BI: Leadership and Organisational Behaviour PDF

🎓 BI: Leadership and Organisational Behaviour EXAM DATES: LECTURE 1 → CH 1 WHAT IS OB? OB → Organizational Behaviour (OB) studies the impact of individuals, groups, and structure on employee behavior to improve organization...

🎓 BI: Leadership and Organisational Behaviour EXAM DATES: LECTURE 1 → CH 1 WHAT IS OB? OB → Organizational Behaviour (OB) studies the impact of individuals, groups, and structure on employee behavior to improve organizational effectiveness. INTERPERSONAL SKILLS → Managers need strong interpersonal skills to be effective, as workplaces ranked as good places to work correlate with managers having good interpersonal skills. Good interpersonal skills helps with; BI: Leadership and Organisational Behaviour 1  a) understanding the significance of the quality of a job. b) creates low stress environment. c) creates higher job security. Organisations: → An organisation is a consciously coordinated social unit that functions on a relatively continuous basis and is composed of two or more people to achieve a common goal. Manager: → A manager is an individual that fulfills goals through other people. In order to attain those goals they direct the activities of others, allocate the resources and make key decisions. MANAGEMENT ACTIVITIES (POLC): Management activities include planning, organizing, leading, and controlling (POLC), which are crucial for achieving organizational goals 1. Planning = define organisational goals and establishment of an overall strategy for achieving those goals. Coordination of activities should be supported by a comprehensive set of plans. The amount of planning increases while going by the managerial promotions. 2. Organising = process of designing the structure of an organisation (what tasks should be done, who will do them, who reports what and so on) 3. Leading = management’s task to coordinate, direct and motivate employees, while maintaining effective communication and resolving conflicts. 4. Controlling = function of comparing an organisation’s set goals with its performance to see if these goals have been accomplished. If there are any deviations, the managers must correct them. MANAGEMENT ROLES: HENRY MINTZBERG → based on the study it can be concluded that managers perform 10 different, highly related roles, which could be categorised into these 3 groups: interpersonal, informational and decisional roles. INTERPERSONAL ROLES → figurehead (symbolic head of legal or social nature), leader (motivation/coordination) & liaison (networking to gain favour) INFORMATIONAL ROLES → all managers collect information from outside organisations and institutions. This is done by scanning the news media & talking to others to find out new tendencies and information about competitors. DECISIONAL ROLES → 4 roles in decision making (nRED): 1) entrepreneur = new projects to improve performance 2) disturbance handlers = corrective action in response to unforeseen problems 3) resource allocators = allocating human, physical, and monetary resources 4) negotiator = agreements with other external/internal units to gain advantage. → SKILLS BI: Leadership and Organisational Behaviour 2  R. Katz defined three different categories of management skills: Technical skills = ability to apply specialised knowledge or expertise People skills = reflect the ability to understand, work with and motivate people / groups of people Conceptual skills = show the mental ability to analyse and diagnose complex problems. → Effective versus successful managerial activities Managers engage in four categories of managerial activities: 1. Traditional management = revolved around decision making, planning and controlling 2. Communication = exchanging of information and processing paperwork 3. Human resource = includes motivating, disciplining, conflict management and training 4. Networking = this includes socialising and interacting with outsiders. Successful managers spend most of their time networking. However, effective managers concentrate on communication activities. → Summing up the manager’s job section, it is clear that managers need to develop people skills if they desire to be effective and successful and this can be done by improving interpersonal skills regardless of whether it is called “the leading function”, “interpersonal roles” , “human skills” etc. → COMPLEMENTING INTUITION WITH SYSTEMATIC STUDY: Within the systematic approach, important facts and relationships will be uncovered which aid in making more accurate predictions of behaviour. There are certain fundamental consistencies underlying the behaviour of all individuals that can be identified and then modified to reflect individual differences. This is important as it allows more concrete predictions. BI: Leadership and Organisational Behaviour 3  💡 Systematic study → is the process of looking at relationships, attempting to attribute causes and effects, and basing our conclusions on scientific evidence. 💡 Evidence-based management (EBM) → is an approach that complements systematic study and involves managerial decisions based on the best available scientific evidence. Where does intuition come into play? → Systematic study and EBM add to intuition, or those "gut feelings" about "why I do what I do" and "what makes others tick". Since one tends to overestimate the accuracy of what we think we know, the limits of relying on intuition are made worse. A person should enhance the intuitive views of behaviour with systematic analysis to improve the accuracy in explaining and predicting behaviour. It is advised to use evidence as much as possible to inform your intuition and experience. OB Disciplines The disciplines that contribute to the development of the behavioral science of organisational behaviour are psychology, social psychology, sociology and anthropology. → Psychology is involved in the measurement and the explanation of behaviour of humans and other animals; → Social psychology is a field of psychology that combines elements from both psychology and sociology and investigates the influence of people on one another; → Sociology focuses on the relation between the behaviour of people and their environment; → Anthropology is the study that focuses on societies and humans in relation to their activities. BI: Leadership and Organisational Behaviour 4  → OB in a changing world. What are the challenges? There are practically no universal principles which would be able to explain organisational behaviour, because human beings are complex and two people can react differently to the same situation. However, OB concepts must reflect situational or contingency conditions. They are basically governed by contingency variables which are situational factors which moderate the relationship between two or more variables. E.g. we can say that “x" leads to "y” but only under the: 🌀 Evidence indicates that balancing work and life demands now surpasses job security as an employee priority. Students say that attaining a balance between work and personal life is a primary career goal. OB supplies a number of suggestions to guide managers in designing workplaces and jobs that can help employees deal with work-life conflicts. → Work environment Some organisations are trying to create a competitive advantage by fostering a positive work environment. A real growth area in OB research has been positive organisational scholarship. This area concerns the way organisations develop human strength, foster vitality and resilience, and unlock potential. This doesn't mean there are no challenges. However, the focus is on the positive side and the possibility of improving employees' strength. → Ethical behaviour Employees face BI: Leadership and Organisational Behaviour 5  ethical dilemmas, which are situations during which they must define right and wrong conduct. The confidence and trust of employees in management has decreased dramatically and employees are uncertain about appropriate ethical behaviour in their organisations. Managers need to ensure ethical behaviour in all practices of the organisation. Therefore, they can take the following actions: 1. Writing and distributing codes of ethics to guide employees 2. Offering seminars, workshops and other training programs 3. Providing in-house advisors, who can be contacted (anonymously) for assistance in dealing with ethical issues 4. Creating protection mechanisms for employees who reveal internal unethical practices. SUMMARY: Managers should create ethically healthy environment for their employees, in which they can work productively with minimal confrontation in respect to right and wrong behaviour. Developing an OB model → A model is an abstraction of reality, a simplified representation of some real-world phenomenon. A model basically has inputs, processes and outcomes. The basic OB model contains three levels: individual, group and organizations system one. The three basic levels are comparable to building blocks; each level is constructed on the basis of the previous level. BI: Leadership and Organisational Behaviour 6  The dependent variable 🌀 A dependent variable is a response that is affected by an independent variable. The primary dependent variables in OB are: productivity, absenteeism, turnover and job satisfaction Productivity is defined as a performance measure that includes effectiveness and efficiency. → Effectiveness stands for achievement of goals, whereas efficiency is the ratio of effective output to the input required to achieve it. → Absenteeism is defined as the failure to report work. → Turnover is the voluntary and involuntary permanent withdrawal from an organisation. → Job Satisfaction is a positive feeling about one's job resulting from an evaluation of its characteristics. Deviant workplace behaviour is the voluntary behaviour that violates significant organisational norms and, in so doing, threatens the well-being of the organization or its members. Last but not least, organisational citizenship behaviour (OCB) – discretionary behaviour that is not part of an employee's formal job requirements, but still promotes the effective functioning of the organisation. What are the major elements of productivity, absenteeism, turnover and so on? → The answer to that question introduces us to the independent variables. An Independent variable is the presumed cause of some change is a dependent variable. The model below illustrates six key dependent variables and a large number of independent variables, structured by level of analysis, that research indicates have varying effects on the former. BI: Leadership and Organisational Behaviour 7  Outcomes → Outcomes = key variables that are predicted or achieved at the end of a model. These outcomes can be different in relation to the effect of various variables on them. We will look at the possible outcomes listed in the basic OB model above in three different levels; individual, group and organisational. 1) Individual Level Attitudes are the basic evaluations an employee makes; these could be positive or negative and on a range of topics. → Stress is an unpleasant psychological experience that occurs to the employee due to response to work environment pressures. → Task Performance is effectiveness and efficiency combined when employees are performing core tasks. → Citizenship Behaviour consists of discretionary actions that contribute to a good psychological and social work environment. → Withdrawal Behaviour is when actions are taken by employees to separate themselves from the organisation. 2) Group Level Group Cohesion is the extent to which members of a group can work with each other without conflict and validating other views. → Group Functioning is measured by the quantity and quality of the work which the group does. 3) Organisational Level Productivity is very similar to task performance and measures the effectiveness and efficiency of an organisation. → Survival is achieved when the organisation is able to exist and grow over the long term. Fundamental attribution error → the tendency to explain the behaviour of others based on overemphasizing personal characteristics and ignore situational factors in judging others' behaviour. PESTLE = Political, Economical, Social, Technological, Legal and Ecological Context CONCLUSION (!!!) 🎀 Managers need to develop interpersonal skills to be effective in their jobs. OB investigates the impact that individuals, groups and structures have on behaviour in an organisation. Specifically, it looks to improve areas like productivity, reducing absenteeism and increase Organisational Citizenship Behaviour and Job satisfaction. BI: Leadership and Organisational Behaviour 8  LECTURE 2 → CH 16 16.1 What Is Organizational Culture? 🎀 Organisational culture is a system of shared values, beliefs, and assumptions that shape how members perceive and experience their organization. It is descriptive (how employees see the organization) rather than evaluative (how they feel about it). Types of Organisational Cultures (Competing Values Framework): 1. Clan Culture: A culture based on human affiliation. Focuses on collaboration, trust, and support. (enhance customer service) 2. Adhocracy Culture: A culture based on change. Values innovation, growth, and autonomy. (best for profitability and growth) 3. Market Culture: A culture based on achievement. Prioritizes competition, achievement, and communication. (enhance customer service) 4. Hierarchy Culture: A culture based on stability. Emphasizes stability, routines, and formal structures. (best for profitability and growth) Uniform vs. Diverse Cultures: Dominant Culture: Core values shared by most employees, giving the organization its unique identity. Subcultures: Form within departments or groups and can sometimes challenge the dominant culture, but they rarely undermine it entirely. Strong vs. Weak Cultures: Strong Culture: Employees are united by shared values, which increases loyalty, cohesion, and commitment. Strong cultures are linked to better performance and success, even in competitive markets. Weak Culture: Employees have varying opinions about the organization’s values, resulting in less alignment and a weaker influence on behavior. ADVANTAGES OF A STRONG CULTURE creates and supports company’s mission, vision and values unique brand image guides all members, directing towards common goals. promotes healthy relationships between employees. attracts and retains high-performing applicants, reduces turnover DISADVANTAGES difficult to adjust at times of environmental change may be resisted bt some employees with resultant effects on their performance common view reduces critical thinking resulting in unethical behaviour. reduces diversity by attracting similar-minded applicants → reducing creativity BI: Leadership and Organisational Behaviour 9  Key Takeaways for Exams: Organizational culture influences behavior, performance, and loyalty within an organization. Strong cultures result in high employee commitment and better outcomes, while weak cultures create inconsistent behavior. Four main culture types (clan, adhocracy, market, hierarchy) each have distinct effects on organizational success. Subcultures can exist within organizations but usually do not threaten the dominant culture unless they become very strong. 16.2 How Employees Learn Culture 🎀 Organizational culture is passed down to employees through several key forms, including stories, rituals, material symbols, and language. (SSRL) Stories Purpose: Stories help connect the present to the organization's past and validate current practices. Effect: Stories motivate and inspire employees by embedding the culture's values in emotionally charged and transformational narratives. Rituals Definition: Rituals are repetitive actions that reinforce an organization’s core values, showing what is important and who matters in the organization. Function: Rituals create a sense of control, reduce anxiety, and help employees feel connected to the organization's values. Symbols Definition: Material symbols, also known as artifacts, are physical representations of the organization’s values, hierarchy, and expectations. Effect: Symbols convey important cultural values such as innovation, egalitarianism, or authority and help create emotional connections among employees. Language Purpose: Language helps members of an organization identify with and reinforce the culture. It includes specific terminology, acronyms, and jargon unique to the organization. Effect: Language can unite members and reflect the organization's values, but it can also be used to mask unethical behavior or reinforce discrimination. Key Takeaways for Exams: Stories, rituals, symbols, and language are critical tools for transmitting organizational culture. Stories connect employees to the company’s values and motivate them by reflecting cultural heroes or defining moments. Rituals reinforce values by making them part of daily or regular activities. Material symbols convey the organization's priorities, power structures, and cultural traits. Language can both unify members and reflect deeper values, but it can also be used to manipulate or discriminate. 16.3 !!! Creating and Sustaining Organizational Culture !!! BI: Leadership and Organisational Behaviour 10  How Culture Begins: 1. Founders’ Influence: Vision: Founders start with a vision for the organization. Hiring: They hire and retain employees who share their values. Socialisation: New hires are trained to adopt the founders’ values and behaviors. Behavior: Founders' actions and success embed their traits into the culture. What are the primary ways of maintaining organisational culture? Sustaining Culture: 1. Selection Practices: Fit: Hiring focuses on aligning new employees' values with the company’s culture. Example: W. L. Gore’s rigorous hiring ensures candidates match their culture of flexibility and teamwork. 2. Top Management: Impact: Leaders set cultural norms through their behavior and decisions. Example: Wegmans' top management fosters a supportive culture through high employee pay and educational support. 3. Socialization: Process: Prearrival: New employees bring their own values and expectations. Encounter: New hires face and adjust to real organizational norms. Metamorphosis: Newcomers fully adapt and align with organizational culture. 16.4 Functions of Organizational Culture 1. Boundary-Defining Role: Culture differentiates one organization from another by establishing a distinct identity. 2. Sense of Identity: It helps members feel part of something greater than individual interests, fostering a shared sense of belonging. 3. Commitment: It promotes dedication to organizational goals and values, which can enhance loyalty and engagement. 4. Stability: Provides consistency in behavior, serving as a stabilizing force and maintaining organizational cohesion. 5. Sense-Making and Control: Guides employees' attitudes and behaviors, impacting how they interpret and react to situations within the organization. Culture and Climate Organizational Climate: Refers to members' shared perceptions of the work environment, influenced by policies, practices, and procedures. BI: Leadership and Organisational Behaviour 11  Positive climates correlate with higher job satisfaction, involvement, commitment, and improved organizational performance. Relationship between Culture and Climate: Culture, being at the core, influences the climate (surface manifestations). For example, a “safety culture” would manifest in practices and policies that prioritize safety. Climates reflect how culture is enacted and perceived, affecting behaviors and organizational outcomes. Impact of Organizational Culture 1. Positive Aspects: Ethical Cultures: Promote clear ethical standards and supportive behaviors, reducing burnout and enhancing engagement. Sustainable Cultures: Focus on long-term practices, resource efficiency, and social sustainability, leading to improved reputation and performance. Innovative Cultures: Encourage creativity and adaptability, often seen in startups and companies like Google or Netflix. 2. Potential Liabilities: Stagnation and Entrenchment: Cultures that resist change can hinder organizational adaptability, as seen in Old Navy’s struggles with innovation. Uniformity and Rigidity: Strong cultures may suppress diversity and new perspectives, potentially leading to issues with inclusivity and adaptability. Toxicity and Dysfunctions: Cultures centered on negative values (e.g., abuse, harassment) can severely impact employee well-being and organizational effectiveness. Culture Clashes: Mergers and acquisitions can fail when the cultures of the merging entities are incompatible, often leading to poor integration and performance outcomes. Summary Organizational culture plays a crucial role in shaping employee behavior, guiding decision-making, and influencing overall organizational effectiveness. While a strong, positive culture can drive success and enhance employee satisfaction, a negative or toxic culture can have detrimental effects. The impact of culture on organizational performance underscores the importance of aligning cultural values with organizational practices and adapting culture as needed to respond to changing environments and challenges. 16.5 Influencing Organizational Cultures Understanding Organizational Culture Organizational culture often emerges organically rather than being meticulously planned by founders. This culture, influenced by various factors and individuals over time, can be challenging to alter. However, recognizing that culture is a dynamic and evolving entity provides opportunities for shaping and enhancing its positive and ethical aspects. Developing a Positive Culture 1. Building on Employee Strengths Identifying Strengths: Positive cultures focus on recognizing and leveraging employees' strengths rather than just addressing weaknesses. This approach enhances engagement and performance. BI: Leadership and Organisational Behaviour 12  Practical Steps: Implement tools and programs to help employees discover and utilize their strengths. For instance, coaching and development initiatives can assist in aligning individual skills with organizational needs. 2. Rewarding More Than Punishing Importance of Praise: Emphasizing recognition over punishment fosters a more positive environment. Regular, genuine praise and recognition can significantly boost motivation and performance. Effective Practices: Create systems to acknowledge and reward achievements, both big and small. This includes informal praise and structured reward programs. 3. Encouraging Vitality and Growth Career Development: Cultivate an environment where employees see their roles as part of a broader career path, not just a job. Support professional and personal growth to enhance overall job satisfaction and productivity. Development Programs: Invest in talent development initiatives that offer training, mentorship, and career advancement opportunities. Limitations of Positive Cultures Cultural Fit: The effectiveness of a positive culture can vary depending on the industry and societal norms. What works well in one context might not be as effective or appropriate in another. Toxic Positivity: Overemphasis on positivity can become counterproductive, creating unrealistic expectations and psychological stress. Ensure that positivity is balanced and realistic to avoid negative consequences. Developing an Ethical Culture 1. Be a Visible Role Model Leadership Example: Ethical behavior starts at the top. Leaders should model ethical conduct to set a standard for others in the organization. Visibility: Regularly demonstrate commitment to ethical principles through actions and decisions. 2. Communicate Ethical Expectations Code of Ethics: Clearly articulate the organization’s values and ethical standards. Ensure that all employees understand the expectations and guidelines for ethical behavior. 3. Provide Ethical Training Educational Programs: Implement training sessions to educate employees about ethical standards, potential dilemmas, and how to handle them. Continuous Learning: Regularly update training materials and offer refresher courses to keep ethical standards top-of-mind. 4. Reward Ethical Behavior Recognition and Accountability: Reward employees who demonstrate ethical behavior and address unethical actions promptly and visibly. Evaluate performance based on adherence to ethical standards. 5. Provide Protective Mechanisms Reporting Channels: Establish formal mechanisms for reporting unethical behavior, such as hotlines or ombuds offices, to protect whistleblowers and address concerns confidentially. Developing an Innovative Culture 1. Sources of Innovation Structural Variables: Organic structures, contingent rewards, slack resources, and high interunit communication facilitate innovation. These elements support flexibility, creativity, and cross-functional collaboration. 2. Context and Innovation Cultural Impact: National and local cultural norms affect innovation. Encourage cultural diversity and openness to new ideas to foster an innovative environment. 3. Characteristics of Innovative Organizations Experimentation and Learning: Promote experimentation, celebrate successes and failures, and maintain a cohesive, supportive culture that encourages innovation. BI: Leadership and Organisational Behaviour 13  HR Systems: Use human resources practices to support innovation, including training, job security, and fostering a culture of change. 4. Idea Champions Role of Champions: Idea champions are crucial for promoting and implementing new ideas. They are characterized by high self-confidence, persistence, and transformational leadership qualities. Support and Autonomy: Provide idea champions with the resources and decision-making authority to pursue and implement innovations effectively. Ensure that the organizational context supports their efforts. By focusing on these aspects, organizations can create and sustain positive, ethical, and innovative cultures that drive long-term success and employee satisfaction. 16.6 Change Management in Organizations Understanding Change 🎀 Change in an organization refers to the process of making things different from how they were. This could involve shifts in organizational structure, strategies, or processes, and can be driven by external factors like market dynamics or internal efforts for improvement. The Role of Change Agents → These individuals or groups possess a vision for the future of the organization and drive the transformation process. They can be internal employees or external consultants and play various roles at different stages of change. For example, formal leaders might steer initial phases, while peer change agents may support long-term adoption. Effective change agents motivate, invent, and lead the vision through the complexity of organizational change. Resistance to Change → Resistance is a natural response to change, often arising from fear or discomfort about the unknown. It can manifest in overt forms like complaints or covert forms like decreased morale or productivity. → Understanding the sources of resistance—whether individual characteristics or organizational structures—is crucial for addressing it effectively. Resistance may not always be immediately apparent and can sometimes be deferred, making it challenging to link directly to the change efforts. Strategies for Overcoming Resistance 1. Communication: Ensure clear, transparent communication about the change, framing it positively to build commitment and reduce anxiety. 2. Participation: Involve employees meaningfully in the change process to enhance their support and improve decision quality. 3. Building Support: Foster emotional commitment through training and a supportive organizational climate. 4. Developing Relationships: Build trust between employees and change agents to facilitate smoother transitions. 5. Fair Implementation: Ensure changes are applied consistently and transparently to maintain trust and avoid perceptions of unfairness. 6. Manipulation and Cooptation: Use cautiously, as these tactics can backfire if seen as deceitful. 7. Selecting Adaptable People: Hire individuals with traits like flexibility and emotional stability to ease the change process. 8. Coercion: Use as a last resort, recognizing it may lead to negative outcomes and should be avoided if possible. The Politics of Change BI: Leadership and Organisational Behaviour 14  Change often entails political maneuvering, as it challenges the status quo and redistributes power. Those entrenched in the existing structure may resist radical changes, favoring incremental adjustments instead. Consequently, organizations facing the need for significant change may seek leadership from outside to overcome internal resistance and drive the transformation. To summarise: In summary, managing change effectively requires a strategic approach to communication, participation, support, fairness, and relationship-building. Change agents must navigate resistance carefully and understand the political dynamics at play to lead successful transformations. 16.7 Approaches to Managing Organizational Change Comparison of Four Approaches to Managing Organizational Change 🎀 Approaches: Lewin’s Three-Step Model, Kotter’s Eight-Step Plan, Action Research, Organizational Development (OD) 1. Lewin’s Three-Step Model: Overview: Kurt Lewin's model focuses on a simplified framework for managing change through three phases: unfreezing, movement, and refreezing. Strengths: Simple and Clear: Provides a straightforward structure for understanding and implementing change. Focuses on Stabilization: Emphasizes the importance of making new changes permanent by refreezing them into the organization's culture. Weaknesses: Sequential Assumption: Critics argue that change does not always occur in a linear, sequential manner. Idealistic: Assumes that managers have perfect knowledge and control over the change process, which may not be realistic. Dynamic Environment: The concept of "freezing" may be problematic in a constantly evolving organizational environment. 2. Kotter’s Eight-Step Plan: Overview: John Kotter’s approach builds on Lewin’s model by providing a detailed, eight-step process for leading change, emphasizing overcoming common mistakes in change management. Steps: 1. Create a Sense of Urgency: Highlight the need for change. 2. Form a Powerful Coalition: Build a team to guide and support the change. 3. Create a Vision for Change: Develop a clear vision and strategy. 4. Communicate the Vision: Ensure that the vision is communicated effectively. 5. Remove Obstacles: Address barriers and empower employees to act. 6. Create Short-Term Wins: Generate visible improvements to build momentum. BI: Leadership and Organisational Behaviour 15  7. Build on the Change: Use early successes to drive further change. 8. Anchor the Changes in Corporate Culture: Ensure that the changes are embedded in the organization’s culture. Strengths: Detailed Guidance: Offers a comprehensive framework for managing change. Focus on Communication and Culture: Stresses the importance of effective communication and embedding change into organizational culture. Weaknesses: Rigidity: The step-by-step approach might be too rigid for some organizations. Time-Consuming: The process can be lengthy, which might not suit fast-paced environments. 3. Action Research: Overview: Action research is a data-driven approach to change that involves diagnosing problems, gathering data, and implementing solutions based on findings. Steps: 1. Diagnosis: Identify and understand the problems. 2. Analysis: Analyze data to find patterns and root causes. 3. Feedback: Share findings with stakeholders. 4. Action: Implement changes based on the analysis. 5. Evaluation: Assess the effectiveness of the changes. Strengths: Data-Driven: Relies on systematic data collection and analysis, making it evidence-based. Involves Employees: Engages employees in diagnosing and solving problems, which can reduce resistance. Weaknesses: Complexity: Requires substantial data collection and analysis, which can be time-consuming. Resistance to Participation: Some organizations may be resistant to the transparency and involvement required. 4. Organizational Development (OD): Overview: OD encompasses a variety of methods focused on improving organizational effectiveness and employee well-being through participative processes and collaborative efforts. Techniques: Process Consultation: Assists organizations in understanding and improving processes through collaboration. Team Building: Enhances team performance through high-interaction activities. Intergroup Development: Aims to improve relations between different groups within the organization. Appreciative Inquiry: Focuses on identifying and building on the organization’s strengths rather than fixing problems. Strengths: Holistic Approach: Emphasizes humanistic values and collaborative problem-solving. Flexibility: Adapts to various organizational contexts and issues. Weaknesses: Varied Outcomes: Results can be inconsistent depending on the context and execution. Resource Intensive: Can require significant time and resources, particularly for team building and intergroup development. Summary of Key Differences Focus and Complexity: BI: Leadership and Organisational Behaviour 16  Lewin’s Model and Kotter’s Plan offer structured, somewhat linear approaches to change but may struggle with dynamic environments. Action Research provides a scientific, iterative process that engages employees, making it adaptable but potentially complex. OD employs a range of techniques tailored to humanistic values and collaborative processes, which can be flexible but resource-intensive. Engagement and Participation: Action Research and OD emphasize involving employees in the change process, which can help reduce resistance but may face challenges in organizations reluctant to participate. Lewin’s Model and Kotter’s Plan typically involve more top-down approaches, though Kotter’s Plan includes steps for broad communication and coalition-building. Each approach has its unique strengths and challenges, and the choice of method may depend on the specific needs and context of the organization undergoing change. LECTURE 3 → CH 7 & 8 Motivation and Self Leadership 💗 Motivation = processes that account for an individual’s intensity, direction & persistence of effort towards attaining a goal. Focuses on three key elements: (IDP) 1. Intensity: the degree of effort to achieve something. 2. Direction: effort should benefit the organisation and be channelled in the direction of achieving organisation goal. 3. Persistence: the chronological period that a person can maintain their efforts to achieve a goal. Note: In general, the level of motivation is different among individuals and may vary at different times. MAIN THEORIES OF MOTIVATION: BI: Leadership and Organisational Behaviour 17  Content theories of motivation focus on the internal factors of motivation (both physiological and psychological) Context (environmentally-based) theories focus on external factors of motivation that stem from the contexts people find themselves in. Process theories attempt instead to determine how factors of motivation interact with each other to produce the behavior (very often the interaction is explained by a “formula”). 1. Maslow’s hierarchy of needs (content): suggests that every person has a hierarchy of five different needs: physiological needs, safety & security, love & belonging, self-esteem and self-actualisation. → According to Maslow, a satisfied need does not motivate and the next need becomes dominant. At first, people satisfy needs that are on the bottom of the pyramid and then move upwards to satisfy the rest of their needs. → Managers should identify the level of needs of their employees and try to satisfy needs of the same or higher level to ensure employee motivation. Maslow’s hierarchy of needs → Physiological needs & safety are described as lower-order needs, since they are satisfied by external factors. Self- esteem & self-actualisation (the drive to become what a person is capable of becoming) needs are described as higher- order needs, since they are satisfied by internal factors. 2. Two-factor theory (content): developed by F. Herzberg and suggests that intrinsic factors (i.e. achievement) increase job satisfaction and extrinsic factors (i.e. supervision, salary) increase job dissatisfaction. Thus, there is a distinction between factors that lead to job satisfaction and job dissatisfaction. There is a dual continuum; the opposite to satisfaction is lack of satisfaction and the opposite of dissatisfaction is lack of dissatisfaction. → The extrinsic factors are also categorized as hygiene factors, and they lead to lack of dissatisfaction when they are adequate. These factors - such as company policy & administration, supervision & salary - placate (patenkina) workers, as long as they are adequate (tinkami). → However, significant criticisms have been developed regarding this theory: its methodology, the measure of levels of satisfaction & the assumed relationship between satisfaction and productivity. How is this theory utilized to motivate and satisfy employees within the following theory? !!! Important theory 3. Self-determination theory (SDT) & (content): developed by Deci and Ryan. According to SDT, people have 3 innate psychological (cognitive) needs: → autonomy → competence → relatedness When all three needs are satisfied, motivation, work performance and wellness increase. All three needs are necessary for intrinsic motivation to develop: BI: Leadership and Organisational Behaviour 18  → Intrinsic motivation leads to less stress, burnout and higher job satisfaction and commitment. → Job autonomy predict company profitability → Management support for employee autonomy is important. NOTE: Self-determination theory also suggests that, when part of your pay depends on your performance, that can lower your intrinsic motivation. Extrinsic rewards might buy compliance, but they do not encourage commitment. 4. Basic psychological need perspective (content): closely related to SDT, but focuses more specifically on how these needs impact work motivation and job outcomes. It places extra emphasis on autonomy for employee satisfaction and competence for job performance, applying the ideas of SDT directly to workplace settings. → Autonomy, the most critical for attitudinal outcomes, reflects the desire to feel in control and free in decision-making. → Competence: relates to the need to feel skilled and proud of one's work, which strongly predicts performance. → Relatedness: reflects the need to connect positively with others. Managers can motivate employees by designing jobs that support these needs, offering recognition, and promoting employee development, especially during onboarding. This leads to higher motivation, satisfaction, and commitment in the workplace. 5. Expectancy theory (process): This theory states that the strength of a tendency to 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. The theory focuses on three relationships: → Effort-performance relationship: the probability perceived by the individual that the certain amount of effort will lead to a performance. → Performance-reward relationship: is the degree to which the individual believes that performing at a particular level will lead to the attainment of a desired outcome. → Rewards-personal relationship: is the degree to which organisational rewards satisfy an individual’s personal goals or needs and the attractiveness of those potential rewards for the individual. OTHER THEORIES: BI: Leadership and Organisational Behaviour 19 BI: Leadership and Organisational Behaviour 20  1. Social Learning Theory (context): the view that we can learn through both observation and direct experience. → Individuals learn by observing others and modeling their behavior. In organizations, employees mimic their supervisors' actions, including leadership styles and work ethics. If leaders act unethically or neglect their duties, employees often follow suit, and team members rarely compensate for absent leadership. → NOTE: for more check the document under OB in good notes. FROM CONCEPTS TO APPLICATIONS: Job characteristic model: → this model suggests that every job can be described based on five core dimensions: Skill variety: degree to which a job requires a variety of different activities. Task identity: the degree of an identifiable piece of work to which a job requires completion of a whole. Task significance: the degree to which a job has a substantial impact on the lives of other people. BI: Leadership and Organisational Behaviour 21  Autonomy: the degree to which individuals can schedule their work and determine the procedures they are going to use to perform their tasks (a degree to which a job provides substantial freedom and independence). Feedback: the degree to which clear and direct information about the effectiveness of the performance of individuals is provided. → This model suggests that individuals obtain internal rewards when they learn that they performed well on a task they care about. Core dimensions can be used to determine a single predictive index, namely the motivating potential score (MPS): How can jobs be redesigned? → Several jobs redesigning methods have been developed to make jobs more appealing to existing and prospective employees. As a result of these practices, the employees are involved in the process of continuous learning, which boosts the motivation and interest in their job. 1. Job rotation: is the periodic shifting of an employee from one task to another. Job rotation can be applied if a work situation is characterized by routine tasks and boredom. This technique reduces boredom, increases motivation & helps employees better understand how they can contribute to the organisation and its goals. → however: it increases training costs, reduces productivity & increases disruptions, as employees have to adjust to new working responsibilities and learn how to perform new tasks. 2. Job enrichment: process of increasing the degree to which an employee is responsible for the planning, execution and evaluation of the work. This technique is the vertical expansion of jobs, allows individuals to perform freedom and independence within the workplace. While jobs are being redesigned, it is likely that work will become more intrinsically motivating to people. Methods include: Connecting employees with the beneficiaries of their work. Making them feel valued. ALTERNATIVE WORK ARRANGEMENTS: → The development of alternative work arrangements is a way to increase the level of motivation of employees. For example: flexitime, job sharing or teleworking. These alternative work arrangements are likely to be important for a diverse workforce such as single parents, dual-earner couples and employees worrying about sick/ageing relatives. Flexitime: flexible work hours based on personal needs and responsibilities. Individuals must work for a pre-specific number of hours every week. However, they are able to decide when they are going to arrive to work and leave the workplace, and they are also able to vary the hours of work within certain limits. Job sharing: arrangement that allows two or more individuals to split a traditional 40 hour a week job. Although job sharing is available in some organisations, a low number of employees choose to adopt job sharing, since it is very difficult to find compatible partners. → However, it does increase the levels of motivation and satisfaction of some employees. Job sharing is also useful for employers, since they can rely on the talents of two or more people in a job and hire skilled workers who are not able to work full-time. Teleworking: employees work mainly from their home or mainly from different places using their home as a base and use both a telephone and a computer to perform their work tasks. Teleworking increases the flexibility and BI: Leadership and Organisational Behaviour 22  independence of employees. However, teleworking reduces job satisfaction and increases feeling of isolation, as employees do not interact with their colleagues and do not usually enjoy raises and promotions. For management, teleworking usually reduces the level of supervision of employees and the ability to coordinate teamwork. Employee involvement: → There are three major types of employee involvement: Participative management → a joint decision-making procedure takes place. Employees are able to contribute significantly to the decision-making process along with their immediate superiors. Representative participation → employees are represented by a small group of employees in organisational decision- making processes. These groups are usually elected by councils or board representatives. BI: Leadership and Organisational Behaviour 23 BI: Leadership and Organisational Behaviour 24  LECTURE 4 → CH 9 & 10 Group team psychology / Work Climate Issues / Power & Influences 9.1 Defining & Classifying groups Groups = defined as two or more individuals that are interacting and show interdependence to achieve particular objectives. Groups are divided into formal and informal groups. → Formal groups = formed by the structure of an organisation and are designed to complete certain work assignments. Task oriented, permanent, have formal structure, consciously organised by management, contribute directly to organisation’s collective purpose. → Informal groups = alliances that are neither formally structures nor organisationally determined. Why are groups formed? → Groups are mainly formed because it creates sense of belonging for the members and this tendency to take personal pride or offence for the accomplishments of the groups is because of the: → Social identity theory = this theory is the perspective that considers when and why individuals consider themselves members of groups. These social identities help people gain pleasure or schadenfreude (joy in someone else’s misfortune). → In-group favouritism = is when the members of the group feel they are better than people outside the group; this behaviour often acts as a base for stereotyping. When are groups formed? Groups are formed when certain characteristics help them relate to a social identity: → Similarity is when the person shares common values and ideas with an organisation. → Distinctiveness is when the specific group that they relate to stands out in comparison to the other groups. → Status is the elevation in identity the person would expect after joining the group. → Uncertainty reduction is when people realise who they are and how they fit in the world after they join the group. 9.2 Stages of group development BI: Leadership and Organisational Behaviour 25  Five-stage model: 1. Forming: During this stage, there is a lot of uncertainty and the stage is completed when members feel that they are part of the group. 2. Storming: This stage is characterized by intragroup conflict and attempts of group members to control the group; 1. 3. Norming: During this stage, the group sets a common set of expectations (rules) and is characterised by cohesiveness. 4. Performing: The group is fully functional and accepted during this stage. 5. Adjourning: During this stage, the group is preparing for disbandment (išformavimas). → NOTE: it is not always the case that every stage is completed distinctively. Some stages might take place at the same time (storming and performing). The main disadvantage of this model is that it might ignore organisational context. Alternative model: Temporary groups usually follow an alternative sequence of actions and ignore the five-stage model. The alternative model is called punctuated-equilibrium model. 1. During first meeting, the group members define the group’s direction and set group’s goals. The first phase after this meeting is characterised by inertia. 2. Then a translation takes place at the end of the first phase once the group has used half of its allotted time. This transition brings significant changes and a second period of inertia follows the transition. 3. Lastly, the last meeting of the group is characterised by markedly accelerated activity. This pattern is called punctuated equilibrium model and it is set of phases that temporary groups go through, involving transitions between inertia and activity. 9.3-6 Group properties The major group properties are roles, norms, status, size & cohesiveness. Roles Roles are defined as a set of expected behaviour patterns attributed to a person occupying a given position in a social unit. BI: Leadership and Organisational Behaviour 26  The behaviour of individuals is significantly influenced by the roles they need to perform. Roles are also influenced by role requirements set by the groups. Certain attitudes and actual behaviour from the role identity. → The way we think we are suppose to act under specific circumstances is defined as role perception. → Role expectation is the way others expect an individual to act under specific circumstances. → Role conflict is the phenomenon under which an individual is confronted with divergent role expectations. Norms Norms are defined as the acceptable standards of behaviour within a group that are shared by the members of the group. The main categories of norms within the workplace are: → Performance norms = level of output & time constrains → Appearance norms = dress code → Social arrangement norms = ability to form friendships within a workplace → Resource allocation norms = assignment of challenging jobs. The Hawthorne Studies concluded that the performance of individuals within the workplace is strongly influenced by work norms. → Reference groups are significant groups to which individuals belong or wish to belong and with whose norms individuals are willing to conform. → Conformity = phenomenon of adjusting the behaviour of an individual to align with the norms of the group. → Deviant workplace behaviour = voluntary behaviour that violates significantly organisational norms. It threatens the well-being of an organisation and its members. People that belong to groups have a higher chance to develop deviant workplace behaviour. This depends on the established group norms. Status Status is defined as a socially defined position assigned to groups or group members by others. Status is important motivator and has major behavioural consequences. It is derived from three sources: BI: Leadership and Organisational Behaviour 27  1. The power a person wields over others 2. A person’s a ability to contribute to the goals of a group 3. The personal characteristics of an individual. NOTE: High status people often granted more freedom over lower status people and can easily resist conformity pressures. High status people are usually more assertive (ryžtingi) than others, they are more active and present in groups discussions. Corrective behaviour should take place if there is perceived inequality regarding status. Size The size of the group affects the group’s overall performance. Smaller groups are usually faster when completing tasks than larger group. Individuals also perform better in small than in large groups. The advantage of large groups is their wide diversity of inputs. → The term of social loafing refers to the tendency of individuals to put in less effort when they work collectively than when they work individually (productivity decreases as there are a lot of people). Social loafing could be attributed to the belief of inequity of contribution of the members in a group. It could be prevented by setting up a common group purpose, increasing intergroup competition, engaging in peer evaluations, and distributing group rewards. → The total performance of the group composed of people might be greater than the performance of a single person. However, the individual performance of employees decreases when they work in group. Emerging systematic entity → the whole is greater than the sum of the parts. Cohesiveness Cohesiveness is defined as the degree to which group members are attracted to each other and are motivated to stay in the group. Cohesion affects group productivity, and vice versa. It can also lead individual group members to engage in OCBs and feel more confident in their jobs, and eventually, it can lead to growth in productivity over time. → To encourage group cohesiveness, managers should: Create smaller groups Encourage agreement with group goals Increase the time group members spend together Stimulate competition with other groups Give rewards to the group as a whole Physically isolate the group. BI: Leadership and Organisational Behaviour 28  9.7 Group decision-making Groups usually generate more complete information and knowledge than individuals. Working in groups increases the diversity of views and the acceptance of a certain situation. Some disadvantages of groups are the amount of time they consume, the conformity pressures within the group, the phenomenon of the domination by one or a couple of group members and the lack of allocation of responsibilities between the group members. The accuracy of decision make by groups is higher than the accuracy of individual decision-making. Groups also tend to perform better than individuals as far as creativity is concerned. There are two phenomena that could affect a group’s ability to review alternatives objectively. The first phenomenon: → Groupthink - is defined as the phenomenon in which the norm of consensus overrides the realistic appraisal of alternative courses of action. In other words, groupthink is the occurrence in which individuals do not express their unusual and unpopular views because of group pressures. Managers should encourage group discussions, let someone play the role of devil’s advocate or monitor the size of groups to tackle the phenomenon of groupthink. The second phenomenon: → Group shift - which is the phenomenon of changing the level of risk of a decision towards greater risk or conservation. 9.7.2 Group decision making techniques There are several significant group decision-making techniques: 1. The interaction of groups = technique where interacting groups come together face-to-face and rely on verbal and non-verbal communication. 2. The brainstorming process = consists of generating ideas to develop alternative solutions to overcome issues. 3. The nominal group technique = allows individuals to represent their ideas systematically and restricts discussion or interpersonal communication during the decision-making process. This ensures that all participants express their views and think independently. 4. Electronic meeting = individuals are able to interact on computers, make comments on the basis of proposed solutions and vote in favour of a solution while staying anonymous. Global Implications Cultural differences have an effect on status. It is important to understand who holds a status when interacting with people from other cultures/countries. Social loafing is a typical phenomenon in Western countries, however it is less prevalent in collectivistic cultures. Diversity, while often being a beneficial characteristic, increases group conflict. If the group can overcome this conflict, the group members will perform better than a non-diversified group. CH 10 → Understanding Work Teams This chapter identifies five different types of work teams and their characteristics. The major elements of effective work teams are analysed and information on how to turn individuals into team players is provided. BI: Leadership and Organisational Behaviour 29  10.1 Group versus teams There is a significant difference between work groups and work teams: → Work groups are defined as groups of individuals that interact primarily to share information and make decisions to help each group member fulfil his or her responsibilities. → Work teams are defined as groups of individuals whose individual efforts result in performance that is greater than the sum of individual inputs. MAIN DIFFERENCE: work teams maintain a positive synergy that may increase the effectiveness and the efficiency of the team. This usually happens when the team members share common characteristics. 10.2 Types of work teams There are five different types of work teams: problem-solving teams, self-managed teams, cross-functional teams, virtual and multi-team systems. Problem-solving teams = teams composed of 5 to 12 people who meet on a regular basis to discuss possible improvements regarding the quality, efficiency and environment of their work. The members of problem-solving teams usually work for the same department of an organisation. Self-managed teams = teams composed of 10 to 15 people that undertake responsibilities and duties of their former supervisors. Self-managed teams generate higher levels of job satisfaction. However, they are strongly linked to high absenteeism (nepasirodymas) and turnover rates. The effectiveness of these teams depends on the team norms, the tasks of the team and the reward structure of the organisation. Cross-functional teams = teams composed of employees from different departments of an organisation but from the same hierarchical level. They work together to accomplish a certain task. The main advantage of cross-functional teams is that their members are employees from different areas of expertise within the organisation. This encourages the exchange of information, the development of new ideas and the solution of complex and demanding project. Virtual teams = teams composed of people that communicate through computer technology and work together to accomplish a certain goal. The main disadvantage of virtual teams is that there is no physical interaction between its members. However, virtual groups can be productive if members trust each other, the team’s progress is controlled by supervisors and the results are published throughout the organisation. Multi-team systems = represent a collection of two or more interdependent teams that share a superordinate goal; a team of teams. As tasks become more complex teams are often made bigger. But when teams become bigger the coordination becomes tougher. So, organisations solve this problem by employing multi-team systems. 10.3 Effective Teams 📙 Effective teams = teams that have a common plan and purpose that motivates them and directs their activities, have set specific individual and collective goals, have mental models and are characterised by reflexivity. The effectiveness of teams is influenced by elements that are divided in four categories: 1. Resources and other contextual influences team’s effectiveness. Teams should receive enough adequate resources to achieve their goals and purpose. Teams should receive support from managers and the larger organisation; BI: Leadership and Organisational Behaviour 30  2. Leadership and structure. Teams that assign different responsibilities to each member and develop a structure, tend to be more successful. The role of the leader that facilitates the work of a team is also important; 3. Development of a climate of trust among the members of a group ensures that employees can trust each other, freely express their disagreements and take risks; 4. Performance evaluation and rewards systems encourages teams effort and commitment. Besides evaluating and rewarding employees for their individual effort, the group reward system should be used to reflect the team performance. 10.4 Team Composition → The performance of teams is influenced by the abilities of team members and their knowledge of expertise. Effective teams require four different types of skills: technical expertise, problem-solving, decision-making and interpersonal skills. → The level of consciousness, openness to experience and agreeableness are aspects of personality of members that influence the productivity of teams. → The effectiveness of teams increases when team roles are allocated to individuals that are able to fulfil them. When team members focus on the positive aspects if their diversity, they can benefit from their different experiences. → The term of organisational demography is defined as the degree to which team members of a workplace share a common demographic attribute (i.e. sex, age), educational background or duration of service in an organisation and the impact of this attribute on turnover. → The size of a teams & the preferences of the members are also important for the effectiveness of a team. Teams with size of 5 to 9 members tend to be more successful, since there is sufficient coordination between the members and sufficient diversity of skills and knowledge. Lastly, not all employees are willing to work within groups. 10.4 Team Process Effective teams = teams that have a common plan and purpose that motivates them and directs their activities, have set specific individual and collective goals, have mental models and are characterised by reflexivity. → Reflexivity = ability of a team to reflect on and adjust its master plan when necessary. → Mental models = knowledge and beliefs regarding the ways teams fulfil their tasks. → Effective teams are also characterised by team efficacy, which is the degree to which team members believe that they can succeed. → Conflict levels also influence teams effectiveness. Conflict might be productive for a team when it generates discussions and critical thinking and prevents groupthink. However, when conflicts between team members increase, effectiveness decreases. → Effective teams avoid social loafing, since every member feels accountable both individually and jointly for the performance of the team. 10.5 How to become a team player? The ability of an individual to work productively within teams should be one major criterion during hiring procedures. Individuals that have developed their interpersonal skills and their ability to work within groups should be hired. BI: Leadership and Organisational Behaviour 31  Organisations should offer training to employees that lack in their ability to work within teams or establish reward systems to encourage cooperative efforts rather than competitive efforts between employees. However, teamwork isn’t always the answer and often is more time and resource consuming. So, before managers rush into using teams they should carefully assess whether the work requires or will benefit from a collective effort. → Teams must only be used is the team members are interdependent, and they need each other to complement each other while they finish tasks. Finally, teams should be used when there is a common purpose or a set of goals for the people in the team that outweighs their individual purposes. 10.5.2 Global Implications → The extent of a teamwork is not so significant in the United States as in other countries. There is a more individualistic culture as compared to other countries. The introduction of self-managed teams should be accompanied by certain steps to ensure their effectiveness. → The degree of power distance in a country is a significant variable that influences the structure of teams. If there is a high degree of power distance, the team should be structured so that leadership roles are very clear. LECTURE 5 → CH 5 CHAPTER 5: PERCEPTION, INDIVIDUAL DECISION-MAKING AND CREATIVITY This chapter defines terms of perception and individual decision-making. The procedure of making judgments about others (attribution theory), the shortcuts used during this procedure and criteria of decision-making are analysed. Moreover, the concept of creativity and its three-stage model is defined. Sensation → occurs when sensory receptors detect sensory stimuli Attention → the act of focusing on a particular object for some time while simultaneously ignoring distractions & irrelevant information. 6.1 Perception Perception = procedure by which individuals organise and interpret their sensory impressions to give meaning to their environment. The study of perceptions is important for the field of OB because the behaviour of people is based on their perception of what reality is. The factors that influence perception are divided in 3 categories: 1. The personal characteristics of the perceiver = personal characteristics (i.e. attitudes, personality, motives, interest, experiences & expectations) can significantly influence the perception of individuals. 2. The personal characteristics of the perceived target = people form perceptions on the basis of the personal characteristics of the perceived target (i.e. relationship background, 1. similarities with the other individual) 3. The context of the situation during which the perception is formed = perceptions are influenced by situational factors. BI: Leadership and Organisational Behaviour 32  6.2 Attribution Theory Attribution Theory = tries to explain the way we judge people in different ways on the basis of the meaning we give to a certain behaviour. This theory is the process of determining whether a behaviour is caused internally or externally. → Internally caused behaviours = reflect behaviours that are under the personal control of an individual. → Externally caused behaviours = reflect behaviours that are influenced by situational factors that force the individual to act in a specific way. There are 3 determining factors of perception: → Distinctiveness = happens when individuals behave in different ways under different circumstances. → Consensus = is the phenomenon of behaving in the same way under the same circumstances. → Consistency = is the phenomenon of maintaining the same behaviour over time. Errors and biases may distort attributions, the fundamental attribution error suggests that people underestimate the influence of external factors and overestimate the influence of internal factors when judging the behaviour of others (being accused of being late, even though you were stuck in a traffic). The self-serving bias = suggests that people attribute their successes to internal factors and their failures to external factors. 6.2.2 Perception shortcuts It is impossible for people to observe everything. Therefore, they engage in selective perception. This means that we look for characteristics that are on the basis of our interests like background, experience and attitudes. This method is prone to inaccurate methods. → The halo effect = the phenomenon of forming positive perceptions for others based on a single characteristic. This means that a single trait influences our general impression for someone. → The horns effect = on the other hand, is when we draw a negative impression from a single characteristic. → The contrast effect suggests that our reactions and perceptions are influenced by encounters we had with other people in the recent past. Some individuals judge others on the basis of their perception of the group that they are part of. This phenomenon is defined as stereotyping. Stereotyping = is a quick method to make decisions. However, it can easily cause issues when generalisations are made inaccurately. → Profiling = form of stereotyping in which entire groups of individuals can be singled out, purely based on their personal characteristics (i.e. race), for intensifying critical observation, inquiry or investigation. IN ORGANISATIONS: BI: Leadership and Organisational Behaviour 33  Some organisations use specific methods to make judgments about individuals/employees. The most significant methods are the employment interview, the performance expectations and the performance evaluation. → The employment interview is used to determine if an individual will be hired or not. During employment interviews, employers might draw early conclusions and form wrong perceptions. A situation where an employee inaccurately perceives a second person and the resulting misconceptions cause the employee to behave in ways consistent to the original perception, is called self-fulfilling prophecy. Performance evaluation is closely tied to the appraisal of an employee and their promotions, pay rises and continuation of employment. Lastly, the perception shortcuts may cause negative results when the evaluation of the performance of an employee is made on the basis of subjective criteria. 6.3 Perception and individual decision-making Decision-making is a reaction to a problem. This means that there is some discrepancy between the current state and some desired state and other kinds of actions need to be reviewed. Decision-making is always a choice between two or more alternatives. → The link between perception and decision-making is that the existence of a problem is a perceptual issue. Also, every decision requires an assessment of the information received and the situation and the evaluation of the possible alternatives. 6.4 Making decisions in organisations → The rational decision-making model = describes how individuals should behave to maximise the value and consistency of their decisions within specified constraints. The 6 steps of the rational decision-making model are as follows: 1. Define the problem 2. Identify the decision criteria 3. Allocate weights to the criteria 4. Develop the alternatives 5. Evaluate the alternatives 6. Select the best alternative Note: Most decision-making procedures do not follow this rational model in real life. 6.4.2 Bounded rationality People tend to reduce complex problems to a level at which they can understand it and respond to it. People try to find solutions that are satisfactory and sufficient. It is usually impossible to achieve full rationality for the human mind. Therefore, human mind operates within the constraints of bounded rationality. → Bounded rationality = implies that people develop simplified models that focus on the essential features of problems and ignore their complexity - they develop a simple model to make rational decisions. BI: Leadership and Organisational Behaviour 34  INTUITION: → Intuition = unconscious process of decision-making created from distilled experience. Intuition is a fast way of decision-making that engages personal emotions and is based on limited information. Intuition can be complemented to rational thinking; it is not necessarily the opposite of rational decision-making. The key is to find a balance between rational decision-making and intuition. 6.4.3 BIASES & ERRORS → Biases and errors are the result of an attempt to minimise effort and avoid difficult trade-offs. It is an attempt to find a shortcut for the whole decision-making process. We will discuss some common biases of the decision making process: Overconfidence bias = when people are given the exercise to assess the probability of correct answers, they tend to be far too optimistic. This behaviour is most likely to be observed for individuals who have the weakest intellectual and interpersonal abilities. This implies that individuals are also considering problems outside their area of expertise. Anchoring bias = is an error reflecting the tendency to fixate on the first information and then fail to adjust to subsequent information. Our minds have a disproportionate focus on the first information that is received. Confirmation bias = we usually gather information on the basis of selective and subjective criteria. This bias is a spacial case of selective perception. We gather information that supports the views and beliefs we already hold. Availability bias = people base their decisions and judgments on information that is readily available on them. Events that cause emotions or occurred recently are generally more prominently available to our memories. Escalation of commitment = this reflects a situation in which people tend to support their decisions even if they are clearly wrong. People tend to stay committed in failing course of action if they view themselves as responsible. Randomness error = people tend to believe they can predict the outcomes of totally random events. Our decision- making becomes impaired whenever we try to form meaningful conclusions out of random events. Risk Aversion = the tendency to prefer a sure gain of a moderate amount over a riskier outcome, even if the riskier outcome might have a higher expected payoff. Hindsight bias = this is a tendency to believe that, after the outcome of an event, we could have predicted it accurately. This reduces our ability to learn from past events, we tend to believe that we are better at making predictions than we actually are. 6.5 Individual Differences Individual differences cause deviation from the rational model. There has not been much research on personality and decision-making, however recent studies have looked at conscientiousness and self-esteem. Special facets of conscientiousness account for escalation of commitment, not the broad trait itself. People with a high self-esteem tend to be very susceptible to self-serving bias. BI: Leadership and Organisational Behaviour 35  IMPACTS OF INDIVIDUAL DIFFERENCES ON DECISION-MAKING: → Decision-making practice is characterised by bounded rationality, common biases and errors and also use intuition. In addition individual differences create deviations from the rational model. There are many individual differences such as personality, gender, mental ability & cultural differences: Personality plays a big role in influencing our decisions. Let’s look at conscientiousness and self-esteem. Certain aspects of conscientiousness may stir dutifulness and achievement-striving employees. People with high self-esteem are strongly motivated to maintain it and usually take all credit when they succeed and blame others for their failures. Gender often affects decision-making and research on rumination (reflecting at length) supports this. The study indicates that women spend more time than men on making decisions, this may lead to more wholesome decisions but are time-consuming and cannot be made in the short run. Mental ability has a direct relationship with decision-making. People who have higher mental ability process information quickly and solve problems more accurately. However, sometimes smart people are likely to fall prey to anchoring and over-confidence. Cultural differences are not accounted for in the rational model, but they do play a major role as people from different backgrounds don’t necessarily make the same decisions. Therefore, this aspect needs to be recognised. The cultural background of a decision maker can significantly affect the selection of problems, the depth of analysis and the method of decision-making both autocratically or democratically. IMPACTS OF ORGANISATIONAL CONSTRAINTS ON DECISION-MAKING The most significant categories of organisational constraints are: 1. Performance evaluation: The decision-making of managers is strongly influenced by the criteria on which managers are evaluated. 2. Reward system: Organisations set rewards systems for employees. These reward systems influence managers and their decision-making. Managers known which choices are preferable in terms of personal payoff. 3. Formal regulations: Organisations limit in ability of their employees to make decisions by establishing certain rules & policies. 4. System-imposed time constraints: The process of decision-making is strongly influenced by time constraints imposed by organisations. 5. Historical precedents: Decisions are made within a specific context. Past decisions strongly influence current decisions. 6.6 Ethics in Decision-Making Ethical decisions are influenced by 3 major criteria: Utilitarian criterion = defined as the process of making decisions on the basis of their outcome. Rights criterion = defined as the process of making decisions on the basis of common good for a great number of people, fundamental liberties and privileges. → This criterion protects whistle-blowers = individuals that reveal unethical practices of an organisation towards external bodies (i.e. media). BI: Leadership and Organisational Behaviour 36  Justice criterion = defined as the process of making decisions on the basis of an equal distribution of benefits and costs. BEHAVIOURAL ETHICS Researchers have also turned to behavioural ethics, an area of study that analyses how people behave when confronted with ethical dilemmas. The research reveals that while ethical standards exist collectively and individually, individuals will not always follow these standards promoted by their organisations. 6.7 Creativity, creative decision-making and innovation in organisations → Creativity = ability to produce novel and useful ideas. This is needed for a rational decision maker. Most people have a creative potential within them and need a way to unleash it. However, exceptional creativity is very scarce. The three-stage model of creativity: 6.7.2 CREATIVE BEHAVIOUR: Creative Behaviour occurs in the following 4 steps: 1. Problem formulation: any act of creativity starts with a problem that the behaviour is designed to solve. This is the stage in which the problem is identified and the required solution needs to be found. 2. Information gathering: the stage where possible solutions for the problem are incubated in the individual’s mind; Idea generation = the process that develops possible solutions to the problem from relevant knowledge and information. 3. Idea generation: is the process in which we develop possible solutions to a problem from relevant information and knowledge. Curiosity has been found to be a driver of idea generation. 4. Idea evaluation: this stage involves the evaluation of the potential solutions to the problem in order to set apart the best one. 6.7.3 CAUSES OF CREATIVE BEHAVIOUR There are two causes of creative behaviour: BI: Leadership and Organisational Behaviour 37  Creative potential: Intelligence is related to creativity; smart people are more creative because they are better at solving problems. Most people have characteristics shared by exceptionally creative people, the more of these characteristics the more our creative potential. Expertise is the foundation for all creative work and thus is the most important predictor of creative potential. Creative Environment: Having high creative potential is not enough, we need a creative environment where the true value of this potential can be realised. The most important factor is motivation, if you are not motivated to be creative then your creativity will be low. Therefore, an environment which promotes this will be the perfect setting to inhibit creativity. Creative outcomes (innovation) → This is the final stage in the model and according to the model this outcome must be creative or innovative in nature, but this is not a compulsion. An employee may have an innovative idea but may never share it or the management will not have the necessary resources to carry out the outcome. One study showed that people are biased against creative ideas because these ideas carry uncertainty. An organisation may harvest ideas from its employees and call itself innovative, but as T. Levitt stated: “Ideas are useless unless used”. GLOBAL IMPLICATIONS AND CONCLUSION Extensive research has shown that cultural differences in different countries can cause differences in attributions. The background of decision makers is strongly influenced by the way problems are being selected and the depth of their analysis. Cultural differences might be time orientation, importance of rationality, belief in the ability of individuals to solve complex problems and their preference for collective decision-making. Another issue is that there are no global ethical standards. LECTURE 6 → CHAPTER 12 Leadership = ability to influence a gr