Maddux, W.W. 123 Madoff, Bernard 384 Maltby, E. 452 Mandal, M.K. 233 Mandela, Nelson 355 Mandelson, Peter, Baron Mandelson of Foy and Hartlepool 357 Manjoo, Farhad 3 Mao Zedong 332 Mapstone, Naomi 228 Marchionne, Sergio 332, 355, 524

Markstein, Donald 453 Mars, Victoria 458 Maslow, Abraham 149–50 Mathieu, J. 290 Mathieu, J.E. 255 Maurer, T.J. 40 Mayer, Marissa 115, 187 Maynard, M.T. 255 McAfee, George 495 McCarthy, Bede 87 McCleary, Bryan 483 McClelland, David 151–2 McDermott, Bill 346 McDonald, Bob 391 McDonald, Robert 159 McEnroe, John 215 McFaniel, Jonathan 73 McGregor, Douglas 150–1 McNerney, Jim 20 McVey, Ian 68 Meager, L. 154 Medici, Lorenzo de’ 332 Medvec, V.H. 137 Mendenhall, M.E. 377 Menhart, Eric 308 Merkel, Angela 90, 108 Meyer, E. 255 Michaels, Paul S. 457 Michalak, Eva 400 Mikitani, Hiroshi 301 Millard, R. 78 Millman, J.F. 503 Milne, Richard 521 Mingroni, M.A. 53 Mintzberg, Henry 6–7 Mitchell, Dawn 511 Mitja, D. 94 Mittal, V. 137 Moisi, Dominique 331 Monin, P. 478 Morris, B. 147 Morrison, Denise 346 Morrison, S. 450 Morrison, Toni 3 Mosakowski, E. 44 Moss, Jarrod 472 Moutafi, J. 89 Mudrack, P.E. 107 Mulcahy, Anne 436 Murdoch, Rupert 355 Murdoch, Wendi 115 N Nader, Fred 390 Namie, Gary 173 Napoleon 332, 355 Neeley, T. 301 Neill, John 535 Nelson, G.L. 350 Nestler, S. 94

568  Name Index

Newton, Isaac 263 Nieboer, Crispin 227 Nietzsche, Friedrich 240 Nifadkar, S.S. 21 Nishimatsu, Haruka 358 Noe, R.A. 311 Noorderhavin, N. 478 Nooyi, Indra 355 O O’Connor, Sarah 42 Odean, Terrance 126 O’Donnell, Trish 381 Oldham, Greg 180–1, 199–200 O’Neal, Stan 352 Oprah Winfrey 291 Orton-Jones, C. 293 Ou, A.Y. 21 Owen, Matthew 223 P Pandya, M. 356 Parker, Gemma 42 Paul, Dominic 324–5 Pearsall, M.J. 292 Peng, T.K. 373 Peppler, Bill 511 Perlowski, H. 53 Pesendorfer, E-M. 412 Peters, Kai 358 Peterson, R. 405 Peterson, S.J. 358 Petrides, Konstantinos 223 Pfeffer, Jeffrey 514 Picard, Rosalind 209 Picasso, Pablo 134 Pitcher, G. 376 Plattner, Hasso 159 Plimmer, Gill 68 Polman, Paul 340 Posthuma, R.A. 53 Poston, Bill 441 Powell, Ceri 348 Pratchett, Rhianna 139 Preston, L.E. 98 Pyrillis, R. 514 Q Quirk, Peter 306 R Rabinovitch, S. 190 Rajaratnam, Raj 346 Rapp, T.L. 255 Reade, Q. 89 Reder, M.W. 183 Reeves, M.P. 469 Reitman, Ivan 147 Renny, Bruce 292–3 Rhode, Karen 306

Richards, H. 77 Richards, Keith 241 Ries, Eric 464 Rigby, Rhymer 223 Ringelmann, Max 254 Robbins, S.P. 125, 405, 406 Robertson, David 521 Robinson, S.L. 251 Rocco, Julie 186 Rockstuhl, T. 350 Roehm, Julie 232 Rokeach, Milton 98 Ronaldo, Cristiano 44 Roosevelt, Franklin D. 332, 355 Rosedale, Philip 439 Rosen, B. 150 Rosen, Scott 390 Rosenberg, E.L. 29 Rout, L. 514 Rowling, J.K. 44 Rusbult, C. 70 Russell, Bertrand 208, 214

Skilling, Jeff 260, 346 Skinner, D. 280 Skol, David 449 Slind, M. 350 Smedley, Tim 544 Snyder, J. 492 Sook-Lei Liew 212 Spalding 273 Spinoza, Baruch 212 Stein, S. 222 Stetler, B. 115 Stevenson, Betsy 183 Stewart, James B. 3 Stinson, J. 357 Stipp, D. 53 Stoute, Steve 371 Strauss-Kahn, Dominique 331 Sullivan, Louis 375 Summers, Larry 50 Surowiecki, J. 199 Suttle, J.L. 184 Swartz, Erik 358

S Sakito, Yoshiaki 548 Salas, E. 290 Samer, E. 115 Sandberg, J. 267, 391 Sanders, M.N.K. 280 Sarkozy, Nicolas 108 Sartre, Jean Paul 231 Sawers, Doug 195 Schlesinger, L. 548 Schmitt, N. 106 Schneider, André 325 Schwarzenegger, Arnold 147–8 Schweitzer, Maurice 367, 422 Scott, Sir Walter 58, 388 Selmer, J. 280, 301 Sendry, J. 377 Seo, M.-G. 533 Shaffer, M.A. 16, 96 Shahani-Denning, C. 492 Shakespeare, William 246 Sharma, R. 233 Sharma, S. 233 Shaw, George Bernard 298 Shellenbarger, S. 172, 234 Shepherd, Brett 293 Shipp, A.J. 150 Shore, L.M. 350 Shubber, Kadhim 42 Silverman, E. 96 Silverman, R.E. 172, 441 Silverton, Kate 403 Simha, A. 478 Simon, H.A. 120 Sinar, E.F. 492 Sitarenios, G. 222 Skapinker, M. 261

T Tabuchi, H. 548 Tait, N. 29 Talleyrand 330 Tannenbaum, S.I. 290 Tanzi, Calisto 29 Tarantino, Quentin 135 Taskin, L. 199 Taylor, M.S. 533 Tesluk, P.E. 533 Tett, Gillian 331 Thomann, A. 482 Thomas, K. 29, 404 Thompson, J.A. 469 Thompson, L. 107 Tienari, J. 478 Tierney, J. 51 Tilelli, Maggie 464 Timberlake, Justin 371 Torfs, Wouter 71, 172 Toyoda, Akio 432 Truxillo, D.M. 492 Tsiros, M. 137 Tsui, A.S. 21 Tuckman, Bruce 241 Tully, S. 450 Turezyn, Virginia 267 Turnley, W.H. 107 U Useem, Michael 267 V Vaara, E. 478 van Engen, M.L. 343 Van Keymeulen, Els 172 Vinge, Joan D. 2

Name index   569

Visser, V.A. 218 Vita, Emma de 273 Vroom, Victor 167, 339 Vujicic, Nick 35 W Waldock, David 287 Wallraff, Guido 77 Walsh, Willie 357 Walton, Sam 472 Warburton, Max 442 Ward, Daniel 301 Ward, S. 323 Warrior, Padmasree 325 Watts, Charlie 241 Weber, J. 98 Weber, Max 340–1 Weinstein, Elaine 193 Weintraub, K. 212

Welch, Jack 10, 158, 440, 488 Welford, Chris 513 Wells, Tony 29 Werdigier, J. 52, 190 Weston, Mike 201–2 White, D.W. 292 Wiedeking, Wendelin 127 Wileman, Andrew 513 Willard, Nancy 173 Williams, W. 51 Wilson, James Q. 132 Wilson, K. 533 Winterkorn, Martin 442 Wolfers, Juston 183 Womack, Sean 232 Wood, Ronnie 241 Woodford, Michael 376 Woods, Tiger 41 Woodward, Rick 318, 358–9

Wozniak, Steve 263, 264 Wrenn, K.A. 40 Wright, Frank Lloyd 375 Wright, Penny 28 Wulf, J. 350 Y Yanashita, Koichi 192 Yetton, Phillip 339 Yoon, D.J. 212 Yukl, G. 373 Yunus, Muhammad 83–4 Z Zawacki, A.R. 503 Zennström, Niklas 85, 341 Zhang, X. 533 Zimbardo, Paul 248 Znidar, Andrea 59 Zuckerberg, Mark 194

Subject index Note: Page references in bold indicate glossary definitions. Numeric 360-degree evaluations 440, 503 A A, personality type 89, 93, 542, 564 abilities 554 diversity 44–6 intellectual 44–5, 559 leadership and trust 348–9 men 50–1 physical 45–6, 561 of team members 279, 281–2 women 50–1 absence sickness 39, 72 tenure and 42–3 absenteeism 24 age and 38–9 job satisfaction and 72 abuse of power 375 abusive customers 233–4 abusive supervision 499 acceptance, groups and 257, 258 accommodating 404, 554 accountability 452 for outcomes 374, 379 accuracy, groups and 257 accurate information 165 achievement motivation 169 needs for see needs striving 129 achievement-oriented leaders 341 acquisitions and mergers 466, 478 acting deep 220, 225, 556 surface 220, 224–5, 563 action research 530, 554 active management by exception 343–4 activists 98 activities grouping by functions 432 social 217 additive nature of stress 541 adjourning 245, 554 administrators 5 advanced organizational forms 448

advancements 99 AET (affective events theory) 220–1, 554 affective commitments 64, 554 affective component of attitudes 60–1 affective computing 209–10 affective events theory (AET) 220–1, 554 affects intensity 215, 554 meaning 210–11, 554 negative 212–14, 560 positive 212–14, 561 affiliation needs for (nAff) 152, 560 age 38–9, 40 demographic ageing 18 diversity in workplace 53 moods and emotions and 218 selection and 492 work values 99 agents, changes 524, 555 aggressiveness 458 agreeableness 87–9, 96, 101, 282, 333, 415, 554 AI (appreciative inquiry) 533, 554 all-channel networks 304 alternative work arrangements 185–8 ambiguities 257, 305, 377–8, 380, 402–3 ambition 332 analyses, action research 530 anchoring bias 126, 129, 411, 554 anger 415 anthropology 13, 554 antisocial behaviour 251 anxiety 305, 381, 416 apathy 420 apologies 383 appearance norms 249 application forms, selection 491–2 appraisals, performance see performance: evaluations appreciative inquiry (AI) 533, 554 arbitrators 418, 554 arousal 160–1 articulation 341 artistic personality type 100 Asia managers’ perception of employee motivation 155

assertiveness 333, 404 assessment centres 495, 554 assets, organizational cultures as 464–5 assistance, downsizing 442 assumptions 36 attention to detail 458 attitudes 23, 58–60, 554 affective component 60–1 behaviour and 61–3 employability and 63 employees 462 ethical dilemmas 76 implications for managers 74–5 job 63–7, 228–9 main components 60–1 pay and 76–7 values influencing 97 attracting diverse employees 46–8 attribution theory 117–20, 352, 554 authentic leaders 346, 554 authentic leadership 346–50 authoritative commands 406 authority 290, 432, 554 automatic processing of ­communication 315–16, 554 autonomous teams 275 autonomy 99, 180–1, 447, 554 availability bias 127, 554 aversion to risks 128, 562 aviation accidents 299 avoidance 404, 554 of change 382 of conflicts 406, 420 B B, personality type 93 background checks, selection 493–4 backstabbing 390–1 balance 46 bankers 108–9 bargaining 410–13, 420 barriers to change 466, 529 barriers to communications 316–19 barriers to diversity, cultures as 466 BARS (behaviourally anchored rating scales) 505, 554 BATNA (best alternatives to negotiated agreements) 413–14, 554 behavioural component of attitudes 60–1, 554

Subject Index  571

behavioural structured interviews 496 behavioural symptoms of stress 539, 542–3 behavioural theories of leadership 334–5, 554 behavioural training 354 behaviourally anchored rating scales (BARS) 505, 554 behaviours attitudes and 61–3 citizenship 24, 555 conflicts 401, 402, 405–6 creative 133–6 defensive 382, 556 emotion-inducing 342 employees 446–8, 462 environmentally caused 161 ethical see ethics externally-caused 118–19 internally-caused 118–19 intraorganizational 412 leadership 156, 354 negative 499 performance, constituting 501 performance evaluations 502 political see politics positive organizational 20 reinforcement influence on 162 social in workplaces 499 team-building 354 unconventional 341, 342 values influencing 97 withdrawal 24, 564 at work, Big Five traits predicting 88–9 see also deviant workplace behaviours; organizational citizenship behaviour benefits flexible 196, 557 green 195 programmes design and administration 508 benevolence 348–9, 477 best alternatives to negotiated agreements (BATNA) 413–14, 554 biases 119–20, 125–8, 496 big data 11–12 Big Five personality model 86, 87–8, 554 behaviour at work predictions 88–9 cultures and 101 negotiations 415 teams and 282 trait theories and 332–3 biographical characteristics 38–43, 554–5 biophilia 154 blame avoidance 382

blind spots, moral 132 blogs 308, 314 boards of directors representative participation on 189 women on 52 body coordination 46 body language 309, 310 bonuses 191, 193, 555 bookselling 11 bossless work 352 bottom line culture contributing to 464–5 job satisfaction and 72–3 boundary-defining roles of culture 461 boundaryless organizations 439, 440–1, 555 bounded rationality 124–5, 555 brainstorming 261–2, 263–4, 266–7, 555 bribery 132, 479 broken windows theory 132 buck passing 382 buffing 382 bullying 172–3, 499 bureaucracies 436–7, 438–9, 450–1, 555 C camaraderie 29–30 capacity of environments 445 capitalism 479 cardinal traits 106 career functions, mentoring 351 career values 99 carefulness 494 caring ethical climates 463–4 cause-and-effect relationships 125 centralization 430, 434–5, 447, 555 chain networks 304 chain of command 430, 432–3, 555 challenge stressors 538, 555 challenges 99 for organizational behaviour 14–22 challenging goals 157 change-orientation 99 changes 520–2 agents 524, 555 avoiding 382 barriers to 466, 529 cultures for 534–7 definition 523, 555 employability and 527 forces for 522–3 implications for managers 545–6 management 528 action research 530 episodic activity 546 Kotter’s eight-step plan for implementing change 529–30

Lewin’s three-step model 528–9 organizational development (OD) 530–3 skills 527 organization structures 453 of organizational cultures 480 perpetual 533 planned 523–4, 561 politics of 527–8 prevention 382 reinforcing 530 resistance to 524–8 strategy and 547 stress and 537 technological 539 channel richness 310, 555 channels of communication see ­communications charisma 332, 333, 352 charismatic leadership see leadership cheating 107 chefs 273 child care 509, 510 China executive pay 190 influence tactics 373 choices 131 ethical 21, 557 citizenship 510, 555 behaviour 24, 150, 166, 555 leadership–citizenship behaviour relationships 345 see also organizational ­citizenship behaviour civility training 499 clarification 413, 414 clarity 95, 527 classifications, groups 242–3 client relationships 183–4 closure, negotiations 413, 414 cloud-based electronic data storage 314 coaches 354 coaching 351, 527 coalitions 372–4, 529 code and law ethical climates 463–4 coercion, overcoming resistance to change 527 coercive power 369, 371, 555 cognition 316 conflicts 401, 402, 403 cognitive ability 223, 494 cognitive component of attitudes 60–1, 555 cognitive dissonance 61–3, 555 cognitive evaluation theory 154, 169, 555 cohesion, groups 24–5, 558 cohesiveness 254–5, 555

572  Subject Index

coincidences 125 collaboration 362, 404, 449, 555 collaborative idea generation 134 colleagues, supportive 74 collective socialization 470 collectivism 105, 119, 166, 192, 287, 320, 408–9, 507, 555 collusions 422 combining tasks 183–4 command authoritative 406 chain of 430, 432–3, 555 unity of 432, 564 commitment building, overcoming resistance to change 526 cultures facilitating generation of 462 escalation of 127–8, 129, 557 organizational 64–5, 66, 560 common plan and purpose, teams 279, 285–6 communications 298–300 apprehension 318–19, 555 automatic processing 315–16, 554 barriers to 316–19 channels 302, 310–15, 402 conflicts and 402, 406 controlled processing 315–16, 556 cross-cultural 319–21 cultural barriers 318 definition 300, 555 direction of 302–3 downsizing 442 downward 302–3 employability and 315 ethical dilemma 324 face-to-face 305 formal, stress management and 545 functions 300–1 immediate 317 implications for managers 322 lateral 303 management activities 8, 9 misrepresentation 319 modes of 305–10 new visions, change implementation 529 nonverbal 309–10, 314, 323–4 oral 305–6, 311 organizational 304–5 overcoming resistance to change 525–7 persuasive 315–16 process 301–2, 555 upward 303 verbal 305, 309, 310 work values 99 written 306–9 comparisons, forced 505, 557

competence 339 competency-based pay 194 competing 404, 555 competition 522–3, 536 complacency 420 completer finisher team roles 283 complexities 123, 423–4, 446 composition of teams 279, 280, 281–4 comprehension, verbal 44–5 compromise 406, 413, 420 compromising 405, 555 computer-based training 500 conceptual skills 7–8, 555 conceptualizers 86 conciliators 418, 555 confidence 163 confidentiality 451–2 confirmation bias 125, 126, 555 conflicts 396–8 behaviour 401, 402, 405–6 cognition and personalization 401, 402, 403 communications and 402 constructive 406–7 cultures and 320, 407, 408, 409 definition 398, 555 dyadic 400–1, 556 dysfunctional 399, 405, 419, 421, 556 felt 403, 557 functional 399, 405, 407, 408–9, 419, 558 implications for managers 420 incompatibility 401–3 intentions 401, 402, 403–5 interactionist view 399, 401, 559 intergroup 400–1, 559 intragroup 400–1, 559 loci of 400–1 management techniques 405–6, 555 outcomes 401, 402, 406–9 perceived 403, 561 personal variables 403 personalization 401, 402, 403 potential opposition or incompatibility 401–3 process conflicts 399–400, 562 process of 401–9, 555 relationship 286–7, 399–400, 562 resolution techniques 406 resources 377 roles 247–8, 562 size stimulating 402 specialization stimulating 402 stimulation techniques 406 structures 402–3 task 286, 399–400, 563 teams 276, 279, 286–7 traditional view 398, 564 unit performance and 419 work–life 20, 317, 508–10

conformity 250–1, 257, 383, 555 confrontation, organizational ­development 531 conscientiousness 87–9, 94, 96, 101, 129, 161, 223, 282, 333, 494, 555 consensuses 118 consequences 95 of political behaviour 378–85 of stress 542–3 of trust 349–50 consideration 334, 343–4, 555–6 consistency 95, 118 constraints 95 organizational decision-making 129, 130–1 constructive conflicts 406–7 consultants 532, 556 negotiations 418–19 consultation 372–4 process (PC) 532, 562 contagion, emotional 228, 556 contemporary work values 98–9 contempt 378 contexts cultures 321 teams 280–1 contingency theories of leadership 336–9 contingency variables 13, 556 contingent rewards 343–4 leadership 345 contingent selection 491, 496–7 continuance commitments 64, 556 contrast effects 121, 556 control communications and 300, 301 internal locus of 379 span of 430, 433–4, 447, 563 controlled processing of ­communication 315–16, 556 controlling functions 6, 556 conventional organizational forms 448 conventional personality type 100 cooperation 98 cooperativeness 404 co-optation, overcoming resistance to change 526, 548 coordinator team roles 283 core-plus benefit plans 196 core self-evaluations (CSE) 69, 89, 90–1, 556 core values 460, 556 corrosive effects of power 375 corruption 367, 385 perceptions of 117 power and 374–5 cost-minimization strategies 444, 556 counselling 351 counterproductivity 501, 556 courage 332

Subject Index  573

creation of organizational cultures 466–71 creative collaboration 362 creativity 114–16, 345, 556 culture role 135 decision-making 133–4 employability and 134 environment 135–6 groups 258 innovation 133–4, 136 leadership and 135 moods and 226–7 outcomes 136 potential 134–5 team work 135–6 three-stage model of 133, 564 crises 528 critical incidents, performance ­evaluations 504, 556 cross-cultural communication 319–21 cross-functional teams 276, 277, 556 cross-hierarchical teams 440 cross-training 182 CSE (core self-evaluations) 69, 89, 90–1, 556 cultural diversity 284 cultural identity 43 cultural norms, differing 17–8 cultures barriers communications 318 languages 320 changes 534–7 work–life strategies 509 conflicts and 320, 407, 408, 409 contexts 321 creativity and 135 differences attribution theory 119–20 decision-making 130 expectancy theory 167 stress 542 different, working with people from 17 diversity, conflicts and 407 GLOBE framework for assessing 105 groups 321 high-context 310, 320–1, 558 of innovation 534–5 intelligence 44 low-context 310, 320–1, 559 national 21 negotiations and 416 personality and 101 teams and 218 third 321 values and 101–5 virtual organizations 440 see also organizational cultures

customers abusive 233–4 departmentalization by 432 dissatisfaction 72 emotions 228 satisfaction 71–2 service display rules and 230–1 emotions and 228 improving 18–19 representatives 233–4 cyberbullying 172–3 D data big 11–12 incorrect interpretation 130 data-driven management 11 day of week, moods and 216–17 deadlines negotiations 411 temporary groups with 245–6 decentralization 430, 434–5, 462 deception 422 decision-making 114 biases in 125–8 centralization 434–5 creativity in 133–4 cultural differences 130 data-driven 11 decentralization 434–5 emotions and 226 employee involvement stress management and 545 errors in 125–8 ethics 131–2, 138–9 gender and 129 groups 257–62 individual differences 129–30 implications for managers 136–7 perceptions and, link between 122 intuitive 125, 559 joint 189 mental ability 129–30 moods and 226 in organizations 123 bounded rationality 124–5, 555 constraints 129, 130–1 intuition 125 rational model 124, 562 overconfident 375 participation in 158 participative 440 personality and 129 politics and 375–6 rational 124, 562 self-interested 375 decisional roles 6, 7

decisions 122, 556 human resources 501 making see decision-making worst business decisions 140 decoding 302 deductive reasoning 44–5 deep acting 220, 225, 556 deep-level diversity 36–7, 556 defensive behaviours 382, 556 deferred resistance to change 524 degrees of routineness 445 demands 538, 539–40, 556 democracy 321, 380 demographic ageing 18 demographic characteristics of ­European workforce 36 demographics 36, 284–5 departmentalization 430, 431–2, 556 dependability 494 dependency 368, 371–2, 556 depression 129 designs appreciative inquiry 533 jobs see jobs organization structures, ­redesigning 536 see also organizational designs deskless workplaces 451–2 destiny, appreciative inquiry 533 destruction 398 development of diverse employees 46–8 intergroup 532–3, 559 programmes 497–500 deviant workplace behaviours 72, 229, 251–2, 556 devil’s advocates 406 diagnosis, action research 530 different referents 164 difficult goals 157 digital forensics 314 direct services, work–life initiatives 509 direction 149 of communications 302–3 directive leadership 338–9 directors, boards of see boards of directors disabilities 41–2, 46 discovery, appreciative inquiry 533 discrimination 556 age 39 diversity 37–8 policies or practices 37 race 41 religious 43 sex 40–1 social media and 323 types 37–8 unfair 37–8

574  Subject Index

dismissal for poor performance 513 termination processes 510 display rules 230–1 displayed emotions 219, 556 disputes 510 dissatisfaction customers 72 jobs 70–3, 151 disseminator roles 6, 7 dissonance 61–2, 219 distinctiveness 118, 243 distorting perceptions 163–4 distributive bargaining 410–11, 415, 420, 556 distributive justice 164–5, 166, 556 disturbance handlers 6, 7 diversity 34–6 abilities 44–6 attracting diverse employees 46–8 barriers to, cultures as 466 cultural 284 demographic characteristics of European workforce 36 development of diverse employees 46–8 discrimination see discrimination in education 284 employability and 49 ethnic 284 in expertise 284 in function 284 gender 284 of goals 402–3 groups 48, 255–7 levels 36–7 management 556 effective 48–9 strategies 46–9 national differences 284 programmes 48–9 race 284 retention of diverse employees 46–8 selection of diverse employees 46–8 teams 135–6, 279, 283–4 training 48 of views, groups and 257 workforce 18, 28, 36, 564 divestiture socialization 470 division of labour 430 ‘do your best’ 156–7 dominant organizational cultures 460, 556 domination, groups and 257 doping 291–2 dot.com boom 140 double-loop learning 536, 556 doubts 137 downsizing 379–80, 441–2, 510 downward communications 302–3

downward influence 373 dreaming, appreciative inquiry 533 driving forces 528–9, 556 drug tests 496–7 due process, providing employees with 506 dumb, playing 382 dutifulness 129 dyadic conflicts 400–1, 556 dynamic environments 445–6 dynamic flexibility 46 dynamic process of interaction 405 dynamic strength 46 dynamics, power 388–9 dynamism 346 dysfunctional conflicts see conflicts dysfunctional outcomes of conflicts 407–8 E e-learning 500 e-training 500 EAP (employee assistance ­programmes) 544, 549 EBM (evidence-based management) 10, 557 ECHR (European Convention on Human Rights) 131 ECI (ethical climate index) 463–4 ECI-2 (Emotional Competence ­Inventory) 232 economic factors, resistance to change source 525 economic pressures 14 economic problems 540 economic shocks, forces for change 522–3 economic uncertainties 539 ECT (ethical climate theory) 463–4 education 99 diversity in 284 overcoming resistance to change 525–7 see also learning; training effective activities 8–9 effective diversity management 48–9 effective leaders 333, 353–4 effective managers 8–9 effectiveness 23, 24, 25, 556 groups 257–8, 262 management 377 negotiations, individual differences in 414–17 power bases 371 teams 278–87 training evaluation 500 efficacy, teams 279, 286 efficiency 23, 24, 25, 457, 556 groups 257–8 effort–performance relationships 167, 169 EI see emotional intelligence

eight-step plan for implementing change 529–30 elimination of performance ­evaluations 513–14 emails 306–7, 312–13 emotion-inducing behaviour 342 Emotional Competence Inventory (ECI-2) 232 emotional contagion 228, 556 emotional dissonance 219, 556 emotional intelligence (EI) 221–4, 226, 232–3, 333, 556 emotional labour 219–20, 557 emotional regulation 224–5 emotional stability 87–9, 96, 161, 333, 557 emotional testing 223 emotions 208–10, 476, 557 basic 211–12 communications and 301, 317 conflicts and 403 displayed 219, 556 emails and 312 employability and 223 felt 219, 557 functions 214–15 implications for managers 230 meaning 210–11, 557 negative 229 negotiations and 415–16 organizational behaviour ­applications 225–30 sources 215–18 teams and 218 empathy 333 employee assistance programmes (EAP) 544, 549 employee-oriented leaders 334, 557 employee stock ownership plans (ESOP) 191, 194–5, 557 employees attitudes, cultures and 462 behaviours 446–8, 462 decision-making involvement stress management and 545 differences 198 due process, providing 506 engagement 65–6, 156, 303, 557 involvement 188–90, 557 learning organizational cultures 471–2 monitoring 171–2 motivation, managers’ perceptions of 155 participation 198 performance evaluations see performance: evaluations organizational cultures impact on 479 span of control and 447

Subject Index  575

recognition programmes 196–7 satisfaction, organizational cultures impact on 479 strengths, building on 474–5 surveillance 201–2 surveys by managers 73 turnover see turnover voluntary sector 97 well-being at work 19–20 withdrawal see deviant workplace behaviours see also jobs employment interviews, judgements in 121 options 14–16 policies drafting and enforcement 508 tenure 42–3 empowerment 64, 172, 529 teams 290 see also power enactive mastery 160–1, 163 encoding 302 encounter groups 531 encounter stage of socialization 469–70, 557 encouragement 346 energy 332 engagement 148, 156 employees 65–6, 303, 557 English as global language 301 enhancement 383 enrichment, jobs 183–4, 559 enterprise social software 307 enterprising personality type 100 enthusiasm 332 ENTP (Extroverted/Intuitive/ Thinking/Perceiving) people 86 entrepreneurs 6, 7, 93 environmental factors, stress 539 environmentally caused behaviour 161 environments 557 creativity 135–6 motivation 162 organization structures 445–6 simple 446 work, positive 20 envy 229 equitable rewards 74 equity pay and 190–1 rewards 198 theory 163–6, 169, 170, 557 errors in decision-making 125–8 in performance evaluation 505 escalation of commitment 127–8, 129, 557 ESOP (employee stock ownership plans) 191, 194–5, 557 esteem needs 149–50

ESTJ (Extroverted/Sensing/Thinking/ Judging) people 86 ethical climate index (ECI) 463–4 ethical climate theory (ECT) 463–4 ethical work climate (EWC) 463, 557 ethics behavioural 132, 554 improvement 21–2 choices 21, 557 decision-making 131–2, 138–9 dilemmas 21, 557 attitudes 76 communications 324 deskless workplaces 451–2 leadership 356–7 negotiations 422 organizational cultures 481–2 selection 512–13 teams 291–2 expectations communicating 473 impression management 387–8 leadership 346–7 organizational cultures 463–4, 473–4, 478–9, 481–2 political behaviour 385, 387–8 rewarding 473 training 473, 499 workplace romances 232 ethnic diversity 284 ethnicity 41 EU see European Union Europe demographic characteristics of workforce 36 employee training in 498 see also European Union European Convention on Human Rights (ECHR) 131 European Union (EU) ageing population 36 Data Retention Directive 312 diversity 18 see also Europe European Values Study (EVS) 98 evaluations action research 530 cognitive evaluation theory 154, 169, 555 ideas 134, 558 performance see performance self-evaluations 69, 89, 90–1, 503 transformational leadership 345–6 variable pay 195 evaluators 502–4, 505–6 evidence, substantive 10 evidence-based management (EBM) 10, 557 evolutionary psychology 215, 557 EVS (European Values Study) 98 EWC (ethical work climate) 463, 557

exchange 372–4 exclusion 37–8 excuses 383 executives 98 pay 190 exemplification 383 exercise 217, 543–4 exit 70, 557 expansion of resources 406 expat personality 96 expectancy theory 167–8, 170, 557 expectations 246–7, 346, 452, 473 experience openness to see openness stress and 541 expert power 370, 557 expertise 135, 525 diversity in 284 explanations 165 explosive strength 46 extent flexibility 46 external equity 191 externally-caused behaviours 118–19 extreme jobs 77–8 extrinsic rewards 154–5 extroversion 86, 87–9, 96, 101, 332–3, 340, 341, 415, 557 Extroverted/Intuitive/Thinking/ Perceiving (ENTP) people 86 Extroverted/Sensing/Thinking/Judging (ESTJ) people 86 F face time 198–9 face-to-face communications 305, 310, 311 face validity 495 facial expressions 309, 310 facts 321 fair procedures 165 fair treatment 166 fairness 164–5, 166, 321, 347, 492 false syllogisms 130 family relationships 540 faultlines, groups and teams 256–7 favours 383 feedback 180–1, 557 action research 530 channels 183–4 communications and 302, 310 goals 545 implications for managers 198 management by objectives 159 on performance 501, 504, 506–7, 512 on progress toward goals 157 self-generated 157 survey 531, 563 feeling types 86 felt conflicts 403, 557

576  Subject Index

felt emotions 219, 557 femininity 102, 557 Fiedler contingency model 336–9, 557 figurehead roles 6, 7 film making 439 filtering 316, 557 firefighters 46 first impressions 496 Fitbits 201–2 five-stage group-development model 244–5, 557 fixed pie 410, 557 fixed socialization 470 flat organizations 449–50 flattery 383 flexibility 46, 100, 439 flexible benefits 196, 557 flexible spending plans 196 flexible working 509, 510 flexitime 185–6, 509, 510, 557 Flynn effect 52–3 fMRI (functional magnetic resonance imaging) 222 focus 162, 410 followers 338, 339–40, 342, 347 following-through 527 forced comparisons 505, 557 forcing clarity 527 foreign assignments 16–17 forensics, digital 314 foresight 346 formal communications channels 302, 557 stress management and 545 formal groups 242, 557 formal power 369–72, 371 formal regulations 131 formal small-group networks 304 formal socialization 470 formal training 499 formalization 430, 435, 461, 557 formation of organizational cultures 471 forming 241, 244, 557 fragmentation 536 freedom 457 friendship 98 function, diversity in 284 functional conflicts see conflicts functional magnetic resonance ­imaging (fMRI) 222 functional outcomes of conflicts 406–7 functioning, groups 25, 558 functions, departmentalization by 432 fundamental attribution error 119, 558 future orientation 105 G gainsharing 191, 194, 558 Galatea effect 161

Gamergate controversy 139 games industry 139–40 gathering information see information gender 39–41 decision-making and 129 differentiation 105 diversity 284 emotions and 218 negotiations differences 416–17 selection and 492 work values 99 see also men; women general mental abilities (GMA) 45, 558 generation, ideas 134, 558 generational values 99 geography, departmentalization by 432 global issues job satisfaction 73 organizational cultures 478–9 values 101–5 Global Leadership and ­Organizational Behaviour Effectiveness (GLOBE) research programme 105, 335, 346 global personality 101 global virtual teams 255 globalization, responding to 14–18 GLOBE framework for assessing cultures 105, 335, 346 GMA (general mental abilities) 45, 558 GMAT (graduate management ­admission tests) 44 goals bargaining 410 challenging 157 difficult 157 diversities of 402–3 feedback 157, 545 focus on 125 groups 252 implications for managers 198 motivation and 148–9 negotiations 413 organizational 149 path-goal theory of leadership 338–9, 561 of planned changes 524 rewards–personal goals relationships 167, 169 setting clear 162 implementing 158–9 participation in 158 stress and 544–5 theory 156–9, 168, 169, 170–1, 558 specific 156–7, 158 stretch 158, 159

superordinate 406 teams 279, 286 transformational leadership 345 virtual organizations 440 see also objectives GPS signals 11 graduate management admission tests (GMAT) 44 graduates 99 grammar 312 grapevines 304, 558 graphic rating scales 505, 558 green benefits 195 ground rules, negotiations 413, 414 groups 240–2 attributions 119 classifications 242–3 cohesion 24–5, 558 cohesiveness 254–5, 555 cultures 321 decision-making 257–62 definitions 242, 558 development stages 243–6 diversity 48, 255–7 effectiveness 257–8, 262 efficiency 257–8 employability and 244 faultlines 256–7 five-stage group-development ­model 244–5, 557 formal 242, 557 functioning 25, 558 goals 252 groupshift 258, 260–1, 558 groupthink see groupthink implications for managers 263 individuals versus 257–8 inertia, resistance to change source 525 informal 242, 558 interacting 253, 261, 559 intergroup conflicts 400–1, 559 intragroup conflicts 400–1, 559 nominal group technique 262, 560 norms 249–52, 263 order ranking 505, 558 performance 263 polarization 261 properties 246–57 punctuated-equilibrium model 245–6, 562 reference 251, 562 roles 246–8 satisfaction and 263 size 253–4 status 243, 252–3, 263 stereotyping 119 task 246 teams and, differences between 274–5

Subject Index  577

temporary with deadlines 245–6 trust and 350 groupshift 258, 260–1, 558 groupthink 258–60, 267, 407, 420, 558 growth emphasizing 474, 475 environments and 445 personal 99 H habits, resistance to change source 525 halo effect 120, 505, 558 happiness 69, 70, 73, 183 harassment, sexual 37 hard work 98 Hawthorne studies 69, 249–50 heredity 85, 558 Herzberg’s two-factor theory 151–2, 169, 190, 564 hierarchies 437 Maslow’s hierarchy of needs 149–50, 151, 170, 558 high-ability teams 282 high-context cultures 310, 320–1, 558 high-performance work systems (HPWS) 508 high-status people 252–3 higher-order needs 149, 558 hindrance stressors 538, 558 hindsight bias 125, 128, 558 historical precedents 131 Hofstede’s cultural dimensions 101–5, 135 homeworking 19 honesty 98, 494 ‘hot’ team members 285 HPWS (high-performance work systems) 508 HR see human resources HRM (human resource management) 8 human resources (HR) decisions 501 employability and 490 innovative organizations 534–5 leadership roles 507–8 benefit programmes design and administration 508 employment policies drafting and enforcement 508 layoffs 510 mediations 510 terminations 510 work–life conflicts management 508–10 management (HRM) 8 policies and practices 488–90 implications for managers 510–11 performance evaluation see performance selection see selection

training and development programmes 497–500, 511 human rights 98, 131, 312–13 human skills 7, 9, 558 human variables, altering 406 hygiene factors 152, 558 I idea champions 535, 558 ideas 136 evaluation 134, 558 generation 134, 558 scientific 279 idealized influence 343–4 identification-based trust 353, 558 identity cultures conveying sense of 461 multicultural 123 tasks 180–1, 563 IJV (international joint ventures) 441 illusory correlations 217, 558 IM (impression management) 382–5, 387–8, 496, 558 IM (instant messaging) 307, 313 imitation strategies 444, 558 immediate communication 317 immediate resistance to change 524 implementation 354, 413, 414 implementer team roles 283 implicit resistance to change 524 importance 371 impression management (IM) 382–5, 387–8, 496, 558 improvements consolidation, change implementation 530 incivility 37–8, 251 incompatibility, conflicts 401–3 incorrect interpretation of data 130 independence ethical climates 463 independent variables 20 individual decision-making see decision-making individual differences, stress 539, 541 individual–organization fit 462 individual practices 470 individual ranking 505, 558 individual resistance to change sources 525 individual socialization 470 individual task outcomes 501 individualism 102, 105, 135, 166, 287, 320, 408–9, 507, 558 individualized consideration 343–4 individuals groups versus 257–8 negotiations 412 teams and 287–9 inductive reasoning 44–5 ineffective leaders 333

inequity 162–6, 253 inertia, resistance to change source 525 influences 62 followers 342 idealized 343–4 tactics 372–4 informal channels of communication 302, 558 informal groups 242, 558 informal organizations 449–50 informal socialization 470 informal training 499–500 information accurate 165 communications and 301 gathering 134, 558 selective 126 groups and 257 insufficient 402 overload 317, 559 richness 311 security 314 selective processing 525 sharing 349–50, 410 information-based work–life strategies 509 informational justice 164, 165, 558 informational roles 6, 7 ingratiation 372–3, 384–5 ingroup favouritism 242, 559 initial selection 491–4 initiating structures, leadership 334, 559 injury at work 229 injustice 165 innovation creativity 133–4, 136 cultures of 534–5 definition 534, 559 organizational cultures and 458, 464 sources 534–5 strategies 444, 559 inputs 23, 559 jobs 163–4 inspirational appeals 372–4 inspirational motivation 343–4 instability in environments 445–6 instant messaging (IM) 307, 313 institutional practices 470 institutionalization 465–6, 559 instrumental ethical climates 463–4 instrumental values 98, 559 insults 37 integrative bargaining 410, 411–13, 415, 420, 559 integrative complexity 123 integrity 348–9, 494 intellectual abilities 44–5, 52–3, 559

578  Subject Index

intellectual stimulation 343–4 intelligence 135, 161 cultural 44 emotional (EI) see emotional intelligence IQ tests 44, 52–3 tests 494 intensity 149 intentions 559 conflicts 401, 402, 403–5 interacting groups 253, 261, 559 interactions dynamic process of 405 social 188 interactionist view of conflicts 399, 401, 559 interdependence 188 interests bargaining 410 inventories 494 levels, messages 315 vested 120 intergroup conflicts 400–1, 559 intergroup development 532–3, 559 internal equity 190–1 internal locus of control 379 internally-caused behaviours 118–19 international joint ventures (IJV) 441 internet trolls 308 internships, reverse 457 interpersonal demands 540 interpersonal justice 164, 165–6, 559 interpersonal roles 6, 7, 9 interpersonal skills 4–5, 281, 287, 498–9 interpretations 377–8 of facts 321 interviews impression management techniques in 384 selection 495–6 intimidation 37 INTJ (Introverted/Intuitive/Thinking/ Judging) people 86 intonations 309–10 intragroup conflicts 400–1, 559 intranets 325 intraorganizational behaviours 412 intrinsic motivation 169, 190 intrinsic rewards 196–7 Introverted/Intuitive/Thinking/Judging (INTJ) people 86 introverts 86, 87, 89 intuition 9–12, 125, 130, 559 intuitive decision-making 125, 559 intuitives 86 investigative personality type 100 investiture socialization 470 investor overconfidence 126 involvement

downsizing 442 employees 188–90, 557 jobs 64, 66, 559 IQ tests 44, 52–3 irrationality 214–15, 398 J jargon 402 JCM (job characteristics model) 180–2, 199–200, 559 jobs anxiety 381 applications 491–2 attitudes 63–7, 228–9 characteristics model (JCM) 180–2, 199–200, 559 design 169, 559 alternative work arrangements 185–8 job characteristics model (JCM) 180–2, 199–200, 559 motivation by 180–8 redesign 182–5, 545 relational 184–5 social and physical context of work 188 dissatisfaction 70–3, 151–2 engagement 156, 559 enrichment 183–4, 559 extreme 77–8 inputs 163–4 involvement 64, 66, 559 knowledge 505 movement to countries with lowcost labour 17 outcomes 163–4 personality–job fit theory 100, 561 redesign 182–5, 545 rotation 182, 559 satisfaction 58–60, 63, 66, 151–2, 559 age and 39 causes 68–9 centralization and 447 customer satisfaction and 71–2 global implications 73 happiness and 69, 73 implications for managers 74–5 important factors 75–6 levels of 68 measuring 66–7 organizational cultures and 459 organizational politics and 381 pay and 69, 76–7 tenure and 43 two-factor theory 151–2 work specialization and 447 work values 99 workplace impact 70–3 sharing 186, 509, 510, 559

stress 381 titles 449 vertical expansion 183 see also employees joint decision-making 189 joint partnerships 441 joint ventures, international (IJV) 441 judgements delaying 321 about others attributions 117–20 shortcuts 120–2 judging types 86 juries 260 jurisdictional ambiguities 402–3 justice 132 organizational 163–6, 169, 442, 561 procedural 165, 166, 345, 562 justifications 165, 413, 414 justifying 382 K knowledge groups and 257 jobs 505 prior, of messages 316 of self 321 knowledge-based pay 194 Kotter’s eight-step plan for implementing change 529–30 L laboratory training 531 labour division of 430 emotional 219–20 labour–management negotiations 410 laissez faire leadership 343–4 languages communication barriers 317–18 cultural barriers 320 organizational cultures 472 lateral communications 303 lateral influence 373 Latin America managers’ perception of employee motivation 155 law and code ethical climates 463–4 layoffs 510 leader–member exchange (LMX) theory 339–40, 350, 559 leader–member relations 337, 558 leader-participation model 339, 559 leaders achievement-oriented 341 authentic 346, 554 effective, finding and creating 353–4 employee-oriented 334, 557 effective 333

Subject Index  579

ineffective 333 participative 338, 339 people-oriented 355 personality 332 production oriented 334–5, 562 relationship-oriented 336–8 selection 353–4 situations and, matching 337–8 supportive 338–9 task oriented 336–8, 355 training 354 transactional 343–4, 564 transformational 343, 564 leadership 273, 330–2 attribution theory of 117–20, 352, 554 authentic 346–50 behavioural theories 334–5, 554 behaviours 156, 354 challenges 351–3 charismatic 340–3, 345, 346, 354, 555 contingency theories 336–9 creativity and 135 definition 332, 559 directive 338–9 emotions and 227 employability and 343 ethical dilemma 356–7 ethics 346–7 Fiedler contingency model 336–9, 557 followers 338, 339–40 human resources roles see human resources implications for managers 355 leader–member exchange (LMX) theory 339–40, 350, 559 leader-participation model 339, 559 management and, differences between 332 neutralizers of 352–3, 560 Ohio State studies 334, 338, 343 online 353 path-goal theory 338–9, 561 power and, contrasting 368–9 relationship-oriented 336–8, 353 roles 6 servant 347, 357–8, 563 situational theory 338, 563 strong 462 styles 336, 355 substitutes for 352–3, 563 successful 358–9 supportive 338–9 task-oriented 336–8, 355, 353 teams 279, 280–1, 282, 284 trait theories 332–4, 335, 564 transactional 344–5 transformational 343–6, 346, 354 trust and 348–50

University of Michigan studies 334 vision 346 Vroom and Yetton’s leader-­ participation model 339, 559 work values 99 see also leaders leadership–citizenship behaviour relationships 345 leading functions 6, 9, 559 lean organizations 441–2 learning double-loop 536, 556 e-learning 500 form of organization 448 managing 536–7 single-loop 536, 563 learning organizations 535–7, 559 least preferred co-worker (LPC) questionnaires 336, 559 leaving the field 164 legitimacy 372 legitimate power 369–70, 371, 379, 559 leniency 505 letters 306, 312 of recommendation 493, 496 Lewin’s three-step model of change management 528–9 liabilities, organizational cultures as 461, 465 liaison roles 6, 7 liars 231, 319 life satisfaction, pay and 68 limited focus of change 525 line manager relationships 99 listening 321 literacy skills 498 living wage 200 LMX (leader–member exchange) theory 339–40, 350, 559 loafing, social see social loafing lobbying 351 loci of conflicts 400–1 locus of control, internal 379 logrolling 412 long-term orientation 102, 559 low-ability teams 282 low-context cultures 310, 320–1, 559 low-cost labour countries movement of jobs to 17 lower-order needs 149, 559 loyalty 70, 99, 559 LPC (least preferred co-worker) questionnaires 336, 559 lying 29, 422 M Machiavellianism 89, 91, 559 maintaining organizational cultures 467–71

management of changes see changes of conflicts, techniques 405–6, 555 data-driven 11 decisional roles 6, 7 of diversity see diversity effective 8–9, 377 by exception 343–4 functions 5 human resources (HRM) 8, 9 informational roles 6, 7 interpersonal roles 6, 7, 9 leadership and, differences between 332 of learning 536–7 by objectives (MBO) 159, 559 participative 189, 561 roles 6–8 skills 7–8 of stress 543–5 successful activities 8–9 traditional 9 of uncertainty of others 527 see also managers managers definition 5, 559 jobs 5–9 moods and 229–30, 230 work values 99 see also management manipulation 526, 548 masculinity 102, 560 Maslow’s hierarchy of needs 149–50, 170 mastery 160–1, 163 material symbols, organizational cultures 471, 472, 560 materialism 166 matrix structures 437–9, 560 Mayer–Salovey–Caruso Emotional Intelligence Test (MSCEIT) 232 MBO (management by objectives) 159, 559 MBTI (Myers-Briggs Type Indicator) 86–7, 106, 560 MBWA (management by walking around) 30 McClelland’s theory of needs 152–3, 170, 560 measuring job satisfaction 66–7 measuring personality 84–5 mechanistic model of organization structures 443, 560 media richness model 310 mediations 510 mediators 418, 560 medical tests 497 meetings 306 memory 44–5

580  Subject Index

men abilities 50–1 negotiations 416–17 women and, abilities 50–1 see also gender mental ability, decision-making 129–30 mental health problems 544 mental models, teams 286, 560 mentally challenging work 74 mentoring 350–1, 354 mentors 350–1, 560 mentorships 457 mergers 466, 478 merit-based pay 191, 192–3, 560 messages 302 characteristics 216 interest levels 315 prior knowledge 316 meta-analysis 166 metamorphosis stage of socialization 469, 470, 560 Michigan University leadership ­studies 334 microspecialization 431 mindfulness 220 minimum wage 200 misrepresentation 319, 382, 384 mockery 37 model of organizational behaviour 22–6 modelling, vicarious 160–1 models 22, 560 moderating variables 62–3 modular benefit plans 196 money 183 money-based work–life strategies 509 monitor roles 6, 7, 283 monitoring emails 312 employees 171–2 social media 322–3 see also self-monitoring moods 208–10 basic 212–14 implications for managers 230 injury at work 229 meaning 210–11, 560 negative 212–14 negotiations and 415–16 organizational behaviour ­applications 225–30 positive 212–14 safety at work 229 sources 215–18 moral blind spots 132 motivating potential scores (MPS) 181–2, 560 motivation 146–8, 178–80 bargaining 410 communications and 300–1 creativity and 135 definitions 148–9, 560

emotions and 227 employability and 162 employee involvement 188–90 environment 162 goals and 148–9 implications for managers 169–70, 198 inspirational 343–4 intrinsic 190 by job design 180–8 managers’ perceptions of ­employees 155 moods and 227 pay and 190–5 rewards and 190–7 theories of 149–69, 189–90 motivation–hygiene theory (two-­factor theory) 151–2, 169, 190, 564 movement, change management 528, 530, 560 movie making 439 MPS (motivating potential scores) 181–2, 560 MSCEIT (Mayer–Salovey–Caruso Emotional Intelligence Test) 232 multicultural identity 123 multicultural teams 280 multinational organizations leadership in 350 multiple evaluators 505–6 multiteam systems 278, 281, 560 mutuality 457 Myers-Briggs Type Indicator (MBTI) 86–7, 106, 560 N nAch (needs for achievement) see needs nAff (needs for affiliation) 152, 560 narcissism 89, 91, 347, 560 national cultures 21 national differences, diversity 284 nationality, selection and 492 natural work units 183–4 nature, access to 154 needs for achievement (nAch) 152–3, 169, 190, 560 for affiliation (nAff) 152, 560 followers, sensitivity to 341 implications for managers 169–70 Maslow’s hierarchy of 149–50, 170 McClelland’s theory of 152–3, 170, 560 for power (nPow) 152, 379, 560 training, identification 501 negative affects 212–14, 560 negative behaviour 499 negative effects of power 375 negative emotions 229 negative events 220

negative leniency 505 negative moods 213–14 neglect 70, 560 negotiations 398, 409–10, 560 bargaining strategies 410–13 complexities 423–4 cultures and 416 effectiveness, individual differences in 414–17 emotions and 227–8, 416–17 employability and 414 ethical dilemma 422 gender differences 416–17 goals 413 implications for managers 420 individuals 412 moods and 415–16 personality traits 415 power and 411 process 413–14 resistance points 410–11 role play 421–2 target points 410–11 teams 412 third-party 418–19 negotiator roles 6, 7 nepotism 479 networked organizations 19 networking 8, 9, 307, 468, 527 networks formal small-group 304 ties 351 neuroticism 87, 96, 223, 225, 403, 541 neutralizers of leadership 352–3, 560 noise 302, 402 nominal group technique 262, 560 nonsubstitutability 372 nonverbal communications 309–10, 314, 323–4 normative commitments 64, 560 norming 241, 245, 560 norms 249, 560 appearance 249 conformity 250–1 cultural, differing 17–8 deviant workplace behaviour 250–1 groups 249–52, 263 Hawthorne studies 249–50 performance 249, 255 regulatory, differing 17–8 resource allocation 249 social arrangement 249 status and 252–3 North America managers’ perception of employee motivation 155 nPow (needs for power) 152, 379, 560 number aptitudes 44–5 numeracy skills 498

Subject Index  581

O OB see organizational behaviour obesity 42 objectives management by (MBO) 159, 559 setting, participation in 158 see also goals OCB see organizational citizenship behaviour occupation 99 occupational commitment 65 OCP (Organizational Culture Profile) 107 OD (organizational development) 530–3, 561 off-the-job training 500 offence 423 office-less companies 441 Ohio State leadership studies 334, 338, 343 older workers 38–9, 40 on-site child care 509, 510 on-the-job training 500 onboarding procedures 469 online job applications 492 online leadership 353 online retailers 11 online selection tests 494 open-mindedness 477 openness to experience 88–9, 96, 101, 135, 282, 333, 560 at work 537 opportunism 349 opportunities for organizational behaviour 14–22 opposition, conflicts 401–3 optimizing 124 options 125 oral communications 305–6, 318–19 organic model of organization ­structures 443, 560 organization structures 428–30 boundaryless organizations 439, 440–1, 555 bureaucracies 436–7, 438–9, 555 centralization 430, 434–5, 447, 555 chain of command 430, 432–3, 555 changes 453 decentralization 430, 434–5 definition 430, 561 departmentalization 430, 431–2, 556 designs see organizational designs differing, reasons for 443–6 downsizing 441–2 environments 445–6 ethical dilemmas 451–2 formalization 430, 435, 461, 557 implications for managers 449 lean organizations 441–2

matrix structures 437–9, 560 mechanistic model 443, 560 organic model 443, 560 redesigning 536 sizes 444–5 span of control 430, 433–4, 447, 563 simple structures 435–6, 563 strategies and 444 technology 445, 564 virtual organizations 439–40, 564 work specialization 430–1, 447, 564 organizational behaviour (OB) 2–4 challenges for 14–22 complementing intuition with systematic study 9–12 definition 9, 560 disciplines contributing to 12–13 employability and 5 few absolutes in 13–14 implications for managers 26 interpersonal skills 4–5 managers’ jobs 5–9 model 22–6 opportunities for 14–22 organizational citizenship behaviour (OCB) emotions and 220, 224 job satisfaction and 71 leadership and 347 motivation and 150 perceived organizational support and 65 organizational climate 136, 462–3, 560 organizational commitments 64–5, 66, 560 organizational communications 304–5 Organizational Culture Profile (OCP) 107 organizational cultures 456–8 as assets 464–5 changes of 480 climate creation 462–3 creation of 466–71 definition 458–9, 561 dominant 460, 556 employability and 468 ethical dimensions 463–4, 478–9 ethics 473–4, 481–2 formalization versus 461 formation 471 functions 461–2 global implications 478–9 implications for managers 479–80 innovation and 464 innovative organizations 534–5 language 472 as liabilities 461, 465 maintaining 467–71 material symbols 471, 472, 560 meaning 458–61

positive 474–6, 561 reshaping 536–7 rituals 471, 472, 562 roles 461–2 spirituality and 476–7 stories 471 strong see strong cultures subcultures 460, 563 organizational decision-making see decision-making organizational demography 284–5, 561 organizational designs boundaryless organizations 439, 440–1, 555 bureaucracies 436–7, 438–9, 555 employee behaviour and 446–8 matrix structures 437–9, 560 simple structures 435–6 virtual organizations 439–40, 564 organizational development (OD) 530–3, 561 organizational display rules 230–1 organizational factors political behaviour 380–81 stress 539–40 organizational goals 149 organizational justice 163–6, 169, 442, 561 organizational politics see politics organizational resistance to change sources 525 organizational structures see ­organization structures organizational support, perceived (POS) 65, 66, 561 organizational survival 25–6, 561 organizations, definition 5, 560 organizers 86 organizing 6, 561 others distorting perceptions of 164 judgements see judgements uncertainty of 527 outcome–input ratios 165 outcomes 23, 561 accountability for 374, 379 conflicts 401, 402, 406–9 creativity 136 dysfunctional 407–8 functional 406–7 individual tasks 501 jobs 163–4 orientation, organizational cultures and 458 politicking and 381 outsiders, conflicts and 406 outsourcing 439 overconfidence bias 125, 126, 129 overconfident decision-making 375 overconforming 382 overt resistance to change 524

582  Subject Index

P part-time work 510 participation in decision-making 158 downsizing 442 employees 198 goal setting 159 in management 189 in objective setting 158 organizational development 531 overcoming resistance to change 526 representative 189, 562 participative decision-making 440 participative leaders 338, 339 participative management 189, 561 passive management by exception 343–4 path-goal theory of leadership 338–9, 561 pay attitudes and 76–7 bonuses 191, 193, 555 competency-based 194 employee stock ownership plans (ESOP) 191, 194–5, 557 executive 190 gainsharing 191, 194, 558 job satisfaction and 69, 76–7 knowledge-based 194 life satisfaction and 68 living wage 200 merit-based 191, 192–3, 560 minimum wage 200 motivation and 190–5 negotiations 410 piece rates 191, 192, 195, 561 profit-sharing 191, 194, 195, 562 skill-based 194, 563 structures 190–1 variable-pay programmes 191–6, 564 work values 99 see also rewards PC (process consultation) 532, 562 peer coaches 469 people effects of power on 374–5 orientation 355, 458 skills 9, 19 see also employees perceived conflicts 403, 561 perceived organizational support (POS) 65, 66, 561 perceivers 116–17 perceiving types 86 perceptions 114 definition 116, 561 factors influencing 116–17 of fairness 164–5

implications for managers 136–7 individual decision-making and, link between 122 judgements about others attributions 117–20 shortcuts 120–2 roles 246, 562 selective 120, 126, 317, 562 stress and 541 perceptual speed 44–5 performance appraisals see evaluations below behaviour constituting 501 effort–performance relationships 167, 169 evaluations 500–1 360-degree 503 behaviourally anchored rating scales (BARS) 505, 554 behaviours 502 critical incidents 504, 556 decision-making 130 due process, providing employees with 506 elimination of 513–14 evaluators 502–4, 505–6 experiential exercise 512 feedback 504 forced comparisons 505, 557 graphic rating scales 505, 558 group order ranking 505, 558 implications for managers 510–11 impression management and 385 improving, suggestions for 505–6 individual ranking 505, 558 individual task outcomes 501 international variations 507 judgements 122 methods 504–6 multiple evaluators 505–6 politics and 380, 384–5 purposes 501 selective 506 self-evaluations 503 teams 279, 281 training evaluators 506 traits 502 written essays 504 evaluator training 506 expectations, judgements 122 feedback on 501, 506–7, 512 groups 263 job satisfaction and 70–1 norms 249, 255 orientation 105 poor, dismissal for 513 reduced 381 rewards, linking to 198 relationships 167, 169

simulation tests 495 stress and 542–3 subjective criteria 380 substandard 510 tasks 23, 501, 563 teams 279, 281, 283–4 units, conflicts and 419 performing 241, 245, 561 perpetual changes 533 persistence 149 persistent statistics 11 person–job fit 100 person–organization fit 100–1 personal appeals 372–4 personal characteristics 252 personal contacts, favouring 479 personal factors, stress 539, 540–1 personal growth 99 personal power 370 personal privacy 451–2 personal relationships 540 personal resilience 527 personal risks 341 personal variables, conflicts 403 personality 82–4, 161, 215 Big Five model see Big Five personality model cheating 107 conflicts and 403 cultures and 101 decision-making and 129 definition 84, 561 determinants 85–6 global 101 implications for managers 105–6 job satisfaction and 69 judging 94 leaders 332 measuring 84–5 Myers-Briggs Type Indicator see Myers-Briggs Type Indicator persuasive communication 316 proactive 89, 93–4, 468, 561 selection tests 494 situations and 94–6 stress and 541 team members 279, 282 tests 494 traits 86–94, 451, 561 behaviour and 106 negotiations 415 political behaviour and 379 Type A 89, 93, 542, 564 Type B 93 workplaces, linking to 100–1 personality–job fit theory 100, 561 personalization, conflicts 401, 402, 403 personbyte 279 perspective taking 135–6 persuasion 160, 161, 372–4

Subject Index  583

persuasive communication 315–16 physical abilities 45–6, 561 physical context of work 188 physical distance, communications and 310 physical exercise 543–4 physiological needs 149–50 physiological symptoms of stress 539, 542 piece rates 191, 192, 195, 561 planned changes 523–4, 561 planning 561 functions 5 negotiations 413–14 plant team roles 283 plants 154 playing dumb 382 playing safe 382 polarization, groups 261 policies and practices, human resources see human resources politicking 378, 379–81 politics 366–8 behaviour 375–7, 561 causes and consequences 378–85 ethics 385, 387–8 career mapping 385–7 of change 527–8 employability and 380 implication for managers 387 impression management (IM) 382–5, 387–8, 496, 558 organizational definition 375–6 responses to 381–2 power in action 375–8 reality of 376–8 skills 374, 375, 561 uncertainties 539 world, forces for change 522–3 see also power poor performance, dismissal for 513 popularity 274, 334 POS (perceived organizational support) 65, 66, 561 position power 337, 561 positive affects 212–14, 561 positive effects of power 375 positive expectations 348 positive leniency 505 positive moods 213–14 positive organizational cultures 474–6, 561 positive organizational scholarship 20, 561 positive thinking 162 positive work environments 20 positiveness 346 positivity offsets 213, 561 potential, creative 134–5

potential opposition, conflicts 401–3 potential stressors 541 power 366–8 abuse of 375 bases of 369–71 coercive 369, 371, 555 corrosive effects 375 corruption and 374–5, 385 definition 368, 561 dependency 368, 371–2 dynamics 388–9 equalization, organizational development 531 expert 370, 557 formal 369–72, 371 implication for managers 387 leadership and, contrasting 368–9 legitimate 369–70, 371, 379, 559 needs for (nPow) 152, 379, 560 negative effects 375 negotiations and 411 people, effects on 374–5 personal 370 position 337, 561 positive effects 375 referent 371, 562 relationships, threats to, resistance to change source 525 reward 369, 371, 562 status and 252 tactics 372–4, 561 toxic effects 375 see also empowerment; politics power distance 101–2, 105, 345, 561 PowerPoint 306 prearrival stage of socialization 469, 561 precedents, historical 131 preconceived notions 10 predictive statistics 11 pre-employment drug tests 496–7 preferences risks 128 of team members 279, 284 pressures power tactics 372–4 social 62 prevention of change 382 focus 158, 561 pride 29–30 primary traits 106 prior knowledge of messages 316 prison experiment 248 privacy emails and 312–13 personal 451–2 proactive personality 89, 93–4, 468, 561 proactiveness 346

problems 122, 561 cultural differences 130 economic 540 formulation 133–4, 562 solving appreciative inquiry versus 533 conflicts 406 creative, change implementation 529 intergroup development 532 negotiations 413, 414 skills 281, 499 teams 276, 277, 562 procedural justice 165, 166, 345, 562 process, conflicts of 401–9, 555 process conflicts 399–400, 562 process consultation (PC) 532, 562 process departmentalization 432 process variables, teams 279, 280, 284–7 processes 23, 562 production oriented leaders 334–5, 562 productivity 24, 25, 562 age and 39 conflicts and 407 happiness and 69 mistrust reducing 350 performance norms and 255 tenure and 42–3 trust and 350 work specialization and 431, 447 products, departmentalization by 432 professional groups, work values 99 professionalism 313 profit-sharing 191, 194, 195, 562 profits maximization 478–9 spirituality and 477 progression 99 projects 429 promotion 380, 384, 386 focus 158, 562 propensity for trust 349 properties, groups 246–57 prosperity 99 protective mechanisms 473 psychological contracts 247, 562 psychological empowerment 64, 562 psychological symptoms of stress 539, 542 psychology 12–13, 215, 562 psychosocial functions, mentoring 351 punctuated-equilibrium model 245–6, 562 punishment, organizational cultures and 475 purpose, sense of 477 Pygmalion effect 122, 161

584  Subject Index

Q quality 457 R race 41, 284, 492 random events 125 random socialization 470 randomness error 128, 562 rank 440 ranking group order 275, 505, 558 individual 505, 558 Rokeach Value Survey 98 rating scales, graphic 505, 558 rational, definition 124, 562 rational decision-making 124, 562 rational persuasion 372–4 rationality 124–5, 130, 210, 214, 476, 555 reactiveness 536 readiness 338 realistic personality type 100 reasoning 44–5 rebranding 140 receivers 302 recommendation, letters of 493, 496 recruitment see selection redesign jobs 182–5, 545 organization structures 536 reduced performance 381 reference groups 251, 562 references, selection 493, 494 referent power 371, 562 reflected best-self 20 reflexivity 286, 562 refreezing, change management 528–9, 530, 562 regulations 131 regulatory norms, differing 17–8 reinforcement behaviour, influence on 162 of changes 530 theory 161–2, 169, 562 relational job design 184–5 relationship-oriented leadership 336–8, 353 relationships bargaining 410 client 183–4 conflicts 286–7, 399–400, 562 effort–performance 167, 169 family 540 performance–reward 167, 169 personal 540 power 525 rewards–personal goals 167, 169 relaxation techniques 543–4 religion 43 representative participation 189, 562

research teams 285 resilience, personal 527 resistance points, negotiations 410–11 resistance to changes 524–8 resolution of conflicts, techniques 406 resources 562 allocations 249, 525 allocators 6, 7 conflicts 377 expansion 406 investigators team roles 283 reductions in 379–80 stress and 538 teams 280 respect 321, 477, 531 responsibilities 257, 457, 494 restraining forces 528–9, 562 restructuring, conflicts and 406 retailers, online 11 retention of diverse employees 46–8 return on investment (ROI) 313 reverse internships 457 reward power 369, 371, 562 rewards contingent 343–4 decision-making 130–1 of dissonance 62 employee recognition programmes 196–7 equitable 74 equity 198 ethical acts 473 extrinsic 154–5 intrinsic 196–7 motivation and 190–7 organizational cultures and 475 performance, linking to 198 performance evaluation as basis for 501 performance–reward relationships 167, 169 teams 279, 281, 288–9 win/lose approach to allocations 381 zero-sum approach to allocations 381 see also benefits; pay rewards–personal goals relationships 167, 169 rights 131–2 rightsizing 442 risks aversion 128, 562 personal 341 preference 128 taking 89, 92–3, 135 change implementation 529 organizational cultures and 458 trust and 349

rituals, organizational cultures 471, 472, 562 ROI (return on investment) 313 Rokeach Value Survey (RVS) 98 roles 246, 562 ambiguity 380 conflicts 247–8, 562 demands 540 expectations 246–7, 562 groups 246–8 management 6–8 models 473 organizational cultures 461–2 perceptions 246, 562 stress and 544, 545 teams 282, 283 romances, workplace 232 rotation, jobs 182, 559 routineness, degrees of 445 rules 131 rules ethical climates 463–4 rumination 129 rumours 305 RVS (Rokeach Value Survey) 98 S safe, playing 382 safety needs 149–50 at work 229 salaries see pay sales groups, work values 99 satisfaction customers 71–2 employees, organizational cultures impact on 479 groups and 263 jobs see jobs life, pay and 68 satisficing 124 scapegoating 382 scarcity 372 schadenfreude 242 scholarship, positive organizational 20, 561 scientific ideas 279 secondary traits 106 secrecy 457 security of information 314 resistance to change source 525 selection application forms 491–2 background checks 493–4 contingent 491, 496–7 of diverse employees 46–8 emotional intelligence and 226 ethical dilemma 512–13 fairness 492 implications for managers 510

Subject Index  585

initial 491–4 interviews 495–6 leaders 353–4 letters of recommendation 493, 496 organizational cultures and 467 people who accept changes 527 process 490–1 references 493, 494 social media and 511 stress and 544 substantive 491, 494–6 team members 287 testing 494–5 selective information gathering 126 selective information processing 525 selective perceptions 120, 126, 317, 562 selective performance evaluations 506 self, distorting perceptions of 163 self-actualization needs 149–50, 558 self-assurance 162 self-concordance 155, 562 self-confidence 135, 162, 341 self-determination theory 154–6, 562 self-efficacy theory 159–62, 562 self-esteem 129, 342 self-evaluations 69, 89, 90–1, 503 self-fulfilling prophecies 122, 563 self-generated feedback 157 self-interested decision-making 375 self-managed teams see teams self-monitoring 89, 92, 379, 383, 403, 563 self-monitors 354 self-motivation 162 self-promotion 383, 384 self-protection 382 self-serving bias 119–20, 129, 563 semantics, communication barriers and 320 senders 302 seniority 42–3 sensing types 86 sensitivity 341 training 531, 563 serial socialization 470 servant leadership 347, 357–8, 563 sex discrimination 40–1 sexual harassment 37 sexuality, selection and 492 shaper team roles 283 shared meaning 458, 459, 462 sharing gainsharing 191, 194, 558 information, bargaining 410 jobs 186, 509, 510, 559 profit-sharing 191, 194, 195, 562 shirking see social loafing short-term orientation 102, 563 short-term wins 529 sickness absence 39, 72 significance, tasks 180–1, 563

silence 318 similarity 243 errors 505 simpatía 155 simple environments 446 simple structures 435–6, 563 simulation tests, performance 495 single-loop learning 536, 563 situation-strength theory 94, 563 situational-analysis skills 354 Situational Judgment Test of Emotional Intelligence (SJT of EI) 232 situational judgement tests 232, 495 situational leadership theory (SLT) 338, 563 situations charismatic leadership and 342 leaders and, matching 337–8 perceptions and 116–17 personality and 94–6 strength 94–5 sizes conflicts, stimulating 402 groups 253–4 organization structures 444–5 teams 279, 284 SJT of EI (Situational Judgment Test of Emotional Intelligence) 232 skill-based pay 194, 563 skills change management 527 conceptual 7–8, 555 creative-thinking 133 human 7, 9, 558 implementation 354 interpersonal see interpersonal skills literacy 498 management 7–8 mentoring 354 numeracy 498 people 9, 19 political 374, 375, 561 problem-solving 281, 499 situational-analysis 354 soft 136 teams 281 technical see technical skills trust building 354 variety 180–1, 563 sleep 217 SLT (situational leadership theory) 338, 563 small and medium-sized enterprises (SME) leadership in 335 smoothing conflicts 406 snooping 481–2 sociable climbing 292–3 social activities 217 social arrangement norms 249

social behaviour in workplaces 499 social capital 468 social cognitive theory 159–61 social context of work 188 social identity theory 242–3, 563 social interactions 188 social loafing 254, 261, 266, 279, 287, 563 social media 307–8, 313, 314, 322–3, 511 social needs 149–50 social networking 307 social personality type 100 social pressures 62 social psychology 12, 13, 563 social support 188, 541, 544 social system, cultures enhancing stability of 462 social trends, forces for change 522–3 socialization 468–71, 563 socialized charismatic leadership 347, 563 sociology 12, 13, 563 soft skills 136 solutions, group acceptance and 257 spaghetti organization 429 span of control 430, 433–4, 447, 563 spatial visualization 44–5 specialist team roles 283 specialization conflicts, stimulating 402 work 447 specific goals 156–7, 158 speed groups and 257–8 perceptual 44–5 spirituality, organizational cultures and 476–7 spokesperson roles 6, 7 sports 289, 291 stability 458 emotional see emotional stability stagnation 420 stalling 382 stamina 46 standardization 436–7 startup firms 464 static environments 445 static strength 46 statistics 11 status boundaryless organizations 440 characteristics theory 252, 563 groups 243, 252–3, 263 inequity 253 norms and 252–3 status quo 528–9 stereotypes 36–7, 321 European 117 stereotyping 119, 121, 563

586  Subject Index

stigmatization 253 stimulation of conflicts 402, 406 intellectual 343–4 stock analysts 167–8 stories, organizational cultures 471 storming 241, 244, 563 strategic alliances 441 strategies changes and 547 diversity management 46–9 innovation 444, 559 learning organizations 536 organization structures and 444 strengths employees’, building on 474–5 factors 46 situations 94–5 stress 23, 522, 537 additive nature 541 behavioural symptoms 539, 542–3 consequences 542–3 cultural differences 542 definition 537–8, 563 emotions and 217 environmental factors 539 experienced 541 implications for managers 546 individual differences 539, 541 jobs 381 management 543–5 meaning 537–8 moods and 217 organizational changes and 537 organizational factors 539–40 performance and 542–3 personal factors 539, 540–1 personality and 541 physiological symptoms 539, 542 potential sources 539–41 psychological symptoms 539, 542 reactions 442 roles 545 training and 544 stretch goals 159 stretching 382 strong cultures 563 as barriers to diversity 466 versus weak cultures 460–1 strong leadership 462 strong organizational cultures see strong cultures structural inertia, resistance to change source 525 structural variables 406, 534 structure conflicts 402–3 employability and 446 tasks 337, 563

teams 279, 280–1 see also organization structures structured interviews 496 students 119 subcultures, organizational 460, 563 substandard performance 510 substantive evidence 10 substantive selection 491, 494–6 substitutes 352–3, 372, 563 success activities 8–9 leadership 358–9 teams 280–1 successful managers 8–9 superordinate goals 406 supervision, abusive 499 suppliers, Third World 476 support building, overcoming resistance to change 526 organizational development 531 perceived organizational (POS) 65, 66, 561 social 188, 541, 544 supportive colleagues 74 supportive leaders 338–9 supportive working conditions 74 surface acting 220, 224–5, 563 surface-level diversity 36–7, 563 surgical teams 281 surveillance 481–2 employees 201–2 surveys employees by managers 73 feedback 531, 563 survival 25–6 syllogisms, false 130 symbols, material, organizational cultures 471, 472, 560 system-imposed time constraints 131 systematic study 9–12, 563 T T-groups 531 tactics 372–4 taking risks see risks target points, negotiations 410–11 targets of perceptions 116–17 task-oriented leadership 336–8, 355, 353 tasks combining 183–4 conflicts 286, 399–400, 563 demands 539–40 groups 246 identity 180–1, 563 outcomes, individual 501 performance 23, 501, 563 significance 180–1, 563 structures 337, 563

TAT (trait activation theory) 95–6, 564 Taylorist form of organization 448 team-focused transformational leadership 345 teams 272–4 abilities of members 279, 281–2 autonomous 275 bargaining 412 building 354, 532, 563 common plan and purpose 279, 285–6 composition 279, 280, 281–4 conflicts 276, 279, 286–7 context 280–1 creativity 135–6 cross-functional 276, 277, 556 cross-hierarchical 440 cultures and 218 demographic attributes 283–4 diversity 135–6, 279, 283–4 effectiveness 278–87 efficacy 279, 286 emotions and 218 employability and 288 empowerment 290 ethical dilemmas 291–2 faultlines 256–7 global virtual 255 goals 279, 286 groups and, differences between 274–5 ‘hot’ members 285 implications for managers 289–90 individuals and 287–9 leadership 279, 280–1, 282, 284 mental models 286, 560 multicultural 280 negotiations 412 orientation, organizational cultures and 458 performance 279, 281, 283–4 personality of members 279, 282 popularity 274 preferences of members 279, 284 problem-solving 276, 277, 562 process variables 279, 280, 284–7 resources adequacy 280 reward systems 279, 281, 288–9 roles 282–3 selection 287 self-managed 275, 276–7, 503, 563 self-managing 263 size 279, 284 skills 281 social loafing 279, 287 structure 279, 280–1 success factors 280–1 training 287 trust 279, 280, 281 unethical behaviour 291–2

Subject Index  587

virtual 255, 276, 277–8, 564 virtual organizations 440 teamwork 457 teamworker team roles 283 technical skills 7, 281, 287, 498, 563 technological changes 539 technology 564 forces for change 522–3 organization structures 445 TEIQue (Trait Emotional Intelligence Questionnaire) 223, 232 telecommuting 19 telephone 306 teleworking 187–8, 198–9, 503, 564 temporary groups with deadlines 245–6 tenure, employment 42–3 terminal values 98, 564 terminations 510 territory, departmentalization by 432 testing emotional 223 emotional intelligence 232–3 IQ tests 44, 52–3 selection 494–5 situational judgement tests 232, 495 text messaging (TM) 307, 313 Theory X 150–1, 189, 564 Theory Y 150–1, 189, 564 thinking types 86 third cultures 321 third-party negotiations 418–19 Third World suppliers 476 three-stage model of creativity 133, 564 three-step model of change management 528–9 time-based work–life strategies 509 time constraints, system-imposed 131 time management 543 time of day, moods and 216–17 time periods, management by ­objectives 159 TM (text messaging) 307, 313 tolerance 98 tone differences, communication ­barriers and 320 top management, organizational cultures and 468 toxic effects of power 375 trade union members 98 traditional form of organization 448 traditional management 9 traditional view of conflicts 398, 564 Trait Emotional Intelligence ­Questionnaire (TEIQue) 223, 232 training 497 bankers 108–9 behavioural 354 civility 499

diversity 48 effectiveness evaluation 500 in ethics 472–3, 499 formal 499 implications for managers 510–11 informal 499–500 interpersonal skills 498–9 interviewers 496 leaders 354 literacy skills 498 methods 499–500 needs identification 501 numeracy skills 498 off-the-job 500 on-the-job 500 performance evaluators 506 problem-solving skills 499 sensitivity 531, 563 stress and 544 teams 287 technical skills 498 types 497–9 traits activation theory (TAT) 95–6, 564 performance evaluations 502 personality see personality theories of leadership 332–4, 335, 564 transactional leaders 343–4, 564 transactional leadership 344–5 transformational leaders 343–4, 564 transformational leadership 343–6, 354 transparency 457 trolling 308 trunk strength 46 trust 29–30 building 354, 527 consequences of 349–50 definition 348, 564 identification-based 353, 558 leadership and 348–50 organizational development 531 politics and 380 propensity 349 risk taking and 349 spirituality and 477 teams 279, 280, 281 work values 99 trustworthiness 346 turnover 24 job satisfaction and 72 organizational politics and 381 stress and 541 strong cultures and 461 tenure and 43 twins 85 two-factor theory 151–2, 169, 190, 564 Type A personality 89, 93, 542, 564 Type B personality 93

U UMA (usemyability) 162 uncertainties avoidance 102, 105, 564 economic 539 environments 445 management 527 political 539 reduction 243 unconventional behaviour 341, 342 Undercover Boss 30 unethical acts, punishing 473 unethical behaviour, teams 291–2 unfair discrimination 37–8 unfreezing status quo 528–9, 530, 564 union members 98 unit performance, conflicts and 419 unity of command 432, 564 University of Michigan leadership studies 334 unknown, fear of 525 unstructured interviews 496 upward communications 303 upward influence 373 urgency, change implementation 529 usemyability (UMA) 162 utilitarianism 131–2, 564 V validity, face 495 values 82–4, 96–7, 564 charismatic leaders 342 conflicts and 403 contemporary work cohorts 98–9 core 460, 556 cultures and 101–5 employability and 97 generational 99 global implications 101–5 implications for managers 105–6 importance 97 instrumental 98, 559 Rokeach Value Survey (RVS) 98 systems 97, 564 terminal 98, 564 workplaces, linking to 100–1 variable-pay programmes 191–6, 564 variable socialization 470 variables dependent 23 human, altering 406 independent 20 moderating 62–3 personal, conflicts 403 process see process variables structural 406, 534 variety, skills 180–1, 563 verbal communications 305, 309–10 verbal comprehension 44–5 verbal persuasion 160–1

588  Subject Index

vertical expansion, jobs 183 vested interests 120 vicarious modelling 160–1 videoconferencing 306 violence 398 virtual offices 187 virtual organizations 439–40, 564 virtual teams 255, 276, 277–8, 564 visible role models 473 vision, 564 charismatic leadership 341, 342 leadership 346 new, change implementation 529 statements 342, 564 transformational leadership 345 visionaries 86 visualization, spatial 44–5 vitality, emphasizing 474, 475 Vocational Preference Inventory questionnaire 100 voice 70, 564 volatility 445–6 voluntary sector employees 97 Vroom and Yetton’s leader-participation model 339, 559 Vroom’s expectancy theory 167–8, 170, 557 W wages see pay weak versus strong organizational cultures 460–1 wearables at work 201–2 weather, moods and 217 web logs 308 well-being at work 19–20 wellness programmes 545, 564 wheel networks 304

whistle-blowers 131, 564 win/lose approach to reward allocations 381 withdrawal behaviour 24, 564 employees see deviant workplace behaviours women abilities 50–1 on boards of directors 52 games industry 139–40 men and, abilities 50–1 negotiations 416–17 see also gender word connotations 320 work environments, positive 20 groups 274–5, 564 see also groups hard 98 injury at 229 mentally challenging 74 physical context 188 safety at 229 sample tests 495, 564 social context 188 specialization 430–1, 447, 564 stress see stress systems, high-performance (HPWS) 508 teams 274–5, 564 see also teams values, contemporary 98–9 work–life conflicts 20, 317, 508–10 work–life initiatives 509 workaholics 541 workforces diversity 18, 28, 36, 564

nature, forces for change 522–3 size reductions 442 working conditions, supportive 74 working mothers 40 working relationships 99 workplaces cyberbullying 172–3 deskless 451–2 deviance see deviant workplace behaviours diversity 38 impact of job satisfaction 70–3 incivility 251 personality, linking to 100–1 romances 232 social behaviour in 499 spirituality 476–7, 564 values, linking to 100–1 works councils 189 world politics forces for change 522–3 World Values Survey 98 worst business decisions 140 written communications 306–9, 311–14 written essays, performance evaluations 504 written selection tests 494–5 X X, Theory 150–1, 189, 564 Y Y, Theory 150–1, 189, 564 Z zero-sum approach to reward allocations 381 zero-sum games 410

Organization index Numeric 3 Step IT 77 3M 440, 476, 480 20th Century Fox 439

Booking.com 503 BP 193, 533 British Airways 140, 259, 478 British Telecom 187

A AA 187 Acas (Advisory, Conciliation and Arbitration Service) 173, 418 Accenture 140, 511 Accurate Biometrics 172 Adidas 16 Admiral 4, 73, 476 Adobe 354 Advisory, Conciliation and Arbitration Service (Acas) 173 AirAsia 478 Airbus 221, 301, 423, 431, 440 Alexion Pharmaceuticals 464 Amazon 11, 284, 357, 431, 472 Andersen Consulting 140 Apple 4, 5, 115, 314, 342, 441, 444, 514, 548 Aqua Shard 273 A.T. Kearney 466 Atomico 85 Attitude is Altitude 35 Auglaize Provico 474–5 Austrian Airlines 193 Automattic Inc 441 Automobile Association 187

C Cadbury 489 Campbell Soup 346 Capital One 4, 179 Carrefour 444 Caterpillar 444 Ceridian 195 CF Industries 246 Chartered Institute of Personnel and Development (CIPD) 308, 309, 399 Chevron 193 ChildNet 464–5 Chipotle 358 Chrysler 466 CIPD see Chartered Institute of ­Personnel and Development Cisco 4, 77, 191, 277, 325, 476 Citigroup 196 Clear Channel Communications 469 Coca-Cola 140 ConocoPhillips 193 Consignia 140 ConSol 476 Currys 533 Cyber-Ark 389

B Badgeville 306 Bain & Co 47 Bank of America 171 Bank One 183 Barclays Bank 83, 108 Barings Bank 92 Beaverbrooks 476 Berkshire Hathaway 449 BHP Billiton 354 Bing 432, 433 Blackberry 522 Blockbuster 522 Blue Origin 357 BMW 14, 16, 277, 438, 440, 495 The Body Shop 476 Boeing 438, 441

D Daimler AG 445 Daimler-Benz 466 Dairygold Cooperative Society Ltd 276 Dell 522 Deloitte 293 Deutsche Bank 83, 108 Dish Network 465 Disney 462 Don Jagoda Associates 373 Dorchester Collection 65 Driver and Vehicle Licensing Agency (DVLA) 436 DuPont 524 DVLA (Driver and Vehicle Licensing Agency) 436

E EADS 423 easyJet 324 Echo Nest 464 Eco Safety Products 133 EDS 293 Elcoteq Communications 476 Ellen Tracy 522 EMC 4, 306 Enron 119, 140, 260, 342, 346 Enterprise Rent-A-Car 72 Entertainment Software Association 139 Erasmus 354 Ernst & Young 86 Etsy 47 European Aeronautic Defence and Space Company (EADS) 423 European Court of Human Rights 312–13 ExxonMobil 14 F Facebook 11, 87, 194, 307, 313, 322, 469, 511 Fast Retailing 301 Fédération Internationale de Football Association (FIFA) 367 Ferrari 29–30 Fiat Chrysler 524 FIFA (Fédération Internationale de Football Association) 367 FingerMill 115 Flickr 308 Forbes 464, 468 Ford 16, 186, 277, 471, 476 Futurice 179 G Galleon Group 346 Gallup 183 General Electric 158, 159, 440, 480 General Foods 274 General Motors 130–1, 277, 524 GitHub 352 Glassdoor 457 GlaxoSmithKline 444, 451, 503 Globoforce 514 Go Ape! 293

590  Organization Index

Go Fly 324–5 Goldman Sachs 83, 108–9, 190, 354 Google 3–4, 20, 47, 442, 451, 469, 483, 494, 503 Google1 308 Gore & Associates, Inc. see W.L. Gore & Associates, Inc. Gorky Automobile Factory 442 Grameen Bank 83–4 Great Place to Work 73, 77 Groupon 522 H Hallmark Cards 288 Harrods 461 Hartford Financial Services Group 185 Harvard University 107 Heineken 14 Hertz 471 Hewlett-Packard 30, 120, 444, 465, 481 Hilti 4, 482 HM Treasury 293 HMV 522 Hoa’s Tool Shop 134 Honda 16, 322 Honeywell International 450 HSBC 47, 435 Humber Rescue 162 Hyundai 467 I I-drive 267 IBM 102, 132, 140, 191, 277, 293, 438 IDS Financial Services 194 IKEA 467, 468 IMF (International Monetary Fund) 331 Imperial Chemical 193 Industrial and Commercial Bank of China 190 Infinity Capital 267 INSEAD 325, 354 Intel 317, 370 InterContinental Hotels Group 388 International Games Developers ­Association 139 International Monetary Fund (IMF) 331 International Paper 475 Interstate Batteries 476 Intuit 464 Ipsos Public Affairs 301 Iron Maiden 247 J Japan Airlines 358 JC Penney 354 JCB 503 Jive 309 John Lewis 72, 194 Johnson & Johnson 472

Joost 85 JPMorgan Chase 397 K Kalypso 441 Kavaliro Staffing Services 511 KeySpan 193 KFC 73 Kimberly-Clark 318, 494 Kimpton Hotels & Restaurants 472 King 139 Kone 466 KPMG 197 Kraft 489 L Lanxess 479 LaSalle Network 511 Le Monde 194 LEGO 62, 293, 521 Lenovo 442 LensCrafters 193 Lexus 72 LinkedIn 307, 325, 511 Living Wage Foundation 200 Liz Claiborne 522 Lloyds 466 L’Oréal 226, 287 Louis Vuitton 277 LoveMachine 439 Lucent Technologies 222 Luxottica 193 M Mannesmann 478 Manpower Business Solutions 311 Marks & Spencer 260, 444, 466, 480, 140 Marriott 197 Mars Inc. 457–9 Masterfoods 475 Matsushita 371 McDonald’s 39, 200, 371, 431, 498 McKinsey & Co 47 Medtronic 184 Mercedes 16 Merrill Lynch 276, 352 MGM 439 Microsoft 4, 59, 73, 139, 140, 179, 432, 433, 460, 467, 476, 513 Miller Brewing Co 498 Mind Candy 139 MIT (Massachusetts Institute of Technology) 209–10 Moleskine 444 Monday 140 Mondelez 489 Monster 76–7, 511 Moody’s 127 Motorola Mobility 442

N NASA 134, 259, 260 National Car Parks (NCP) 493 National Grid 544 National Health Service 539, 540 NEC Corporation 441 Nestlé 293, 440 NetApp 4, 73 New Look 194 Newman’s Own 439 NHS 539, 540 Nike 469 Nissan 342, 440 Nokia 14–16, 17, 293, 301, 303, 354, 465, 522, 533 Nordea 478 Northern Foods 498 NXP 86 O Oakley 193 Obiettivo Lavoro 191 Ohio State University 334 Olympus 376 Oracle 91, 187, 194, 313 Oticon 429–30, 480 Oxfam 318 Oxford Economics 134 P Pampers 483 Parmalat 29, 342 Pearle Vision 193 Peppercomm 306 PepsiCo 140 PGi 313 PhoneDog 307 Picasso, Pablo 263 Pinterest 308 Piscines Ideales 469 Pizza Hut 191 Planet Hollywood 522 PNC 511 Poker Channel 227 Polaroid 522 Porsche 127 PowerPoint 306 Prezi 306 PricewaterhouseCoopers 140 Procter & Gamble 159, 320, 371, 432, 434, 483 Profusion 201–2 Q Qualtrix 68 Quintiles 4 R Radclyffe Group 233 Ray-Ban 193

Organization Index   591

Red Hat 511 Reebok 371 Renault 91 Rescue Time 312 Ritz-Carlton Hotels 72 Rok 293 Rolling Stones 241–2 Rolls-Royce 14 Rovio Entertainment 336 Royal Bank of Scotland 356–7 Royal Mail 140, 480 Royal National Lifeboat Institution (RNLI) 293 S SAIC (Science Applications International Corporate) 511 Samsung 301, 407 SAP 301, 346 SAS Institute 4, 73, 509 Scania 243 Schillings 308 Schoenen Torfs 71 Science Applications International Corporate (SAIC) 511 Sears 25 Shell 193, 348 Siemens 86, 460, 499, 549 Singapore Airlines 182 Skype 85, 255, 341, 432, 433 SMA Solar Technology 434 Social Cast 308 Socialtext 308 Société Générale 92 Sodexo 511 Sony 139, 548

Sovereign Capital 223 SRI International R&D 115 Standard & Poor’s 127 Starbucks 230, 277, 476 Statoil 193 Strida 452 Summly 115 Sun Microsystems 306 Surface 432, 433 T Takeda Chemical Industries 192 TalentSmart 380 The Team Building Company 288 Telecom Italia 187 Tide 483 Times of India 476 Tommy Hilfiger 371 Torfs 4, 71, 172 Toshiba 474 Tour de France 291–2 Toyota 16, 277, 432, 442 TRANSCO 49 Translation 371 Trimit 115 TweetDeck 313 Twitter 307–8, 313, 322, 511 Tyco 346 U Ubisoft 462 Unilever 293 Unipart 86, 480, 503, 535 United Entertainment Group 472 University of Michigan 334 UPS 313–14

V Valve Corporation 352 Virgin Atlantic 72, 503 Virgin Group 20, 343, 467 Vodafone 478 Volkswagen 16, 277, 442–3, 480 Volvo 91, 274 W Wal-Mart 232, 472 Warner Brothers 439 We Are Social 300 Western Electric 69, 249–50 Wikis 308 Windows 432, 433 Wisbech Refsum 466 W.L. Gore & Associates, Inc. 73, 274, 352, 467, 534 Women in Games WIGJ 139 Woolworths 522 Workforce Management 464 Worldcom 342 X Xbox 432, 433 Xerox 123, 436, 441 Y Yahoo! 187, 466 YouTube 308 Z Zappos 451–2, 514 Zibrant 293 Zynga Inc. 115