Human Behavior in Organization (BME 12) Lecture Notes 2024 PDF

Kingfisher School of Business and Finance, Inc. BME 12: HUMAN BEHAVIOR IN ORGANIZATION Chapter 1: An Overview of Organizational Behavior (Narrative of Discussion) BME 12 Lecture Notes Version 1 Series of 2024 Book Reference: Organizational Behavi...

Kingfisher School of Business and Finance, Inc. BME 12: HUMAN BEHAVIOR IN ORGANIZATION Chapter 1: An Overview of Organizational Behavior (Narrative of Discussion) BME 12 Lecture Notes Version 1 Series of 2024 Book Reference: Organizational Behavior: Managing People and Organization Author: Ricky Griffin, Jean Phillips, Stanley Gully I. What Is Organizational Behavior? Organizational behavior (OB) is the study of: ∙ human behavior in organizational settings, ∙ the interface between human behavior and the organization, ∙ and the organization itself. OB helps explain and predict how people and groups interpret events, react, and behave in organizations and describes the role of organizational systems, structures, and process in shaping behavior The field of organizational behavior attempts to understand human behavior in organizational settings, the organization itself, and the individual organization interface As illustrated here, these areas are highly interrelated. Thus, although it is possible to focus on only one of these areas at a time, a complete understanding of organizational behavior requires knowledge of all three areas. Why do we study OB? The reasons why do we study OB is that it could help us to become a better person, become a better manager, understand how paper behave and why they do what they do, and help you focus on developing a global mindset. How do Organizational Behavior Impact Personal Success and Organizational Success? ∙ Personal Success The core of OB is being effective at work. Understanding how people behave in organizations and why they do what they do is critical to working effectively with and managing others. OB gives everyone the knowledge and tools they need to be effective at any organizational level. In our relationships with organizations, we may adopt any one of several roles or identities. we will adopt  a managerial perspective, the field attempts to describe the complex human context of organizations and to define the opportunities, problems, challenges, and issues associated with that realm. ∙ Organizational Success Organizations as a whole also benefit when managers understand OB. Imagine the difference between a company with motivated, engaged employees with clear goals aligned with the business strategy and one with unhappy employees, a lot of conflict, weak leadership, and a lack of direction. Effectively implementing OB concepts and models is what creates effective and successful companies. OB also helps companies perform well. In addition to financial performance and job satisfaction, OB also influences absenteeism and turnover. Reducing absenteeism and turnover can be worth millions of dollars to organizations through increased productivity and customer service and decreased staffing costs. Work Absenteeism- ongoing pattern of missing or skipping out on work without permission Employee Turnover- refers to the total number of workers who leave a company over a certain period of time II. The Managerial Context of Organizational Behavior A. 4 Basic Management Functions and Organizational Behavior 1. Planning is the process of determining an organization’s desired future position and the best means of getting there. Why do we study planning? ∙ For environmental analysis ∙ Deciding appropriate goals ∙ Developing tactics and strategies 2. Organizing is the process of designing jobs, grouping jobs into units, and establishing patterns of authority between jobs and units. Organizational Structure- refers to the way that lines of authority, responsibility, and communication are arranged in order to accomplish the work. 3. Leading is the process of getting the organization’s members to work together toward the organization’s goals. 4. Controlling is the process of monitoring and correcting the actions of the organization and its members to keep them directed toward their goals. 5. (Note: The discussion about environmental analysis is in separate narrative) Finance, Inc. Technical skills are the skills necessary to accomplish specific tasks within the organization. (ex. Proficiency in MS offices) BME 12 Lecture Notes Version 1 Series of 2024 B. Critical Management Skills and Organizational Behavior Interpersonal skills are the ability to effectively communicate with, understand, and motivate individuals and groups. Conceptual skills are the ability to think in the abstract. The ability to anticipate future events, think of possibilities on another options. Critical Thinking- allows you to understand the information in front of you, understand it, and process it. Diagnostic skills are the ability to understand cause-and-effect relationships and to recognize the optimal solutions  to problems. C. Organizational Behavior and Human Resource Management Human resource management (HRM) - is the set of organizational activities directed at attracting, developing, and maintaining an effective workforce. -Strategic approach to nurturing and supporting employees and ensuring a positive workplace environment. - include but is not limited to recruiting, hiring, training, compensating, retaining, motivating employees. III. Strategic Context of Organizational Behavior Competitive advantage is anything that gives a firm an edge over rivals in attracting customers and defending itself against competition. Sources of Competitive Advantage: ∙ Innovation ∙ Distribution ∙ Speed ∙ Convenience ∙ First to market ∙ Cost ∙ Service ∙ Quality There are many sources of competitive advantage including having the best-made or cheapest product, providing the best customer service, being more convenient to buy from, having shorter product development times, and having a well-known brand name. To have a competitive advantage a company must ultimately be able to give customers superior value for their money (a combination of quality, service, and acceptable price)—either a better product that is worth a premium price or a good product at a lower price can be a source of competitive advantage Financial Risk- the value of the product is not worth the price you paid for. Types of Business Strategies Three primary business strategies are: 1. Cost leadership 2. Differentiation 3. Specialization 1. Cost Leadership Strategy strives to be the lowest-cost producer for a particular level of product quality. (with a productive manpower, the cost to produce a single unit of product would be reduced through a lesser amount of salary expense accumulating in the direct labor in costing the product, that is involved in the production.) The company is constantly working on reducing the cost through operational excellence.  Operational excellence maximizes the efficiency of the manufacturing or product development process to minimize costs. 2. Differentiation Strategy develops a product or service that has unique characteristics valued by customers. It gives emphasis to product innovation. Product innovation is developing new products or services. Example: Apple Company- who differentiates its product by pricing them in higher than its competitors. 3. Specialization Strategy focuses on a narrow market segment or niche and pursues either a differentiation or cost leadership strategy within that market segment. (Niche- single product or a particular need of an end user.) This strategy can be successful if it results in either lower costs than competitors serving the same niche, or an ability to offer customers something other competitors do not. Customer intimacy is delivering unique and customizable products or services to meet customers’ needs and increase customer loyalty. 4. Growth strategy- is a Company expansion organically or through mergers and acquisitions. Response to investor preference for rising earnings. Success depends on company’s ability to find and retain the right number and types of employees to sustain growth. (Example: Jollibee acquiring Chowking, Mang Inasal, Red Ribbon, Greenwich, etc.) 5. Integrating business strategies and OB- Implementation and change require large-scale organizational changes ∙ New organizational culture ∙ New employee behaviors IV. Contextual Perspective of OB A. Where Does Organizational Behavior Came from? Formal study of OB began in the 1890s, following the industrial relations movement spawned by Adam Smith’s introduction of the division of labor. In the 1890s, Frank and Lillian Gilbreth and Frederick Winslow Taylor identified the positive effects of precise instructions, goal setting, and rewards on motivation. Their ideas became known as scientific management, and are often considered the beginning of the formal study of OB. Scientific management is based on the belief that productivity is maximized when organizations are rationalized with precise sets of instructions based on time-and-motion studies. The four principles of Taylor’s scientific management are: 1. Replace rule-of-thumb work methods with methods based on scientifically studying the tasks using time-and motion studies. 2. Scientifically select, train, and develop all workers rather than leaving them to passively train themselves. 3. Managers provide detailed instructions and supervision to workers to ensure that they are following the scientifically developed methods. 4. Divide work nearly equally between workers and managers. Managers should apply scientific management principles to planning the work, and workers should actually perform the tasks. Although scientific management improved productivity, it also increased the monotony of work.  After World War I, attention shifted to understanding the role of human factors and psychology in organizations. This interest was spawned by the discovery of the Hawthorne effect in the 1920s and 1930s. The Hawthorne effect occurs when people improve some aspect of their behavior or performance simply because they are being assessed. Rather than viewing workers as interchangeable parts in mechanical organizations as the scientific management movement had done, the human relations movement viewed organizations as cooperative systems and treated workers’ orientations, values, and feelings as important parts of organizational dynamics and performance. B. Contemporary Organizational Behavior Contextual Perspectives on Organizational Behavior ∙ Systems Perspective ∙ Situational Perspective ∙ Contingency ∙ Interactional A system is an interrelated set of elements that function as a whole. The framework for systems study consists of inputs, transformation, outputs, and feedback. An organizational system receives four kinds of input from its environment: material, human, financial, and informational. These inputs are combined and transformed and then returned to the environment in the form of products or services, profits or losses, employee behaviors, and additional information. Finally, the system receives feedback from the environment regarding these outputs. Organizational Behavior Finance, Inc. C. Situational Perspectives on Another useful viewpoint for understanding behavior in organizations comes from the situational perspective which suggest that in most organizations, situations and outcomes are influenced by other variables. Because of the complexities of human behavior and organizational settings, universal conclusions are impossible. In organizations, most situations and outcomes are contingent; that is, the precise relationship between any two variables is likely to be situational and dependent on other variables. There are distinct differences between universal and situational perspectives. The situational perspective -In most organizations, situations and outcomes are influenced by other variables The universal model -Presumes a direct cause-and-effect linkage between variables -Complexities of human behavior and organizational settings make universal conclusions virtually impossible  D. Interactionalism (People and Situation) -Focuses on how individuals and situations interact continuously to determine individuals’ behavior. -Attempts to explain how people select, interpret, and change various situations. Example: Managers perspective and attitude towards the employee trainees during training process should be light and gentle but hands-on so that trainee’s perspective would not be affected during the process. V. Managers for Effectiveness Essentially, managers and leaders generally try to direct the behaviors of people in their organizations in ways that promote organizational effectiveness. Managers’ goals: A. Enhance behaviors and attitudes Productivity- Narrow measure of efficiency: number of products or services created per unit of input Performance- Broader concept made up of all work-related behaviors Commitment- The degree to which an employee considers himself or herself a true member of the organization, overlooks minor sources of dissatisfaction, and intends to stay with the organization B. Promote citizenship Organizational citizenship is the behavior of individuals that makes a positive overall contribution to the organization. The determinant of organizational citizenship behaviors is likely to be a complex mosaic of individual, social, and organizational variables. Behavior of individuals that makes a positive overall contribution to the organization Encompasses all factors outside the strict requirements of the job Examples: ▪ Willingness to train new hires ▪ Works late/overtime ▪ Good attendance ▪ Represents the organization well ▪ Personal values consistent with the organization C. Minimize dysfunctional behaviors Dysfunctional behaviors – Behaviors that detract from, rather than contribute to, organizational performance – Examples ▪ Absenteeism ▪ Turnover ▪ Theft, sabotage ▪ Sexual and Racial Harassment ▪ Politicized behavior (spreading rumors, etc.) ▪ Incivility, rudeness ▪ Bullying and Workplace violence  D. Drive strategic execution Strategic execution -The degree to which managers and their employees understand and carry out the actions needed to achieve strategic goals -Assessed at the individual/group level, the organizational level, and in terms of financial performance -Often requires balancing seemingly contradictory outcomes Example: paying workers high salaries can enhance satisfaction and reduce turnover, but detracts from bottom line performance. know what we know? Finance, Inc. VI. Quality of information: How do we “Common” sense and intuition and are often wrong—examples where one thing doesn’t necessarily lead to the other ∙ Goals, confidence and performance ∙ Satisfaction and productivity ∙ Cohesion and performance ∙ Rewards and motivation OB relies on the Scientific Method- Method of knowledge generation that relies on systematic studies that identify and replicate a result using a variety of methods, samples, and settings 1. Intuition- the ability to understand something immediately, without a need of conscious reasoning. 2. The Scientific Method Rather than relying on experience or intuition, or just assuming that ideas are correct because they seem to make sense, the scientific method relies on systematic studies that identify and replicate a result using a variety of methods, samples, and settings. Sir Francis Bacon developed the scientific method in the 1600s. The scientific method begins with theory, which is a collection of verbal and symbolic assertions that specify how and why two or more variables are related, and the conditions under which they should and should not relate. The second step in the scientific method is the development of hypotheses, or written predictions specifying expected relationships between certain variables. Hypothesis testing can be done using a variety of research methods and statistical analyses. For our purposes, assume we collect data on our predictor, or independent variable, and our criterion, or dependent variable. Setting a specific, difficult, achievable goal is the independent variable, and the number of products assembled is our dependent variable. The scientific method is a useful approach to learning more about organizational behavior. Using theory to develop hypotheses and then collecting and studying relevant data can help generate new knowledge. Kingfisher School of Business and Finance, Inc.BME 12 Lecture Notes Version 1 Series of 2025 BME 12: HUMAN BEHAVIOR IN ORGANIZATION Chapter 2: The Changing Environment of Organization (Narrative of Discussion) Book Reference: Organizational Behavior: Managing People and Organization Author: Ricky Griffin, Jean Phillips, Stanley Gully The changing environment of business presents both opportunities and challenges for managers today. Five important environmental forces are globalization, diversity, technology, ethics and corporate governance, and new employment relationships. I. DIVERSITY AND BUSINESS Diversity- refers to the variety of observable and unobservable similarities and differences among people. Some differences, such as gender, race, and age, are often the first diversity characteristics to come to mind. But diversity is much more than demographics and can reflect combinations of characteristics rather than a single attribute. Each individual also has a variety of characteristics, and combinations of them can result in diversity. Types of Diversity 1. Surface-level diversity refers to observable differences in people, including race, age, ethnicity, physical abilities, physical characteristics, and gender. 2. Deep-level diversity refers to individual differences that cannot be seen directly, including goals, values, personalities, decision-making styles, knowledge, skills, abilities, and attitudes. a. Separation diversity refers to differences in position or opinion among group members reflecting disagreement or opposition – (dissimilarity in an attitude or value, for example, especially with regard to group goals or processes.) b. Variety diversity refers to differences in a certain type or category, including group members’ expertise, knowledge, or functional background. c. Disparity diversity refers to differences in the concentration of valuable social assets or resources (dissimilarity in rank, pay, decision-making authority, or status.) Trends of Diversity Some short-term demographic trends are strong enough to suggest that the changing demographic mix in the workforce will continue to increase the importance of understanding and leveraging diversity. ∙ The Census Bureau projects that by 2020 the U.S. workforce will consist of 62.3 percent White non-Hispanics, 18.6 percent Hispanics, 12 percent Blacks, and 5.7 percent Asians.  Longer-term U.S. demographic projections further highlight the increasingly diverse character of the United States: The population is projected to become older. ∙ By 2050, the total population is forecasted to increase 49%. ∙ Non-Hispanic Whites are expected to decrease from 69.4% to 50.1% of the total population by 2050. ∙ People of Hispanic origin is projected to increase 188% by 2050. ∙ The Black population is projected to increase by 71% by 2050. ∙ The Asian population is forecasted to grow 213% by 2050. In 2014, only 23 of the Fortune 500 CEOs were minorities, and White people held 87% of total seats on corporate boards of directors. Many countries and regions face talent shortages at all levels, and those gaps are expected to worsen. Talent shortages are forecast to rise globally Generational Differences Age-based diversity is a major issue facing many organizations today ∙ May result in younger managers supervising older workers ∙ Reverse mentoring: pairing a junior employee with a senior employee to transfer technical/computer skills from the junior employee to the senior one The labor force in the United States is getting older. For example, as shown here, between 2006 and 2016 the number of U.S. workers between the ages of 65 and 74 grew by 83.4 percent, and the percentage of workers 75 and older grew by 84.3 percent. In contrast, the number of workers between the ages of 25 and 54 grew only by 2.4 percent. The U.S. Bureau of Labor Statistics projects a dramatic increase in workers age sixty-five and older during the next decade, while the percentage of younger workers is expected to decrease. Most experts characterize today’s workforce as comprising four generations. According to date of birth, they are: ∙ seniors (1922–1943) ∙ baby boomers (1943–1963) ∙ Generation X (1964–1980) ∙ Generation Y, also referred to as the Millennial Generation (1980–2000)/ (1997)  ∙ Generation Z (1997-2012) also known as Zoomers, a demographic cohort succeeding millennials ∙ Generation Alpha (2012- present) and are expected to be immersed in technology since birth and other gadgets. Older workers may have better job performance but need mentoring to adopt new technology. Diversity Issues for Managers Why should we care about diversity? As managers, diversity awareness will enable us to hire, retain, and engage the best talent, which will help to maximize the organization’s performance. Diversity also fosters greater creativity and innovation. 1. The Business Case for Diversity One reason that organizations should promote diversity is performance. Recent research has found that firm performance increases when employees have more positive attitudes toward diversity. Diversity contributes to a firm’s competitive advantage when it enables all employees to contribute their full talents and motivation to the company. Diversity management is also important for legal reasons. The Civil Rights Act of 1991 allows monetary damages in cases of intentional employment discrimination. Obeying the law and promoting diversity is consistent with hiring the people best suited for the job and organization. 2. Barriers to Inclusion Given both the performance benefits and legal imperatives of diversity, then, what prevents companies from becoming inclusive and making the most of their diversity? A report of the U.S. Equal Employment Opportunity Commission identified several common diversity barriers that exist in many organizations. These barriers, summarized in Table 2.2, stem from a variety of decision-making and psychological factors as well as from employee unawareness. Understanding and proactively addressing the barriers can minimize their impact and enhance inclusion. a. The “Like Me” Bias Consciously or unconsciously, we tend to associate with others whom we perceive to be like ourselves. This bias is part of human nature. b. Stereotypes A stereotype is a belief about an individual or a group based on the idea that everyone in that particular group will behave the same way. Stereotypes are harmful because they result in judgments about an individual based solely on his or her being part of a particular group, regardless of his or her unique identity. Stereotypes are often negative and erroneous, and thus adversely affect the targeted individuals. c. Prejudice Even if an organization has a strong commitment to inclusion, it is possible that the beliefs and actions of individual employees or managers are inconsistent with the organization’s policies and values. d. Perceived Threat of Loss As voluntary efforts are made by companies to promote inclusion, members of groups who traditionally have been the predominant employees of a particular workforce or occupation may grow anxious or angry. If they perceive a direct threat to their own career opportunities, they may feel that they need to protect their own prospects by impeding the prospects of others. e. Ethnocentrism Ethnocentrism reflects the belief that one’s own language, native country, and cultural rules and norms are superior to all others. Ethnocentrism often has less to do with prejudice and more to do with inexperience or ignorance about other people and environments. f. Unequal Access to Organizational Networks All organizations have formal and informal networks. These organizational networks influence knowledge sharing, resource accessibility, and work opportunities. Women and minorities are often excluded from informal organizational networks, which can be important to job performance, mentoring opportunities, and being seen as a candidate for promotion.  3. Managing Diversity The most important element in effectively leveraging the positive potential of diversity is top management support for diversity and for diversity initiatives. ∙ Top management support for diversity and for diversity initiatives. ∙ Reciprocal mentoring: matches senior employees with diverse junior employees to allow both individuals to learn more about a different group. ∙ Older adults may benefit from self-paced learning environments and confidence-boosting interventions. ∙ It is not realistic to claim or to pursue an “I’m totally unbiased” stance with regard to diversity. An inclusive environment is created when all employees’ cultural awareness and empathy are enhanced through diversity training and all employees are given equal access to mentors and other influential company employees. Creating fair company policies and practices that give all employees equal access to performance feedback, training and development, and advancement opportunities is also critical. Diversity initiatives are more successful when the company is able to keep employees thinking about diversity issues, even when they do not feel a direct, negative impact. Training and mentoring can also help. Diversity training and diversity education need to communicate that bias is a part of being human. It is not realistic to claim or to pursue an “I’m totally unbiased” stance with regard to diversity. II. GLOBALIZAITON AND BUSINESS Another environmental factor that affects OB is globalization or the internationalization of business activities and the shift toward an integrated global economy. From a business standpoint the widespread effects of globalization are relatively new, at least in the United States. A. Trends in Globalization Factors affecting Globalization ∙ Advances in communication and transportation ∙ Businesses have expanded internationally to increase their markets. ∙ Control of labor, distribution and distribution costs ∙ Increased international competition In 2014, the volume of international trade in current dollars was about 50 times greater than the amount in 1960. Four major factors account for much of the growth in international trade. First, communication and transportation have improved dramatically over the past several decades. It is simply easier to conduct international business today than was the case just a few years ago. Second, businesses have expanded internationally to increase their markets. Third, more and more firms are moving into international markets to control costs, especially to reduce labor costs. Finally, many organizations have become international in response to competition. If an organization starts gaining strength in international markets, its competitors often must follow suit to avoid falling too far behind in sales and profitability. B. Cultural Competence One of the worst, yet easiest, mistakes people can make is to assume that other people are just like them. People from different cultures see and do things in different ways. Culture The set of shared values, often taken for granted that help people in a group, organization, or society  understand which actions are considered acceptable and which are deemed unacceptable Cultural competence is the ability to interact effectively with people of different cultures. There are four components of cultural competence: 1. Awareness of our own cultural worldview, and of our reactions to people who are different. 2. Our attitude toward cultural differences. 3. Knowledge of different worldviews and cultural practices. 4. Cross-cultural skills. C. Cross-Cultural Differences and Similarities We now turn our attention to differences and similarities in behavior across cultures. 1. General Observations Cultural and national boundaries do not necessarily coincide. Given this basic assumption, one major review of the literature on international management reached five basic conclusions. a. behavior in organizational settings does indeed vary across cultures. b. Culture itself is one major cause of this variation. Culture is the set of shared values, often taken for granted, that help people in a group, organization, or society understand which actions are considered acceptable and which are deemed unacceptable. c. Although the causes and consequences of behavior within organizational settings remain quite diverse across cultures, organizations and the ways they are structured appear to be growing increasingly similar. d. The same individual behaves differently in different cultural settings. e. Cultural diversity can be an important source of synergy in enhancing organizational effectiveness. 2. Specific Cultural Issues Geert Hofstede, a Dutch researcher, studied workers and managers in 60 countries and found that specific attitudes and behaviors differed significantly because of the values and beliefs that characterized those countries. The two primary dimensions that Hofstede found are the individualism/collectivism continuum and power distance. Individualism exists to the extent that people in a culture define themselves primarily as individuals rather than as part of one or more groups or organizations. Collectivism, on the other hand, is characterized by tight social frameworks in which people tend to base their identities on the group or organization to which they belong. Power distance, which might also be called orientation to authority, is the extent to which people accept as normal an unequal distribution of power. Hofstede also identified other dimensions of culture. Uncertainty avoidance, which might also be called preference for stability, is the extent to which people feel threatened by unknown situations and prefer to be in clear and unambiguous situations. Masculinity, which might be more accurately called assertiveness or materialism, is the extent to which the dominant values in a society emphasize aggressiveness and the acquisition of money and other possessions as opposed to concern for people, relationships among people, and overall quality of life. Hofstede’s framework has recently been expanded to include long-term versus short-term orientation. Long-term values include focusing on the future, working on projects that have a distant payoff, persistence, and thrift. Short-term values are more oriented toward the past and the present and include respect for traditions and social obligations. The important issue to remember is that people from diverse cultures value things differently from each other and that people need to take these differences into account as they work. D. Global Perspective A global perspective is distinguished by a willingness to be open to and learn from the alternative systems and meanings of other people and cultures, and a capacity to avoid assuming that people everywhere are the same. Given globalization trends and the multicultural nature of the U.S. workforce, managers increasingly need a global perspective and a supportive set of skills and knowledge to be most effective. III. TECHNOLOGY AND BUSINESS Technology refers to the methods used to create products, including both physical goods and intangible services. Reasons:(1) the shift toward a service-based economy, (2) the growing use of technology for competitive advantage, and (3) mushrooming change in information technology A. Manufacturing and Service Technologies Manufacturing is a form of business that combines and transforms resources into tangible outcomes that are then sold to others. A service organization is one that transforms resources into an intangible output and creates time or place utility for its customers. Managers have come to see that many of the tools, techniques, and methods that are used in a factory are also useful to a service firm. At the same time, though, service-based firms must hire and train employees based on a different skill set than is required by most manufacturers. B. Technology and Competition Technology is the basis of competition for some firms, especially those whose goals include being the technology leaders in their industries. But because of the rapid pace of new developments, keeping a leadership position based on technology is becoming increasingly challenging. Businesses have increasingly found that they can be more competitive if they can systematically decrease cycle times (the time that it takes a firm to accomplish some recurring activity or function from beginning to end). C. Information Technology Most people are very familiar with the swift advances in information technology. Breakthroughs in information technology have resulted in leaner organizations, more flexible operations, increased collaboration among employees, more flexible work sites, and improved management processes and systems On the other hand, they have also resulted in less personal communication, less “down time” for managers and employees, and an increased sense of urgency vis-à-vis decision making and communication—changes that have not necessarily always been beneficial. Information technology and social media – Advantages: leaner and more flexible organizations, increased collaboration, improved management processes/systems – Disadvantages: less personal communication, less “down time,” an increased sense of communication and decision making urgency IV. ETHICS AND CORPORATE GOVERNANCE Ethics- A person’s beliefs regarding what is right or wrong in a given situation. One special aspect of business ethics, corporate governance, has also taken on increased importance. Ethics also increasingly relate to information technology. A. Framing Ethical Issues Most ethical dilemmas faced by managers relate to how the organization treats its employees, how employees treat the organization, and how employees and organizations treat other economic agents. Figure 2.3 Managers face a variety of ethical situations. In most cases these situations involve how the organization treats its employees, how employees treat the organization, and how employees and organizations treat other economic agents. 1. How an Organization Treats Its Employees This area includes policies such as hiring and firing, wages and working conditions, and employee privacy and respect. Wages and working conditions, although tightly regulated, are also areas for potential controversy. The same goes for employee benefits, especially if an organization takes action that affects the compensation packages—and welfare— of an entire workforce or segment of it. Finally, most observers would also agree that an organization is obligated to protect the privacy of its employees. 2. How Employees Treat the Organization Numerous ethical issues also stem from how employees treat the organization, especially in regard to conflicts of interest, secrecy and confidentiality, and honesty. A conflict of interest occurs when a decision potentially benefits the individual to the possible detriment of the organization. Divulging company secrets is also clearly unethical. (that’s why sometimes, there’s a Non-Disclosure Agreement) Honesty in general. Relatively common problems in this area include such activities as using a business telephone to make personal calls, stealing supplies, and padding expense accounts. Although most employees are basically honest, organizations must nevertheless be vigilant to avoid problems resulting from such behaviors. 3. How Employees and the Organization Treat Other Economic Agents  Managerial ethics also come into play in the relationship between the firm and its employees with other economic agents. As shown in Figure 2.3, the primary agents of interest include customers, competitors, stockholders, suppliers, dealers, and unions. The interactions between the organization and these agents that may be subject to ethical ambiguity include advertising and promotions, financial disclosures, ordering and purchasing, shipping and solicitations, bargaining and negotiation, and other business relationships. financial reporting by some e-commerce firms. In at least a few cases, some firms have substantially overstated their earnings projections to entice more investment. (window dressing) Ethical business practices in different countries. In some countries, bribes and side payments are a normal and customary part of doing business. B. Ethical Issues in Corporate Governance A related area of emerging concern relates to ethical issues in corporate governance— the oversight of a public corporation by its board of directors. The board of a public corporation is expected to ensure that the business is being properly managed and that the decisions made by its senior management are in the best interests of shareholders and other stakeholders. But in far too many cases the recent ethical scandals alluded to previously have actually started with a breakdown in the corporate governance structure. Boards of directors are also increasingly being criticized even when they are not directly implicated in wrongdoing. The biggest complaint here often relates to board independence. C. Ethical Issues and Information Technology Issues in this section is individual rights to privacy and the potential abuse of information technology by companies. One-way management can address these concerns is by posting a privacy policy on its website. The policy should explain exactly what data the company collects and who gets to see the data. It should also allow people a choice about having their information shared with others and indicate how people can opt out of data collection. In addition, companies can offer web surfers the opportunity to review and correct information that has been collected, especially medical and financial data. Despite the technical difficulties, government agencies are already working on Internet privacy guidelines; this means, in turn, that companies will also need internal guidelines, training, and leadership to ensure compliance. Social Responsibility. Definitions of corporate social responsibility often include businesses living and working together for the common good and valuing human dignity. An important part of this is how employers treat their employees. Is it really the responsibility of businesses to be good citizens? Doing so can help a firm attract the best talent, and customers are increasingly favoring companies that do the right thing. o Businesses living and working together for the common good and valuing human dignity o Have lasting effects, social responsibility efforts should be integrated into the culture of the organization. ▪ Corporate sustainability initiatives can be top-down, with someone in a position of authority dictating to managers and employees what to do. Corporate sustainability efforts can also be grassroots, with employees identifying projects and taking the initiative to organize their own activities.  o The International Organization for Standardization (ISO) has created a variety of standards that help organizations gain international acceptance of their practices and outcomes V. NEW EMPLOYMENT RELATIONSHIPS A final significant area of environmental change that is particularly relevant for businesses today involves what we call new employment relationships. Two particularly important areas today involve: 1.) the management of knowledge workers and 2.) the outsourcing of jobs to other businesses, especially when those businesses are in other countries. Managing temporary and contingency workers and tiered workforces is also becoming increasingly complex. The nature of psychological contracts is also changing. research and development. Up to a point, at least, outsourcing makes A. The Management of Knowledge Workers good business sense in areas that are highly unrelated to a firm’s core business activities. Traditionally, employees added value to organizations because of what they did or because of their experience. Disadvantage: However, during today’s “information age,” many employees add value simply because of what they know. These employees Disaffected employees: are often referred to as knowledge workers. (ex. computer scientists, physical scientists, engineers, product designers, out-of-job workers are used to video game developers) train the newly hired foreign Issues: replacements Reduction of a. As the importance of information-driven jobs grows, domestic job opportunities the need for knowledge workers will grow as well. However, these employees require extensive and However, what has attracted considerably highly specialized training, and not everyone is more attention in recent years is the growing trend willing to make the human capital investments toward outsourcing abroad in order to lower labor necessary to move into these jobs. costs; this practice is often called offshoring. b. Compensation and related policies for knowledge C. Temp and Contingency Workers workers must also be specially tailored. Another trend that has impacted employment B. Outsourcing and Offshoring relationships in business involves the use of contingent or temporary workers. Outsourcing is the practice of hiring other firms to do work previously performed by the organization A contingent worker is a person who works for an itself; when this work is moved overseas, it is often organization on something other than a permanent or called offshoring. full time basis. Categories of contingent workers include independent contractors, on-call workers, Advantage: temporary employees (usually hired through outside It is an increasingly popular strategy because agencies), and contract and leased employees. it helps firms focus on their core activities and avoid Another category is part-time workers. getting sidetracked by secondary activities. Firms today often outsource numerous activities, including Managing contingent workers is not always payroll, employee training, facility maintenance, and straightforward, however, especially from a behavioral  perspective. Expecting too much from such workers, for example, is a mistake that managers should avoid. Managers must understand that they need to develop a strategy for integrating contingent workers organization provides inducements to the according to some sound logic and then follow that individual. Some inducements, such as pay and career strategy consistently over time. opportunities, are tangible rewards. Others, such as job security and status, are more intangible. D. Tiered Workforce Yet another emerging issue in new employment If either party sees an inequity in the relationships is what we call the tiered workforce. contract, that party may initiate a change. The employee might ask for a pay raise or promotion, put A tiered workforce exists when one group of an forth less effort, or look for a better job elsewhere. organization’s workforce has a contractual The organization can also initiate change by training arrangement with the organization objectively the worker to improve his skills, by transferring him different from that of another group performing the to another job, or by firing him. same jobs. All organizations face the basic challenge of These and similar arrangements, of course, may pose managing psychological contracts. They want value new challenges in the future. For instance, recently from their employees, and they need to give hired workers may come to feel resentment towards employees the right inducements. their more senior colleagues who are getting paid more for the same work. Likewise, as the job market Recent trends in downsizing and cutbacks improves and workers have more options, firms may have complicated the process of managing face higher turnover among their newer lower-paid psychological contracts, especially during the employees. recession of 2008–2010. E. The Changing Nature of Psychological Contracts Increased globalization of business also complicates the management of psychological A final element of the business environment contracts. that both affects and is affected by employment relationships such as those discussed above is the A related problem faced by international psychological contract. businesses is the management of psychological A psychological contract is a person’s contracts for expatriate managers. In some ways, this overall set of expectations regarding what he or she process is more like a formal contract than are other will contribute to the organization and what the employment relationships. organization will provide in return. Figure 2.4Psychological contracts govern the basic relationship between people and organizations. Individuals contribute such things as effort and loyalty. In turn, organizations offer such inducements as pay and job security. In return for these contributions, the Kingfisher School of Business and ORGANIZATION BME 12 Lecture Notes Version 1 Series of 2025 Finance, Inc. BME 12: HUMAN BEHAVIOR IN II. Individual Behaviors and Organization Processes in Organization Chapter 3: Individual Characteristics (Narrative of Discussion) Book Reference: Organizational Behavior: Managing People and Organization Author: Ricky Griffin, Jean Phillips, Stanley Gully Chapter Outline I. People in Organizations A. Individual Differences Individual differences are personal attributes that vary from one person to another. Individual differences may be physical, psychological, and emotional. (Example of Categories: personality, intelligence, learning styles, attitudes, values and emotions, perception, and stress.) Managers should also be aware of psychological contracts that exist between the organization and its employees. In an ideal situation, then, understanding differences across people and creating effective psychological contracts can help facilitate a good fit between people and the organization. B. The Concept of Fit 1. Person-Job Fit (Abilities and Motivation = Demand and reward of the Job It is the fit between a person’s abilities and the demands of the job, and the fit between a person’s desires and motivations and the attributes and rewards of a job. It is usually the primary focus of most staffing efforts due to the reason of job performance determines the employee’s success. It is important to consider not only the fit between an individual’s talents and the job requirements, but also the fit between an individual’s motivations and the rewards offered by the job. Based on researches it leads to higher job performance, satisfaction, organizational commitment, and intent to stay with the company. 2. Person-Group Fit (Individual = Group or other Member’s Work styles) It means that an individual fits with the workgroup’s work styles, skills, and goals. Person-group fit leads to improved job satisfaction, organizational commitment, intent to stay with the company, and critical in team-oriented organizations. 3. Person-Organization Fit (Individual = Organization’s Values Culture, etc.) It is the fit between an individual’s values, beliefs, and personality and the values, norms, and culture of the organization. (norms like integrity, fairness, work ethic, competitiveness, cooperativeness, and compassion) The strength of this fit influences important organizational outcomes including job performance, retention, job satisfaction, and organizational commitment. To maximize person- organization fit, start in identifying those qualifications, competencies, and traits that relate to the organization’s strategy, values, and processes and hire people with those characteristics. Employees must be able and  willing to adapt to a company by learning, negotiating, enacting, and maintaining the behaviors appropriate to the company’s environment. 4. Person-Vocation Fit (Individual Abilities = Occupation) The fit between a person’s interests, abilities, values, and personality and a profession. Our adjustment and satisfaction are greater when our occupation meets our needs. Although individuals usually choose a vocation long before applying to an organization, understanding person-vocation fit can still be useful to organizations and managers. Companies wanting to develop their own future leaders, or smaller organizations that need employees to fill multiple roles, may be able to use vocational interests in determining whether job applicants would be a good fit with the organization’s future needs. C. Realistic Job Previews Realistic job previews (RJPs) involve the presentation of both positive and potentially negative information to job candidates. Its main goal is to provide accurate information about the job and organization and build trust. If a common reason for employees leaving an organization is that the job is not what they expected, this is a good sign that the recruiting message can be improved. Given the relatively low cost associated with their development, RJPs may be useful for organizations trying to reduce turnover rates for jobs that departing employees say were not what they expected when they accepted job offers. II. Personality and Individual Behavior Personality is the relatively stable set of psychological attributes that distinguish one person from another. Managers should strive to understand basic personality attributes and how they can affect people’s behavior and fit in organizational situations, not to mention their perceptions of and attitudes toward the organization. A. The “Big Five” Framework (OCEAN) Openness reflects a person’s rigidity of beliefs and range of interests. ∙ better performers due to their flexibility ∙ It encompasses a person’s willingness and receptive perspective to accept change. Conscientiousness refers to the extent to which a person can be counted on to get things done. In general, research suggests that being strong on conscientiousness is often a good predictor of job performance for many jobs. Extraversion reflects a person’s comfort level with relationships. Research suggests that extroverts tend to be higher overall job performers than introverts and that they are more likely to be attracted to jobs based on personal relationships, such as sales and marketing positions. For this particular trait, the opposite version is also given a name—introversion. An introvert tends to be less comfortable in social situations. Agreeableness refers to a person’s ability to get along with others. They people are better at developing good working relationships with coworkers, subordinates, and higher level managers The same pattern might extend to relationships with customers, suppliers, and other key organizational constituents. Neuroticism. People who are relatively more neurotic tend to experience unpleasant emotions such as anger, anxiety, depression, and feelings of vulnerability more often than do people who are relatively less neurotic. They are expected  to better handle job stress, pressure, and tension. The potential value of the Big Five framework is that it encompasses an integrated set of traits that appear to be valid predictors of certain behaviors in certain situations. Thus, managers who can both understand the framework and assess these traits in their employees are in a good position to understand how and why they behave as they do. B. The Myers-Briggs Framework This is also a popular framework that some people use to characterize personality. Many people know of this framework through a widely-used questionnaire called the Myers-Briggs Type Indicator, or MBTI. The MBTI was based on Carl Jung’s work and first developed by Isabel Briggs Myers (1897–1979) and her mother, Katharine Cook Briggs, to help people understand themselves and each other so that they could find work that matches their personality. The MBTI uses four scales with opposite poles to assess four sets of preferences. The four scales are: 1. Extroversion (E)/Introversion (I): Extroverts are energized by things and people. Their motto is, “ready, fire, aim.” Introverts find energy in ideas, concepts, and abstractions. They are reflective thinkers whose motto is, “ready, aim, aim.” 2. Sensing (S)/Intuition (N): Sensing people are detail oriented. They want and trust facts. Intuitive people seek out patterns and relationships among the facts they have learned. They trust their intuition and look for the “big picture.” 3. Thinking (T)/Feeling (F): Thinkers value fairness, and decide things impersonally based on objective criteria and logic. Feelers value harmony, and focus on human values and needs as they make decisions or judgments. 4. Judging (J)/Perceiving (P): Judging people are decisive and tend to plan. They develop plans and follow them, adhering to deadlines. Perceptive people are adaptable, spontaneous, and curious. They start many tasks, and often find it difficult to complete them. Deadlines are meant to be stretched. The possible combinations of these preferences result in sixteen personality types, which are identified by the four letters that represent one’s tendencies on the four scales. III. Other Important Personality Traits A. Locus of Control is the extent to which people believe that their behavior has a real effect on what happens to them. A believe that if they work hard they will succeed. They may also believe that people who fail do so because they lack ability or motivation. Other people think that fate, chance, luck, or other people’s behavior determines what happens to them. People who think that forces beyond their control dictate what happens to them are said to have an external locus of control. B. Self-Efficacy is our confidence in our ability to cope, perform, and be successful on a specific task. It is possible to have high self-esteem but low self-efficacy for certain tasks. A key factor influencing motivation and engagement in an activity. General self-efficacy reflects a generalized belief that we will be successful at whatever challenges or tasks we might face. C. Self-Esteem refers to our feelings of self-worth and our liking or disliking of ourselves. Self-esteem is positively related to job performance and learning. D. Authoritarianism is the extent to which a person believes that power and status differences are appropriate within hierarchical social systems such as organizations. A person who is highly authoritarian may accept directives or orders from someone with more authority purely because the other person is “the boss.” On the other hand, a person who is not highly authoritarian, although she or he may still carry out reasonable directives from the boss, is more likely to question things, express disagreement with the boss, and even refuse to carry out orders if they are for some reason objectionable. E. Machiavellianism The term “Machiavellianism” is used to describe behavior directed at gaining power and controlling the behavior of others. More Machiavellian individuals tend to be rational and unemotional, may be willing to lie to attain their personal goals, put little emphasis on loyalty and friendship, and enjoy manipulating others’ behavior. F. Tolerance for Risk and Ambiguity Tolerance for risk (also called risk propensity) is the degree to which a person is comfortable accepting risk, willing to take chances and to make risky decisions. A manager with a high tolerance for risk might lead the organization in new and different directions. A manager with low tolerance for risk might lead an organization to stagnation and excessive conservatism, or might help the organization successfully weather turbulent and unpredictable times by maintaining stability and calm. Tolerance for ambiguity reflects the tendency to view ambiguous situations as either threatening or desirable. Intolerance for ambiguity reflects a tendency to perceive or interpret vague, incomplete, or fragmented information or information with multiple, inconsistent, or contradictory meanings as an actual or potential source of psychological discomfort or threat. Being tolerant of ambiguity is related to creativity, positive attitudes toward risk, and orientation to diversity. G. Type A and B Traits The Type A personality is impatient, competitive, ambitious, and uptight. The Type B personality is more relaxed and easygoing and less overtly competitive than Type A. Understanding the personality type of your coworkers and boss can help you to better understand and manage this potential source of work conflicts. Recognizing your personality type can help you to identify work situations that are good fits for you. H. The Bullying Personality Workplace bullying is a repeated mistreatment of another employee through verbal abuse; conduct that is threatening, humiliating, or intimidating; or sabotage that interferes with the other person’s work. Bullying costs employers through higher turnover, greater absenteeism, higher workers’ compensation costs, and higher disability insurance rates, not to mention a diminished reputation as a desirable place to work.  It is four times more common than harassment. Bullying is complex and comes in a variety of forms, but common to all types is the abuse of authority and power, stemming from the bully’s need to control another person. I. Role of the Situation The relationship between personality and behavior changes depending on the strength of the situation we are in. Strong organizational cultures might decrease the influence of personality on employee behaviors by creating clear guidelines for employee behavior. Weaker organizational cultures might allow greater individual employee expression, resulting in a wider variety of employee behaviors. IV. Intelligence There are many types of intelligence, or mental abilities, including general mental ability, information processing capacity, verbal ability, and emotional intelligence. A. General Mental Ability General mental ability is the capacity to rapidly and fluidly acquire, process, and apply information. It involves reasoning, remembering, understanding, and problem solving. It is associated with the increased ability to acquire, process, and synthesize information and has been defined simply as the ability to learn. The strong association between measures of general mental ability and performance in a wide variety of task domains is one of the most consistent findings in the field of organizational behavior. Information processing capacity involves the manner in which individuals process and organize information. Information processing capacity also helps explain differences between experts and novices on task learning and performance, as experts process and organize information more efficiently and accurately than novices. General mental ability influences information processing capacity. Mental ability tests typically use computerized or paper-and-pencil test formats to assess general mental abilities, including verbal or mathematical reasoning, logic, and perceptual abilities. B. Multiple Intelligences Gardner’s theory of multiple intelligences suggests that there are a number of distinct forms of intelligence that each individual possesses in varying degrees: 1. Linguistic: words and language 2. Logical-mathematical: logic and numbers 3. Musical: music, rhythm, and sound 4. Bodily-kinesthetic: body movement and control 5. Spatial-visual: images and space 6. Interpersonal: other people’s feelings 7. Intrapersonal: self-awareness The different intelligences represent not only different content domains but also learning preferences. The theory suggests that assessment of abilities should measure all forms of intelligence, not just linguistic and logical mathematical, as is commonly done.  C. Emotional Intelligence Emotional intelligence (EI) is an interpersonal capability that includes the ability to perceive and express emotions, to understand and use them, and to manage emotions in oneself and other people. Expert Daniel Goleman describes five dimensions of EI that include three personal competencies (self-awareness, self-regulation, and motivation) and two social competencies (empathy and social skills). The five dimensions comprising emotional intelligence are: 1. Self-awareness: being aware of what you are feeling 2. Self-motivation: persisting in the face of obstacles, setbacks, and failures 3. Self-management: managing your own emotions and impulses 4. Empathy: sensing how others are feeling 5. Social skills: effectively handling the emotions of others People differ in the degree to which they are able to recognize the emotional meaning of others’ facial expressions, although seven universal emotions are expressed in the face in exactly the same way regardless of race, culture, ethnicity, age, gender, or religion. These emotions are joy, sadness, fear, surprise, anger, contempt, and disgust. The ability to understand what others think and feel, knowing how to appropriately persuade and motivate them, and knowing how to resolve conflicts and forge cooperation are some of the most important skills of successful managers. There is also controversy associated with the concepts of EI. Some have argued that its overly inclusive, lacks specificity, and it is not clear if it is simply a learned skill or an innate capability. Several researchers have also argued that EI is simply a surrogate for general intelligence and well-established personality traits. However, a number of studies have supported the usefulness of EI. V. Learning Styles Learning style refers to individual differences and preferences in how we process information when problem solving, learning, or engaging in similar activities. There are numerous typologies, measures, and models that capture these differences and preferences A. Sensory Modalities One approach addresses our preference for sensory modality. A sensory modality is a system that interacts with the environment through one of the basic senses. The most important sensory modalities are: ∙ Visual: learning by seeing ∙ Auditory: learning by hearing ∙ Tactile: learning by touching ∙ Kinesthetic: learning by doing  B. Learning Style Inventory A second approach to understanding learning styles, the Kolb Learning Style Inventory, is one of the more dominant approaches to categorizing cognitive styles. Kolb suggests that there are four basic learning styles: 1. Convergers: depend primarily on active experimentation and abstract conceptualization to learn. People with this style are superior in technical tasks and problems and inferior in interpersonal learning settings. 2. Divergers: depend primarily on concrete experience and reflective observation. People with this style tend to organize concrete situations from different perspectives and structure their relationships into a meaningful whole. They are superior in generating alternative hypotheses and ideas, and tend to be imaginative and people or feeling oriented. 3. Assimilators: depend on abstract conceptualization and reflective observation. These individuals tend to be more concerned about abstract concepts and ideas than about people. They also tend to focus on the logical soundness and preciseness of ideas, rather than the ideas’ practical values; they tend to work in research and planning units. 4. Accommodators: rely mainly on active experimentation and concrete experience, and focus on risk taking, opportunity seeking, and action. Accommodators tend to deal with people easily and specialize in action-oriented jobs, such as marketing and sales. C. Learning Style Orientations Finally, Annette Towler and Robert Dipboye102 developed a learning style orientation measure to address some of the limitations of the Kolb inventory and identify key styles and preferences for learning. They identified five key factors: 1. Discovery learning: an inclination for exploration during learning. Discovery learners prefer subjective assessments, interactional activities, informational methods, and active-reflective activities. 2. Experiential learning: a desire for hands-on approaches to instruction. Experiential learning is positively related to a preference for action activities. 3. Observational learning: a preference for external stimuli such as demonstrations and diagrams to help facilitate learning. Observational learning is positively related to preference for informational methods and active-reflective methods. 4. Structured learning: a preference for processing strategies such as taking notes, writing down task steps, and so forth. Structured learning is related to preferences for subjective assessments. 5. Group learning: a preference to work with others while learning. Group learning is related to preferences for action and interactional learning. BME 12 Lecture Notes Kingfisher School of Business and Finance, Inc. Version 1 Series of 2025  BME 12: HUMAN BEHAVIOR IN ORGANIZATION II. Individual Behaviors and Organization Processes in Organization Chapter 4: Individual Values Perception and Reaction (Narrative of Discussion) Book Reference: Organizational Behavior: Managing People and Organization Author: Ricky Griffin, Jean Phillips, Stanley Gully I. ATTITUDES IN ORGANIZATIONS People’s attitudes obviously affect their behavior in organizations. Attitudes are complexes of beliefs and feelings that people have about specific ideas, situations, or other people. A. How Attitudes Are Formed Attitudes are formed by a variety of forces, including our personal values, our experiences, and our personalities. THREE COMPONENTS OF ATTITUDE 1. Cognition is the knowledge a person presumes to have about something. This “knowledge” may be true, partially true, or totally false. Cognitions are based on perceptions of truth and reality, and, as we note later, perceptions agree with reality to varying degrees. 2. A person’s affect is his or her feelings toward something. In many ways, affect is similar to emotion—it is something over which we have little or no conscious control. 3. Intention guides a person’s behavior However, intentions are not always translated into actual behavior. Some attitudes, and their corresponding intentions, are much more central and significant to an individual than others. You may intend to do one thing (take a particular class) but later alter your intentions because of a more significant and central attitude (fondness for sleeping late). B. Cognitive Dissonance Suppose that you strongly believe that all companies need to be both profitable and environmentally responsible, and that you are the new CEO of a company that is a terrible polluter. You learn that reducing your company’s carbon emissions would be so expensive that the company would no longer be profitable. What would you do? Cognitive dissonance is an incompatibility or conflict between behavior and an attitude or between two different attitudes. When people experience dissonance, they often use one of four approaches to cope with it. Using the scenario above, these would include: 1. You can change your behavior and reduce the company’s carbon emissions. 2. You can reduce the felt dissonance by reasoning that the pollution is not so important when compared to the goal of running a profitable company. 3. You can change your attitude toward pollution to decrease your belief that pollution is bad. 4. You can seek additional information to better reason that the benefits to society of manufacturing the products outweigh the societal costs of polluting.  Interestingly, though, sometimes people are aware of their dissonance but make a conscious decision to not reduce it. This decision would be influenced by these three things: 1. Your perception of the importance of the elements that are creating the dissonance. If the elements involved in the dissonance are less important to you, it is easier to ignore. 2. The amount of influence you feel you have over these elements. If the Board of Directors blocks your plans, it is easier to rationalize the dissonance and not take action. 3. The rewards involved in the dissonance. Rewards for dissonance tend to decrease our reactions to it. C. Attitude Change Attitudes are not as stable as personality attributes. For example, new information may change attitudes. Likewise, if the object of an attitude changes, a person’s attitude toward that object may also change. Attitudes can also change when the object of the attitude becomes less important or less relevant to the person. Finally, as noted earlier, individuals may change their attitudes as a way to reduce cognitive dissonance. Deeply rooted attitudes that have a long history are, of course, resistant to change. D. Key Work-Related Attitudes People in an organization form attitudes about many different things. Of course, some of these attitudes are more important than others. Especially important attitudes are job satisfaction, organizational commitment, and employee engagement. 1. Job Satisfaction – it reflects our attitudes and feelings about our job. Factors that have the greatest influence on job satisfaction are the work itself, attitudes, values, and personality. Satisfaction with the nature of the work itself is the largest influence on job satisfaction. Challenging work, autonomy, variety, and job scope also increase job satisfaction. As a manager, if you want to increase your subordinates’ job satisfaction, focus first on improving the nature of the work they do. Our attitudes and values about work also influence our job satisfaction. Someone with a negative attitude toward work is less likely to be satisfied with any job than someone with a positive attitude toward work. Interestingly, our job satisfaction is somewhat stable over time, even when we change jobs or employers. Research evidence suggests that differences in job satisfaction are due in part to differences in employees’ genetics and personality. In particular, core self-evaluation, extroversion, and conscientiousness influence job satisfaction. (Are happy employees really more productive employees? The answer is yes. And the positive relationship between job satisfaction and job performance is even stronger for complex, professional jobs.) Job satisfaction positively influences employees’ attitudes and organizational citizenship behaviors. Conversely, job dissatisfaction is related to higher absenteeism and turnover, as well as to other withdrawal behaviors such as lateness, drug abuse, grievances, and retirement decisions. 2. Organizational Commitment – it reflects the degree to which an employee identifies with the organization and its goals and wants to stay with the organization. There are three ways we can feel committed to an employer: a. Affective commitment  Is a positive emotional attachment to the organization and strong identification with its values and goals. Affective commitment leads employees to stay with an organization because they want to, and is related to higher performance. b. Normative commitment Occurs when an employee feels obliged to stay with an organization for moral or ethical reasons. Normative commitment is related to higher performance and leads employees to stay with an organization because they feel they should. c. Continuance commitment Refers to an employee staying with an organization because of the perceived high economic and/or social costs involved with leaving. Continuance commitment leads employees to stay with an organization because they feel that they have to. 3. Employee Engagement Employee engagement is “a heightened emotional and intellectual connection that an employee has for his/her job, organization, manager, or coworkers that, in turn, influences him/her to apply additional discretionary effort to his/her work.” Engaged employees give their full effort to their jobs, often going beyond what is required because they are passionate about the firm and about doing their jobs well. Rather than wanting to do the work and wanting to do their best, disengaged workers feel they have to do the work, and generally do only what they have to do as a result. High employee engagement is related to superior business performance. As a manager, remember that the drivers of employee engagement can differ from the drivers of employee attraction and retention—what gets employees into an organization is not the same as what keeps them engaged and keeps them from leaving. Engagement is enhanced when employees: ∙ Have clear goals and roles ∙ Have the resources needed to do a good job ∙ Get meaningful feedback on their performance ∙ Are able to use their talents ∙ Are recognized for doing a good job ∙ Have positive relationships with coworkers ∙ Have opportunities to learn and grow ∙ Have supportive leadership ∙ II. VALUES AND EMOTIONS IN ORGANIZATIONS  Values are ways of behaving or end-states that are desirable to a person or to a group. Values can be conscious or unconscious. Work values influence important individual and organizational outcomes including performance and retention, and are often considered to be important work outcomes in themselves. A company leader’s personal values affect the firm’s business strategy and all aspects of organizational behavior including staffing, reward systems, manager–subordinate relationships, communication, conflict management styles, and negotiation approaches. Personal values also influence ethical choices. A. Types of Values Values can be described as terminal or instrumental, and as intrinsic or extrinsic. 1. Terminal and Instrumental Values Terminal values reflect our long-term life goals, and may include prosperity, happiness, a secure family, and a sense of accomplishment. Terminal values can change over time depending on our experiences and accomplishments. Instrumental values are our preferred means of achieving our terminal values or our preferred ways of behaving. Terminal values influence what we want to accomplish; instrumental values influence how we get there. The stronger an instrumental value is, the more we act on it. 2. Intrinsic and Extrinsic Work Values Intrinsic work values relate to the work itself. Most people need to find some personal intrinsic value in their work to feel truly satisfied with it. Extrinsic work values are related to the outcomes of doing work. Employees who work to earn money or to have health benefits are satisfying extrinsic work values. B. Conflicts among Values Intrapersonal, interpersonal, and individual-organization value conflicts all influence employee attitudes, retention, job satisfaction, and job performance. At some point in their career, many managers experience an intrapersonal value conflict between the instrumental value of ambition and the terminal value of happiness. People are generally happier and less stressed when their instrumental and terminal values are aligned. Unlike intrapersonal value conflicts, which are internal to an individual, interpersonal value conflicts occur when two different people hold conflicting values. Interpersonal value conflicts are often the cause of personality clashes and other disagreements. As a manager, it is important to remember that people’s constellations of instrumental and terminal values differ. These differences can lead to differences in work styles, work preferences, and reactions to announcements or events. Finally, just as two different employees’ values can conflict, an employee’s values can conflict with the values of the organization, creating individual-organization value conflict. Lower individual-organization value conflict leads to greater job satisfaction, higher performance, lower stress, and greater job commitment. C. How Values Differ around the World  Values are influenced by culture. Research has found that a large number of basic values can be condensed into two major dimensions that vary across cultures: (1) traditional/secular-rational values reflect the contrast between societies in which religion is very important and those in which it is not. (2) survival/self-expression values. emphasize economic and physical security. D. The Role of Emotions in Behavior Emotions also play an important role in organizations. Employees who effectively manage their emotions and moods can create a competitive advantage for a company. We all experience emotions at work. Our behaviors are not guided solely by conscious, rational thought. In fact, emotion often plays a larger role in our behaviors than does conscious reasoning. Emotions are intense, short-term physiological, behavioral, and psychological reactions to a specific object, person, or event that prepare us to respond to it. Let’s break this definition down into its four important elements: 1. Emotions are short events or episodes and relatively short-lived. 2. Emotions are directed at something or someone; differentiating them from moods. 3. Emotions are experienced; we feel emotion. 4. Emotions create a state of physical readiness through physiological reactions. Why is understanding the role of emotions important to organizations? First, because emotions are malleable, effective employees and managers know how to positively influence their own emotions and the emotions of others. Second, emotions influence both the creation and maintenance of our motivation to engage or to not engage in certain behaviors. Third, research has found that emotion can influence turnover, decision making, leadership, helping behaviors, and teamwork behaviors. Effective leaders use emotion to generate positive follower behaviors. E. Affect and Mood Although the cause of emotions tends be obvious, the cause of mood tends to be more unfocused and diffused. Moods are short-term emotional states that are not directed toward anything in particular. Our mood at the start of a workday influences how we see and react to work events, which influences our performance. Our moods can be influenced by others. Workgroups tend to experience shared group moods when they can display mood information to each other through facial, vocal, and behavioral cues. Changing group membership in a way that changes the manner in which coworkers interact can change the amount and type of mood information members get from each other and influence employees’ moods. Affectivity represents our tendency to experience a particular mood or to react to things with certain emotions The two dominant dimensions of mood are positive affect, which reflects a combination of high energy and positive evaluation characterized by emotions like elation, and negative affect, which comprises feelings of being upset, fearful, and distressed.  Positive and negative affect are not opposites, but are two distinct dimensions. Affect tends to be somewhat dispositional and fairly stable over time. Negative affect is related to lower organizational citizenship behaviors, greater withdrawal and counterproductive work behaviors, lower job satisfaction, and greater injuries. Higher positive affect is related to increased creativity, openness to new information, and efficient decision making. Positive affectivity also increases the likelihood of cooperation strategies in negotiations, improving the results. III. PERCEPTION IN ORGANIZATIONS Perception is the set of processes by which an individual becomes aware of and interprets information about the environment People perceive the same things in very different ways. Moreover, people often assume that reality is objective and that we all perceive the same things in the same way. Since perception plays a role in a variety of workplace behaviors, managers should understand basic perceptual processes. Through perceptual processes, the receiver assimilates the varied types of incoming information for the purpose of interpreting it. A. Basic Perceptual Processes Two basic perceptual processes are particularly relevant to managers—selective perception and stereotyping. 1. Selective Perception Selective perception is the process of screening out information that we are uncomfortable with or that contradicts our beliefs. 2. Stereotyping Stereotyping is categorizing or labeling people on the basis of a single attribute. Certain forms of stereotyping can be useful and efficient. Common attributes from which people often stereotype are race and sex. Of course, stereotypes along these lines are inaccurate and can be harmful. B. Errors in Perception As you might expect, errors may creep into how we interpret the things we perceive. Stereotyping and selection perception are often the underlying causes of these errors, but other factors may also come into play. Perception shortcuts, for example, may play a role. One perception shortcut is categorization, which reflects our tendency to put things into groups or categories. We then exaggerate the similarities within and the differences between the groups. After we put people into categories, selective perception leads to selectively interpreting what we see based on our interests, expectations, experience, and attitudes. Selective perception reinforces stereotypes as the perceiver focuses on information and behaviors that confirm rather than negate the assigned stereotype. Managers need to be aware of this bias in order to evaluate subordinates more objectively and accurately. The halo effect is when we form a general impression about something or someone based on a single (typically good) characteristic. The contrast effect occurs when we evaluate our own or another person’s characteristics through comparisons with other people we have recently encountered who rank higher or lower on the same characteristics. Projection occurs when we project our own characteristics onto other people. First impression bias may also be relevant. Research has found that not only do we tend to avoid people after we have had a negative reaction to, but also negative impressions are harder to change than positive ones. First impressions are formed quickly. Once we form wrong impressions, they are likely to persist. Our impressions and expectations of others also can become self-fulfilling prophecies. If we categorize a person as untrustworthy, we are likely to treat that individual with suspicion and distrust. These actions then evoke appropriate guarded reactions from the other person, whose reactions serve to confirm our initial impressions. C. Perception and Attribution Attribution refers to the way we explain the causes of our own as well as other people’s behaviors and achievements, and understand why people do what they do. We rely on three rules to evaluate whether to assign an internal or an external attribution to someone’s behavior or outcome: 1. Consistency – leads to internal attributions 2. Distinctiveness – low distinctiveness leads to internal attributions 3. Consensus – a low consensus points to internal attributions A related aspect of attribution is self-handicapping. Self-handicapping occurs when people create obstacles for themselves that make success less likely. Examples include using drugs and alcohol, refusing to practice, and reducing effort. These behaviors may sound silly, but they are very real and serve to protect the person’s sense of self-competence. Focusing on effort attributions and developing feelings of self-efficacy help overcome this behavior. Attributing success to internal causes builds self-efficacy and increases the motivation to try hard and persist in the face of failure. D. Perception and Fairness, Justice, and Trust Perception and perceptual processes play a major role in how people feel about fairness, justice, and trust. In organizations, perceptions of unfairness (also referred to as injustice) can exist in numerous situations such as layoffs and downsizings, hiring and promotion decisions, union negotiations, and even simple organizational change. The term organizational fairness refers to employees’ perceptions of organizational events, policies, and practices as being fair or not fair. Why should you care about fairness? You should care because perceptions of fairness affect a wide variety of employee attitudes and behaviors including satisfaction, commitment, trust, and turnover. A number of negative behaviors can result from perceptions of unfairness, including theft, sabotage, and other unethical behaviors. Perceived unfairness also increases the chances that employees will file lawsuits against their employers. As a manager, it is critical to remember that it is insufficient to just be fair; you must also be perceived as fair by your subordinates. Understanding fairness is important for ethical reasons as well. Failure to meet employees’ fairness expectations can lead them to engage in unethical behavior. 1. Distributive Fairness  Distributive fairness refers to the perceived fairness of the outcome received, including resource distributions, promotions, hiring and layoff decisions, and raises. Distributive fairness relates only to the outcome received, not to the fairness of the process that generated the decision. 2. Procedural Fairness Procedural fairness addresses the fairness of the procedures used to generate the outcome. Why does procedural fairness matter so much? There are two reasons. First, employees use perceptions of the current decision-making procedures to predict how they will likely fare in the organization in the future. Second, fair procedures signal that employees are valued and accepted by the organization. 3. Interactional Fairness Interactional fairness is whether the amount of information about the decision and the process was adequate, and the perceived fairness of the interpersonal treatment and explanations received during the decision-making process. Deception or abusive words or actions can be seen as having low interactional fairness. Interactional fairness describes two specific types of interpersonal treatment. The first type is interpersonal fairness, which reflects the degree to which people are tr