Chapter 1

What is Organizational Behaviour?

Organizational Behavior is the academic study of how people interact within groups and how
And its principles are applied primarily in
attempts to make businesses operate more effectively.

Being a good manager requires strong interpersonal skills, as communication is crucial, as one
must manage different types of resources: people, money, and time in order to achieve specific
goals.

Planning function refers to setting goals, creating strategies, and preparation of plans that make
different activities work coherently and effectively.
Organizing function concerns tasks identification and division, assignment of tasks to individuals,
setting reporting and decision- making systems.
Leading function
communication canals and solving conflicts.
Controlling function
being done as planned; and when necessary, undertaking corrective actions.

Management Roles
ROLE DESCRIPTION
Interpersonal Roles which involve ceremonial/symbolic duties
Figurehead Symbolic head, needs to perform duties of social/legal nature
Leader Motivates and directs employees
Liaison Maintains a network of outside contacts
Informational Collection and dissemination of information
Monitor Receives information, serves as nerve center of internal and external information
Disseminator Transmits information from outsiders to the members
Spokesperson Transmits information about the organization to outside parties
Decisional Refers to making choices
Entrepreneur Analyses the organization and its environment for opportunities and initiates
projects to bring about change
Disturbance Handler Undertakes corrective actions in case of problems
Resource allocator Makes or approves important organizational decisions
Negotiator Represents the organization in negotiations

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They can be divided into 3 main categories: interpersonal roles, informational roles and
decisional roles. The concept was developed by Henry Mintzberg and is called
Managerial Roles.

Management Skills
There are 3 types of management skills developed by Robert Katz: Technical skills (application of
specialized knowledge, know-how, e.g., think of mechanical engineer, vet, pharmacist), human
skills (easiness to work in a team,
actions, ability to communicate and get along with people), conceptual skills (mental capability
to analyze problems, manage complexity of an issue, decide on solutions and evaluation of
possibilities).

Effective or successful managers?

of their time on communication activities (44%) and on human resource management activities
(26%). In contrast, successful managers spend almost half of their working time on networking
activities (48%) and communication activities (28%). It is understandable that average managers
work most of the time on traditional management (32%) and on communication activities (29%).

Defining Organisation Behavior (OB)

behavior within organizations, for the purpose of applying such knowledge toward improving an

It is important to remember that OB deals with 3 levels of behaviors: individuals, groups and
structures. Knowledge about those 3 types of behaviors is necessary to apply actions which make
the whole organization function successfully.

How to study Organisation Behavior? Evidence-Based Management (EBM)

In OB systematic study and evidence-based management is combined with intuition. Behavior
can be predicted. If it is examined on the continuous basis, one is able to forecast how people
can act in particular circumstances (that is why systematic study of p
necessary). Systematic study involves examining causes and effects, just like in science this is
done to make general law-like conclusions based on gathered data. What is closely related to
systematic study is evidence-based management (EBM). EBM implies making managerial
decision after consideration of scientific facts, data, conclusions, laws. Managers who apply EBM
act like scientists when they face a problem, they search for scientific information which can
give them possible problem solutions, then they apply the most relevant knowledge in order to
solve an issue. Of course, intuition is inseparable from decision-making process. Nevertheless,
importance of systematic study and thus EBM cannot be questioned.

What major behavioral disciplines contribute to Organizational Behavior?

o Psychology (studies behavior of individual)
o Social psychology (studies behavior of individual within a group)

2
o Sociology (studies groups, societies, organizational systems, how individual acts in relation
to a society)
o Anthropology (studies societies, groups, cultures, organizational systems)

Absolutes in Organizational Behavior

Organizational Behavior concepts, however law-like they can be, must take into account
situational factors. Under different conditions different individuals act differently. That is why
there only a few absolutes in OB. Because people are different and complex, one needs to
consider OB in a contingency framework.

Challenges and Opportunities for Organizational Behavior:

Responding to Economic Pressures
Responding to globalization
Managing workforce diversity
Improving Customer Service
Improving People Skills
Stimulating Innovation and change

Working in Networked Organizations

Helping Employees Balance Work-Life Conflicts
Creating a Positive Work Environment
Improving Ethical Behavior

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 Chapter 2
Diversity in Organizations

Diversity is the degree of difference in identifying features among the member of the organization.
Effective Diversity management increases an organization access to the widest possible pool of
skill, ability, and ideas. Diversity is about how individual characteristics like age, gender, race,
ethnicity, and ability can influence employee performance.

Demographic Characteristics of workforce

Levels of Diversity
Discrimination
Biographical Characteristics
Age
Sex
Disability

Other Biographical Characteristics:

Tenure
Religion
Sexual Orientation and Gender Identity

Ability: It
physical power or skill that makes it possible to do something is called ability.
Factors of Ability:
1. Intellectual Abilities
2. Physical Abilities

The Role of Disability:

The importance of ability at work obviously creates problems when we attempt to formulate
workplace policies that recognize diversity in terms of disability status. As we have noted,
recognizing that individual have different ability that can be taken into account when making
hiring decision is not problematic. However, it is discriminatory to make blanket assumptions
about people on the basis of a disability. It is also possible to make accommodations for
disabilities.
Implementing Diversity Management Strategies:
Attracting, Selecting, Developing, and Retaining Diverse Employee
Diversity in Group
Effective Diversity Programs

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 Chapter 3
Attitudes and Job Satisfaction

Attitudes: Attitudes are evaluations, judgments, opinions about people/objects/states/events.

There are 3 main components of attitudes:

Cognitive
Affective
Behavioral
Cognitive refers to just describing things how

another jo
inseparable. As one sees attitudes and behaviors are connected, certain attitude leads
always/sometimes/often/never to certain behavior.

Major Job Attitudes

Job satisfaction:
characteristics.
Job involvement (level of identification with the job, caring for and participation in it and

Psychological empowerment
work setting, abilities, his work importance and locus of control.
Organizational commitment
culture, strategy, mission, values, vision and willingness to preserve his belonging to the
organization)
Affective emotional connection with the company and its values
Continuance perceived financial benefit resulting from staying rather leaving a
firm/company
Normative feeling obliged to stay in a company because of moral/ethical matters

Job Satisfaction
Job satisfaction can be measured in two ways-
Single global rating method (survey participants answer one question: How satisfied are you
with your job?)
Summary of job facets (makes an employee evaluate each element of a job), possible facets
can be salary, communication with co- workers and with supervisor, number of days off, etc.

5
 -
is more accurate, allows the identification of the core problems and makes it easier to create
possible solutions.

What makes employees satisfied with their job?

The fact that they enjoy their work
Interesting jobs that provide training, variety, independence and control
Most people prefer challenging over easy and various over routine
In general, most of the time is the nature of job that makes one satisfied with work. However,
also personality is an important factor influencing job satisfaction. It is essential to have positive
core self- ions of his possibilities, abilities, and strengths).
Once a person achieves a level of payment that allows for him comfortable living, the
relationship between pay and job satisfaction does not exist any longer.

There are 4 responses to dissatisfaction:

1. Exit behavior indicating the will to leave the organization
2. Voice results in actively and constructively trying to change dissatisfying conditions
3. Loyalty waiting passively hoping for situation improvement
4. Neglect doing nothing, letting the conditions worsen

Relationships between job satisfaction variables:

Job satisfaction and job performance strong positive relation -> more satisfied workers are
more productive
Moderate relation between job satisfaction and organizational citizenship behavior -> more
satisfied workers more probable that they engage in OCB
Satisfied workers enhance customer satisfaction and loyalty
Satisfied workers are less likely to miss work (moderate relation)
Satisfied workers are less likely to quit (strong relation)
Job dissatisfaction is much likely to cause workplace deviance
Managers usually overestimate job satisfaction but do not actually measure it.

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 Chapter 4
Emotions and Moods

Affects: Also referred to as the experience of different feelings, can be divided into emotions and
moods.

Emotions:
Are more intense and have a contextual stimulus (they are caused by a person, situation, action,
event); they usually last for seconds/minutes. Emotions: most of researches have agreed that
there are 6 basic emotions: happiness-surprise-fear-sadness-anger-disgust.

Moods:
Are less intense and lack situational stimulus. Are usually not felt towards people and last longer
than emotions. Moods are more cognitive while emotions are more behavioral (can lead us to
action). Moods and emotions can influence each other. Emotion, if it is deep and lasting, and turn
into mood. Moods can be of negative or positive affect.

Sources of Emotions/Moods:
Personality people have tendencies to experience some moods/emotions/ Moreover,
people also differ in how intense they experience emotions. This last concept is called affect
intensity
Time worst moods early in the week, best moods late in the week. Most positive emotions
at mid-point between waking and sleeping, negative emotions highest in the morning and
later average
Weather weather has little influence on mood. What happens on the cultural level in the
society is illusory correlation (people think that nicer whether makes them feel better) it

Stress stress negatively influence moods/emotions

Social life social activities make people experience positive emotions and also people
experiencing positive emotions seek social activities
Sleep poor sleep equals negative emotions (at work reduces job satisfaction).
Exercise sport increase positive moods
Age negative emotions occur less and less with age. With age, we are more emotionally
wise

Emotional labour:
Emotional labour is a form of emotional regulation in which workers are expected to display
certain emotions as part of their job, and to promote organizational goals. The intended effects
of these emotional displays are on other, targeted people, who can be clients, customers,
subordinates or co-workers. What happens sometimes is emotional dissonance (showing one

7
emotion while experiencing another), it is often a difference between felt emotion and displayed
emotion (displayed emotions/regulations are organizationally required and claimed as
appropriate in a particular job).

Employees can show displayed emotions by:

1. Surface acting - "painting on" affective displays, or faking; Surface acting involves an
employee's presenting emotions on his or her "surface" without actually feeling them. Is
more stressful than deep acting
2. Deep acting -
organization requires (that is displayed emotions).

Affective Events Theory:

Model developed to identify how emotions and moods influence job performance and job
satisfaction. The model increases understanding of links between employees and their emotional
reaction to things that happen to them at work.
Look at the appendix for the model.

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 Chapter 5
Personality and Values

Nature of personality: Before going deeper into the subject, we define the term personality as

departments use personality tests to measure and forecast the behavior of prospective employee.

The common method of measuring personality is self-report survey one evaluates himself on
different variables. The other means of personality measurement is the observer-rating survey,
which is a more independent assessment a person observes and rates personality of another
person (employee, prospective employee, etc.). Claimed to be more successful in the context of
organizations.

Models which organize traits

There are two main models which recognize and organize traits:
The Myers- Briggs Type Indicator
Big Five Model

The Myers- Briggs Type Indicator- the most common personality-

which consists of 100 questions related to behaviors, feelings, and attitudes in different
situations. After doing the test, a person can be classified to the following groups:
Extroverted or introverted extraverted types are gregarious, social, assertive, outgoing
Sensing or intuitive sensing types like routine, are practical-oriented, pay attention to
details
Thinking or feeling thinking types are logical and analytical when facing problems
Judging or perceiving judging types like the ordered, structured world, need for control
Disadvantages of the model: a person must be classified either to one type or another cannot
be in-between the types, and do not reflect job performance.

Big Five Model personality-assessment tool which recognizes five aspects:

Agreeableness -> describing someone who is warm, cooperative, easily reaches compromises
and is trusting.
Conscientiousness -> describing someone who is organized, determined, responsible and
reliable.
Emotional stability -> handling stress measure. Negative emotional stability relates to people
who get angry/nervous/upset easily, irritated quickly, feel insecure, and lack confidence.
Openness to experience -> describes curiosity of world or some of its aspects, creativity,
interest in innovations, novelties.

9
Nature of values: Basic convictions that a specified mode of conduct or end state of existence is
personally or socially preferable to an opposite or converse mode of conduct or end to end state
of existence.
The most basic categorization of values recognizes terminal and instrumental values and is used
in Rokech Value Survey (RVS). RVS is made of two sets of values: terminal values are desirable
goals and instrumental values that represent behaviors/modes which help to achieve the
terminal values (terminal goals). People in the similar occupations have similar RVS values.
Moreover, it is necessary to mention generational values. Researches have made the following
division:
Veterans -> begin of the workforce in 1950s and 1960s; rather loyal, belief in authority, order,
hardworking, pragmatic, traditionalists.
Boomers -> born after the WWII; workforce from mid-1960s until mid-1980s; career-
oriented, making-money attitude, distrust/dislike of authority.
Xers -> entered workforce from 1985 until 2000; people with team-sprit at work, who value
relationships, bonds, balance their work with private life, question authority, do not like rules.
Nexters -> on the work market since 2000; people to whom financial success is important,
they are technology-oriented at work, confident, value both self and relationships, team spirit
combined with work autonomy.
Disadvantages of the division above: does not apply in all cultures, little research relying on
intuition, inexact categories.

1. Person-job fit -> recognizes 6 personality types and makes a match between particular
personality fit and occupation and its environment. A successful match guarantees high job
satisfaction and lower probability to resign from the job. The possible personality types in
person-job fit theory are: realistic, investigative, artistic, social, conventional, enterprising.

2. Person-organization fit -> this theory claims that people are attracted to and chosen by
organizations that correspond to their values and beliefs. If it is not the case, a person will

guarantees job satisfaction, organizational commitment and low probability of leaving the
firm.

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 Chapter 6
Perception and
Individual Decision Making

Perception is a process by which individuals organize and interpret their sensory impression in
order to give meaning to their environment. Perception varies from person to person. Different
people perceive different thing about the same situation and one might chan

Factors that Influence Perception: -

A number of factors operate to shape and sometimes distort perception. Factors are external
and internal factors are as follows:
External Factors: - Some of the external factors that influence perception are: size, intensity,
position, contrast, repetition.
Internal factors: -Some of the internal factors that influence perception are: motivation,
interest, need

Specific Application of Shortcuts in Organizations: -

People in organizat
performance. In many cases, our judgments have important consequences for the organization.
The most obvious applications are:
Employment interview
Performance Expectation
Performance Evaluation

Decision Making in Organizations:

Decision making refers to making choices among alternative courses of action-which may also
include inaction. Individual throughout organizations use the information they gather to make a
wide range of decisions.

The Rational Model, Bounded Rationality, and Intuition: -

Rational Decision-Making Model: -A decision-making model that describe how individual
should behave in order to maximize some outcome.
Bounded Rationality: - A process of making decisions by constructing simplified models that
extract the essential features from problems without capturing all their complexity.
Intuitive Decision Making: - An unconscious process creates out of distilled experience.

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Common Biases and Errors in Decision Making: -
Overconfidence Bias
Anchoring Bias
Confirmation Bias
Availability Bias
Randomness Error

Influences on Decision Making:

a) Individual Differences
b) Organizational Constraints

Individual Differences: -
Decision making in practice is characterized by bounded rationality, common biases and errors,
and the use of intuition. In addition, individual differences create deviation from the rational
model. Some of individual differences are: Personality, Gender, Mental ability, and Cultural
differences.

Organizational Constraints: -
Organizations can constrain decision makers, creating deviations, performance evaluation,
reward system, formal regulations.

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 Chapter 7
Motivation Concepts

One defines motivation as a reason for engaging in a particular behavior towards attaining a
goal. It relates to 3 key concepts: direction, intensity and persistence of human behavior.
Intensity=how much one tries, direction= it leads to the desired outcome, persistence=how long
one tries.

Early theories of motivation

Hierarchy of needs Maslow pyramid
1st level -> Psychological hunger, thirst, shelter, sex
2nd level -> Safety security, protection
3rd level -> Social friendship, belonging
4th level -> Esteem respect, status, recognition
5th level -> Self-actualization self- fulfilment
Lower order needs (psychological, safety) must be first satisfied so high-order needs (the rest)
can be attained. One cannot move from satisfying psychological needs directly to social, because
safety needs were not satisfied. Higher-order needs are often satisfied internally (within the
person), lower-
was elaborated to ERG theory. This theory proposes only 3 core needs existence, relatedness
and growth.

Theories X (Negative) and Y (Positive):

such as: employees are lazy, dislike their work, every

interest in job is restricted to just being paid, employee cannot be trusted. Theory Y is based on
assumptions such as: employees may be ambitious, motivated, can handle work autonomy, can
be given authority and be empowered. In terms of Maslow hierarchy, higher-order needs
dominate individuals in theory Y, lower-needs dominate in theory X.

Two-factor theory (motivation-hygiene theory):

Theory developed by F. Herzberg. His studies proved that certain factors cause job satisfaction
and a separate set of factors cause job dissatisfaction. Hygiene factors are: status, job security,
salary, fringe benefits
absent, workers will be dissatisfied. There are as well motivation factors: challenging work,
recognition, responsibility, and empowerment. These factors give positive satisfaction. Despite
many criticisms, this theory is widely known by managers.

13
It focuses on 3 needs: need for achievement (nAch), need for power (nPow) and need for
affiliation (nAff). These needs are subconscious. Researches focus mainly on nAch and the
relationship between nAch and job performance. Critique: the theory has less practical approach
than others and applying and measuring concept in practice is expensive and time-consuming.

Contemporary Theories of Motivation

Cognitive Evaluation Theory:
Theory which addresses the effects of social contexts on intrinsic motivation. It states that if we
think we will be able to complete the task, we will be intrinsically motivated to complete the task,
requiring no further external motivation. And if we are extrinsically awarded for behavior which
was previously intrinsically rewarding, then the general motivation level drops. Examples of
extrinsic rewards: bonus, salary, verbal praise.

Goal-setting Theory:
This theory claims that providing specific, challenging and interesting goals, while giving constant
feedback, results in better outcome. Acceptance of a goal, however hard it can be to achieve,
results in higher effort to achieve it.
goals. MBO may not work due to unrealistic expectation, lack of commitment or the
inability/unwillingness to reward according to goal accomplishment.

Self-efficacy Theory:

-efficacy), the higher

feedback. There are four methods of enhancing self-efficacy:
enactive mastery-relevant experience with the task/job, vicarious modeling- gaining confidence
by watching others performing the task, verbal persuasion-someone persuades you that you can
succeed, and the enhancement of positive emotional responses by the reduction of stress
reactions (arousal). Training programs use enactive mastery. The Galatea effect means
communicating expectations directly to employees and self-fulfilling of this expectation.

Equity Theory:
This theory argues that employees compare their efforts and their outcomes with those of other
employees, in case of inequities they act. There are four ways one can compare his inputs and
outputs with those of co- worker: self-inside, self-outside, other-inside, other-outside. The
moderating variables of comparison are gender, length of tenure, level in the organization and
amount of education/professionalism. Same gender prefers references from the same gender. If
one spots inequity, he can make the following decisions:
Change the input
Change the output
Choose a different referent
Distort perception of self
Distort perception of others
Leave the field (e.g., leave the job)

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 Chapter 8
Motivation: From
Concepts to Applications

Motivating Potential Score (MPS)

calculated as:

MPS = ((skill variety + task identity + task significance)/3) x autonomy x feedback

Motivating jobs needs to high at least on one of the three dimensions that create meaningfulness
and, on both autonomy, and feedback. However, it is better to add the above characteristics to
improve motivation, rather than using this complex model.

Job Redesign

Job rotation (employee is performing different tasks at different times, tasks shift, employee
moves from one job to another which requires the same skills level). Reduce boredom, increase
motivation, increase flexibility as employees have more skills. But it increases training costs,
creates disruptions, reduce productivity.

Job enlargement (employee is performing more different and various tasks, his work is becoming
more diverse and it horizontally widened) The application of job enlargement is not always
successful, as employees may dislike the job even more.

Job enrichment
e.g., controlling, leading, planning, implementing, one has more responsibilities and

very well in productivity.

Alternative work arrangements

Flextime flexible time work
Job sharing two or more workers share a 40-hour week job
Telecommuting working from home

Ability and opportunity

Performance may be calculated as = (ability x motivation x opportunity to perform). Opportunity
to perform means absence of barriers that may limit the performance of an employee

Employee involvement programs

Participative management joint decision making between employees are their supervisors

15
Representative participation representation of employees who participate in organizational
decision making instead of all workers participating in decision making, in form of works councils
and board representatives.

Quality circles volunteer group composed of workers who meet to talk about workplace
improvement, and make presentations to management with their ideas, especially relating to
quality of output in order to improve the performance of the organization, and motivate and
enrich the work of employees.

Rewards as Motivators

What to pay? Pay structure -> process of establishing pay level to balance internal and external
equity. Pay more: better qualified, motivated and longer loyalty, but leads to very high cost.
How to pay? More and more organizations use variable-pay programs refers to compensation
that is received in addition to the base pay. The amount received may be linked directly to
individual, team, division and/or organization performance, and is determined (typically) by a
variety of measures important to the organization.

Piece-rate pay employees is paid stable price for each unit of completed production. Limitation:
not feasible and realistic for many jobs.

Merit-based pay pay plan that is performance-related. It provides bonuses for workers who
perform their jobs better, according to measurable criteria. Limitation: only valid upon the
performance evaluation on which it is based; dependent on the pay raise pool, resisted by (trade)
unions.

Bonuses pay plan rewarding employees for latest performance (not past)

Skill-based pay - employees are paid on the basis of the number of job skills they have or have
acquired or number of jobs they can perform. Limitation: the organization may pay the
employees for acquiring skills which are not immediately needed.

Profit-sharing plan - various incentive plans introduced by businesses that provide direct (cash)
or indirect (stock) payments to employees that depend on company's profitability in addition to
employees' regular salary and bonuses

Gainsharing - program that returns cost savings to the employees, usually as a lump-sum bonus.
It is a productivity measure, as opposed to profit-sharing which is a profitability measure

Employee stock ownership plan -

market prices as benefits.

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 Chapter 9
Foundation of Group Behaviour

A Group is defined as two or more individuals, interacting and interdependent, who have come
together to achieve particular objectives. A group is the largest set of two or more individuals who
are jointly characterized by a network of relevant communication, a shared sense of collective
identity.

Significance of Group Behavior: -

As a manager, it is important to understand the behavior of the group. Therefore, let us learn
the significant of the group behavior as discussed below: -
Group Goals
Group Function
Social Function

Stages of Group Development: - There are five stage model of group.

Forming stage: - The first stage in group development, characterized by much uncertainty.
Storming stage: - The second stage in group development, characterized by intragroup
conflict.
Norming stage: - The third stage in group development, characterized by close relationship
and cohesiveness.
Performing stage: - The fourth stage in group development, during which the group is fully
functional.
Adjourning stage: - The final stage in group development for temporary groups,
characterized by concern with wrapping up activities rather than task performance.

Group Properties: -
Roles: - A set of expected behavior patterns attributed to someone occupying a given
position in a social unit. Different groups impose different role requirement on individuals
such as: - Role Perception, Role Expectations, and Role Conflict.
Norms: - Acceptable standards of behavior within a group
members. Norms enables a group to accomplish its group. Norms enables a group to survive
in the face of threat and competition from other groups. They protect the group and its
member from outside pressure.
Status: - A socially defined position or rank given to group member by others. For example, a
top management team has a very high status as it not only sets organizational goals but also
determines how the organization to achieve them has.
Size: - Group size is important determinant of structure. Size of the group is
determined by the number of members who constitute a group. The size of group influences

17
 of group member towards groups, which is called loafing.
Cohesiveness: - The degree to which group members are attracted to each other and are
motivated to stay in the group.
Diversity: - The extent to which members of a group are similar to or different from, one
another.

Group Decision Making: -

Group decision making is a situation faced when individual collectively make a choice from the
alternatives before them. The decision is then no longer attributable to any single individual who
is a member of the group.

Group Decision Making Techniques: -

The most common form of group decision making takes place in interacting groups. Members
meet face to face and rely on both verbal and nonverbal interaction to communication. Some
problems arise in interaction, some techniques can reduce problems inherent in the traditional
interacting group they are: -
Brainstorming.
Nominal Group Techniques.
Electronic Meetings

18
 Chapter 10
Understanding Work Teams

Teams
found out that teams have more flexibility and sensitivity to changing circumstances as well as
benefitting from additional motivational factors.

What are the differences between groups and teams?

Work team: the output (result) is greater than sum of individual inputs

Work Group Work Team

Goal Share information Collective performance
Synergy Neutral (sometimes negative) Positive
Accountability Individual Individual and Mutual
Skills Random and varied Complementary

Types of teams
Problem- solving teams -> 5-12 employees from the same department meet on a weekly basis
to discuss issues such as quality, efficiency, opportunities and working conditions. They share
information on how things can be improved. They usually cannot make decisions.

Self-managed work teams -> teams that can solve problems and implement solutions as well as
take accountability for their results. Such teams count 10-15 employees who perform very
similar/interdependent jobs. Team members take some duties, tasks from their supervisors.
Nevertheless, there is not clear evidence of the effectiveness of self-managed teams. It happens
that members of those teams are more absent at work and have higher turnover statistics.

Cross-functional teams -> teams composed of employees who are comparable in a hierarchy,
but are from different departments and their common goal is to accomplish a task. It is a good
method for information exchange between different work areas. They are effective in idea
generation, problem solving and controlling complex assignments. However, they are time-
consuming (to build trust and teamwork)

Virtual teams -> teams that use ICT to have a contact with physically unreachable members in
order to accomplish a common goal. To the main challenges of these teams belong: less direct
interactions between members (least social method), face-to-face discussion advantages cannot
be transferred; members report less satisfaction with group interactions.

19
What are the characteristics of effective teams?
1. Context components:
- Adequate resources -> teams rely on resources the organization is willing to give them. Not
tiveness. Resources can include information, equipment,
staffing, assistance and support.
- Leadership and structure -> team members must agree on who is doing what. It requires
-
managed teams, the manager is limited to outside management, while team members perform
many inside management duties.

2. Composition components:
Abilities of members -> effective teams need members that have technical skills, problem-solving
skills and decision-making skills, and/or lastly interpersonal skills. The balance between these
three skill components must be kept. Skills can be learnt throughout the working process. There
-
demanding tasks, high-ability teams perform better. They are also more flexible. In case of easier
tasks, low-ability teams stay on track of the tasks, while high-ability teams are easily distracted.

abilities matter.

3. Work design components -> It

motivate because they increase degree of responsibility and make work more interesting.

4. Team processes components -> because of social loafing, the group effectiveness is less than

- Common plan and purpose: showing reflexivity

- Specific goals -> effective teams have SMART objectives/goals
- Team efficacy -> effective teams believe in themselves, have high team-efficacy. However,

- Mental models -> effective teams have similar mental models, which are knowledge and beliefs
about how tasks and work are accomplished successfully.
- Conflict levels -> not every conflict is bad. The most dysfunctional conflict type is relationship
conflict. On the contrary, positive conflict example may be task conflict. In general, teams without
conflicts can suffer from lethargy; conflict reduces probability of groupthink. Conflicts (on the

- Social loafing -> effective team is composed of people that avoid social loafing and feel
accountable for the task outcome individually and as a team.

20
 Chapter 11
Communication

Effective and successful communication in a workplace is very important. Problems with

communication are the number one cause of conflicts. Recently, communication skills were
discovered to be the most important skill of a job applicant. Communication is the spread of
information as well as understanding the meaning of the information received/given.

Communication functions
In the OB context there are several functions that communication fulfills. Those functions
are: control, emotional expression, motivation and information. First of all, communication aims
think of e.g., an employee required to report work progresses.
Moreover, communication enhances motivation all motivational techniques require
communication. Furthermore, communication as an emotional expression helps in social
interactions to express our feelings, moods, emotions, and attitudes.

Communication process
To understand communication, one needs to be familiar with the so-called communication
process in which the two objects are central sender and receiver. However, for the
communication to be effective between a message sender and receiver the following phases take
place.
As soon as there is a message ready to be sent, sender encodes the message.
The message is transmitted through a chosen channel.
The communication process can be more difficult because of the noise (anything that makes
message more difficult to be understood, received)
The communication can end with the receiver receiving and encoding the message
(understanding the meaning) or with the feedback given from receiver to message source,
which is sender.
A sender can choose either informal or formal channels to transmit the message. Formal
channels are set up by the organization and refer to transmitting work-related messages.
Informal channels are spontaneous and are the response to individual needs.

Communication Barriers
Whatever communication form we choose, we should prepare for facing communication
barriers. These barriers include: -

1. Filtering sender manipulates the information so the receiver takes it as more favorable.
Telling what others want to hear. It happens more often in case of status differences and in
organizations with higher hierarchical ladders.

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2. Selective Perception we select and interpret information we are exposed to. Not
everything that sender is transmitting, is received by receiver because the receiver picks the
information he values, is interested in, etc.
3. Information Overload we cannot process each and every information that is sent to us.
We are not capable of that (imagine processing each ad you are exposed to every day). And
thus, we select, pick and ignore some information.
4. Emotions the way we feel, influences the way we interpret information.
5. Language slag, professional jargon, dialects

Formal communication networks:

1. Formal small-group networks- Three possible networks are: chain, wheel and all channel.
The communication in chain is strictly operating in a chain of command
2. The Grapevine-
formal, does not refer to meaningfulness of messages communicated. This network has 3
main features: it is not controlled, it is seen as very trustworthy source of information, it is
often used for the vested-interest of individuals.
3. Electronic communications E-mails, Networking software: Facebook, Myspace, LinkedIn
- tool.

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 Chapter 12
Leadership

First of all, the difference between management and leadership has to be explained.
Management, according to John Kotter, means coping with complexity. Leadership, however,
means coping with change. Robert House has different view on this. He thinks that

and be busy with everyday problems.

The book defines leadership as ability to motivate, encourage a group to achieve set goals, vision
or strategy. The role of the leader may be assigned (formal) or deduced by a person from the
position he/she occupies in the organization. Managers are not equal to leaders. Nevertheless,
management needs both: effective management and effective leadership.

There are a few theories on leadership:

Trait theories on leadership

Theories based on the concept of distinguishing leaders from non-
individual qualities and characteristics. These theories claim that leaders are born, not made.
Researches have had difficulties with determining the number and naming the traits that make
a person a good leader. Then, the development of Big Five personality model made it easier for
researches. It has become noticeable that many traits attributed to leaders fall into one or many
categories of the Big Five. So, accordingly:

Extraversion is claimed to be the most important trait of leader emergence, not necessarily
are the better leaders than unsocial. Moreover,
leaders that are too assertive are less effective.
Conscientiousness and openness to experience also show strong, positive correlation to
leadership.
Agreeableness and emotional stability are not highly related to leadership.

Another trait, not included in the above Big Five model, is EI (emotional intelligence). What is

empathic leaders (leaders that can re

Nevertheless, there is more research on other traits, other than EI, and their corrections to
leadership.

to careful with linking traits with effective leadership, because traits are better predictor of

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Behavioral theories
Theories based on assumptions that certain behaviors distinguish leaders from non-leaders. The

to be leaders, what is obviously not complete truth. So, theories proposed that leadership can be
taught.

Ohio State Studies

Ohio State Studies developed 2 dimensions of leadership behavior:
Initiating structure - task-oriented behaviors that facilitate goal accomplishment. Extent, to
which a leader defines leader and group member roles, initiates action, organizes group
activities and defines how tasks are to be accomplished by the group.
Consideration people-oriented behaviors. Extent to which a leader exhibits concern for the
welfare of the members of the group. This factor is oriented towards interpersonal
relationships, mutual trust and friendship

Leaders high in consideration make their followers more job-satisfied, motivated and more
respectful.
Leaders high in initiating structure make their followers perform better in groups.

University of Michigan Studies

Also developed 2 dimensions of leadership behavior
Employee- oriented leaders: focus on interpersonal relations, have personal interest in
recognize differences between group members. Associated with
higher group productivity, greater job satisfaction.
Production oriented leaders: focus on task-related and technical issues. Associated with
lower group productivity and job satisfaction.

Blake and Mouton developed a managerial grid (leadership grid), a 9-by-9 matrix representing
two variables; concern for people and concern for production. It represents both University of
Michigan studies on employee and production-oriented leaders and Ohio State studies on
initiating structure and consideration. The managerial grid is a good tool for conceptualizing
leadership. Leader that scores 9.9 on the grid are the most effective ones.

Contingency theory
This theory states that the leader's ability to lead is contingent upon various situational factors,
including the leader's preferred style, the capabilities and behaviors of followers and also various
other situational factors.

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 Chapter 13
Power and Politics

What is power?
Power refers to the potential of the influence that a person/party can exert on another person/party
so that it acts in a way that the influencer wants. It can exist, but not be used. It is based on a
dependency variable.

Relationship between power and leadership

Leaders use power as a mean to achieve goals. Power just needs dependability, while leadership
requires goals

Bases of power
Formal power: organization.
Coercive power: power dependent on fear. A person acts in a way because he/she fears of
outcomes of incompliance. This power bases on threat of application e.g. sanction, restrictions,
pain, dismissal and so on.
Reward power: can be gained from one's capacity to reward compliance. People comply with
directives, orders because compliance generates positive benefits. There are those who reward
and those who see it as valuable. It is the opposite of coercive power.
Legitimate power: a formal power one gains by holding a particular position in an organization,
includes both coercive and reward power. In OB context, it is probably the most common.

Personal power:

Expert power: power that is based on unique skills or know-how/knowledge.

Referent power: individual power based on a high level of identification with, admiration of, or
respect for the powerholder (e.g., power of celebrities)

Personal bases of power are most effective. They relate positively to satisfaction, organizational
commitment and performance. Coercive power causes less satisfaction and less commitment.

Dependency: Relation between A and B - The greater B depends on A, the greater power A has
over B.
Dependency is inversely proportional to the alternative resources e.g. among the famous people,
fame is no longer a power. In the business context, an example of suppliers can be given - many
suppliers are better than one.

Importance
Scarcity
Impossibility of substitutes

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Power tactics
Power tactics are ways in which a person uses power in specific situations.

There are 9 different influence tactics:

Legitimacy Personal appeals
Rational Persuasion Ingratiation using flattery, praise
Inspirational Appeal Pressure
Consultation Coalitions
Exchange
Research has proved that rational persuasion, inspirational appeal and consultation are the most
effective. Pressure is probably the least effective. Combination of many may be helpful. The

Using just one soft tactic works better than using just one hard tactic and the best way of all is to
combine many soft tactics.

Politics: Power in action

Organizational Politics

formal role in the organization but that influence or attempt to influence, the distribution of
-
disadvantages.
There are 2 dimensions of political behavior: legitimate political behavior (normal day-to-day
politics, e.g. complain to supervisor, form coalitions) and illegitimate political
behavior (political actions, decision which violate rules, are abusive e.g. sabotage).

The reality of politics: organizations are politics-loaded because of competition for scarce,
limited resources as well as disagreement between different parties in many issues. Politics exists
because there is a lot ambiguity in interpreting facts and some people use politicking (using
influence to support facts aiming at achieving their interests).

Causes and consequences of political behavior:

Factor encouraging political behavior can be individual or organizational.
Individual factors: some traits, qualities are connected with political behavior. These traits
are high self-monitoring, internal locus of control, High Machiavellian personality,
organizational investment, perceived job alternatives, expectations of success.
Organizational factors: factors resulting from organizational culture and internal, working
environment. Certain cultures do promote political activity. Organizational factors that
promote political behaviors are: resource reallocation, promotion opportunities, low trust,
role ambiguity, vague evaluation system, zero-sum reward practices (win/lose approach),
democratic decision-making, high-performance pressures, self-serving senior managers.

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 Chapter 14
Conflict and Negotiation

Conflict is the process initiated when one party perceived as about to be, or being negatively
affected by another party on something that the first party cares about.

School of thoughts on conflict:

Traditional school of conflict assumes that conflict must be avoided at all costs and that it
conflict is perceived as dysfunctional, bad,
violent.
Human relations school of conflict assumes that conflict is a natural response and should be
accepted as such. Still, the theory argues it cannot be avoided and sometimes can be
functional.
Interactionist school of conflict

something necessary.

The theory distinguished between functional and dysfunctional conflicts. Functional conflicts
help the group, while dysfunctional worsen its operation.
It also distinguishes between task, relationship and process conflicts. Relationship conflicts are
usually dysfunctional. Low levels of process conflicts as well as low/moderate levels of task
conflicts are functional.

The conflict process

Stage 1 - Potential opposition or incompatibility
Three categories of conditions that can lead to a potential conflict:
Communication (misunderstandings, a lot of noise in communication channel, jargon,
different connotations of words, etc.)
Structure (assignment size, specialization, rewards, dependence between members, etc.)
Personal variables (personality, emotions, values, etc.)

Stage 2 Cognition and personalization

Two possibilities: felt conflict or perceived conflict.

conflict issues tend to be defined and parties think how to react. Moreover, emotions play a
role in how we perceive the conflict situation. Negative emotions tend to worsen the situation,
while positive emotions encourage agreement.

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Stage 3 Intentions
Conflict-handling intentions: competing, collaborating, compromising, avoiding and
accommodating.
Competing - assertive and uncooperative parties want to satisfy their interests
Collaborating - assertive and cooperative parties want to reach agreement that satisfies
everyone
Compromising moderate level of assertiveness and cooperativeness parties are willing
to resign from some of their postulates/potential benefits
Avoiding unassertive and uncooperative withdrawal or suppression
Accommodating unassertive and cooperative
as superior and place them above own concerns.

Stage 4 Behavior

conflict-intensity continuum the higher the conflict level, the more intense the reaction. High
level of conflicts usually implies dysfunctional outcomes. There are however conflict
management techniques which can minimize or stimulate the conflict level to reach the
required conflict degree.
Conflict-resolution techniques: problem- solving, compromise, resources expansion,
superordinate goals, smoothing, avoidance, authoritative command, altering the human
variable and altering the structural variables.
Conflict-
s advocate appointment.

Stage 5 Outcomes
Functional outcomes eliminates groupthink, enhance creativity and decision-making quality,
increase productivity. Cultural diversity acts in favor of functional conflicts. Functional conflicts
can be created rewarding people who go against the mainstream with their ideas, programs

Successful organizations reward dissenters and punish conflict avoiders.

Dysfunctional outcomes
satisfaction, commitment.

Negotiation: Bargaining strategies

Distributive bargaining
The different parties are trying to divide something up-distribute something, creation of
win//lose situation. The parties assume that there is not enough to go around, and they cannot
"expand the fixed pie," so the more one side gets, the less the other side gets. In OB context,
the best example is wage negotiation.

The process of distributive bargaining involves 2 negotiators. Each of them has his target (most
acceptable situation) and resistance point (the least acceptable situation) as well as aspiration
range (area between these 2 points where negotiation can take place).

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Integrative bargaining
The parties are trying to make more of something. Creation of win/win solutions. It is
preferable to the distributive bargaining because it builds relations.
There must be some conditions for integrative bargaining to succeed: parties involved in
-
sharing.
Teams bargain more in integrative style than individuals
When more issues are under negotiation, more likely win/win situation will appear
Compromise does not almost imply win/win outcomes because it reduces need for
integrative bargaining

The negotiation process:

1) Preparation and planning -
negotiated agreement) the least acceptable situation
2) Definition of ground rules
3) Clarification and justification
4) Bargaining and problem solving
5) Closure and implementation

Personality traits lack of strong evidence, but some of them indicate that certain traits of
The Big Five are connected to negotiation processes Agreeable and extraverted negotiators
do not perform well in distributive bargaining. Also, intelligence seems to influence
bargaining.
Moods/emotions yes, depends on the bargaining type. In distributive bargaining, angry
negotiators perform better. In integrative bargaining positive moods/emotions have
positive influence.
Gender
Men are supposedly slightly better negotiators than women. Women are exposed to
stereotype threat, if they do not confirm they are blamed for breaking gender stereotype.
Women may also more influenced by their own attitudes and actions.

Third-party negotiations
Mediator A neutral party who assists in negotiations and conflict resolution, the process
being known as mediation
Arbitrator - legal technique for the resolution of disputes outside the courts, wherein the
parties to a dispute refer it to one or more persons, by whose decision they agree to be
bound. Arbitrator has authority to dictate the agreement.
Conciliator - parties to a dispute agree to utilize the services of a conciliator, who then
meets with the parties separately in an attempt to resolve their differences (serves as
informal communication link between parties)
Consultant is a trained in conflict management third party who tries to assist creative
problem solving by communication and proper analysis.

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 Chapter 15
Foundation of Organization Structure

Organizational Structure:
It is defined as how activities such as task allocation, coordination, and supervision are directed
toward the achievement of organizational aims. Organizational structure affects organizational
action and provides the foundation on which standard operating procedures and routines rest.

Elements of Organization Structure: -

Work specialization business leaders must consider the job tasks and specific duties
associated with given positions. Dividing work tasks among different jobs and assigning
them to definite levels, is the role of work specialization elements.
Departmentalization departments are often a group of workers with the same overall
functions. They are often broken down by broad categories such as functional, product,
geographical, process and customer. Common departments include accounting,
manufacturing, customer service and sales.
Chain of command the unbroken line of authority that extends from the top of the
organization to the lowest echelon and clarifies who reports to whom.
Span of control is the organizational design element that considers the capacity of any
manager. There are limits to the number of people one person can oversee and supervise
Centralization and decentralization are organizational design elements deciding the degree
which decision-making is made at one central level or at various levels by employees.
Formalization the degree to which jobs within an organization are standardized.

Common Organizational Designs: -

Simple structure is defined as a design with low departmentalization, wide spans of control,
centralized authority, and little formalization.
Bureaucracy an organization structure with highly routine operating task achieved through
specialization, much formalized rules and regulation, tasks that are grouped into functional
departments, centralized authority, narrow span of control, and decision making that
follows the chain of command.
Matrix structure is one that assigns specialists from different functional departments to
work on one or more projects.

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 Chapter 16
Organization Culture

Organizational Culture is a set of assumptions, belief, values, and norms that are shared
by
meaning held by members that distinguishes the organization from other organizations.

Impact of Organizational Culture: -

Organizational culture, being unique and distinctive, prescribe some specific modes of
behavior for its members. These modes of behavior, then, affect the entire behavioral
processes. Though such behavior processes may have different dimension, they
ultimately create impact on objective setting, work ethic, motivational pattern, and
organizational processes.

Culture as a Liability: -
The culture of an organization provides boundaries and guidelines for the behavior of the
organizational members. Culture is usually an asset to an organization, but can become
a liability when it acts as a barrier to change and prevents the company from adapting to an
unfamiliar environment.
Institutionalization
Barriers to Change
Barriers to Acquisitions and mergers

Creating Organizational Culture: -

Organizational culture is a long-
and values and match the cultural requirements of the society of which the organization
is a part.

Let us discuss the step involved in the process of creation of organ izational culture:
Establishing Values: The first step in creating organizational culture is
establishment of values which will govern members of the organization.
Creation Vision: Vision represents the imagination of future events and prepares
the organization for the same.
Operationalizing Value and Vision: The third step is preparing a written statement
containing its values and vision and communicates these to organizational
members.

31
 Socialization of Employees: It is the process by which new employees understand the
company hierarchy works and the ways to
function effectively in the organization.

Spirituality and Organizational Culture: -

Organizations that promote a spiritual cultural recognize that people have both a mind and a
spirit, seek to find meaning and purpose in their work, and desire to connect with other human
beings and be part of a community.

Characteristics of a Spiritual Organization: -

The unique characteristics that differentiate a spiritual organization from others are: strong
sense of purpose, focus on individual development, trust and openness, employee
empowerment and toleration of employee expression.

Creating a positive Organizational Culture: -

Creating a positive culture may sound hopelessly naïve or like a Dilbert-style conspiracy. Positive
organizational culture emphasizes building on employee strengths, rewards more than it punish,
and emphasizes individual vitality and growth.

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 Chapter 17
Human Resource
Policies and Practices

An organization's human resource policies and practices create important forces that shape
employee behavior and attitudes. In this chapter, we specifically discussed the influence of
selection practices, training and development programs, and performance evaluation systems.

If properly designed, an organization's selection practices will identify competent candidates and
accurately match them to the job and the organization. Although employee selection is far from
a science, some organizations fail to design a selection system that can achieve the right person-
job fit.

The most obvious effect of training programs is direct improvement in the skills necessary to
successfully complete the job. Increased ability thus improves potential, but whether that
potential becomes realized is largely an issue of motivation.

A second benefit of training is that it increases an employee's self- efficacy-that is, a person's
expectation that he or she can successfully execute the behaviors required to produce an
outcome. Employees with high self-efficacy have strong expectations about their abilities to
perform in new situations. They're confident and expect to be successful. Training, then, is a
means to positively affect self-efficacy because employees may be more willing to undertake job
tasks and exert a high level of effort.

A major goal of performance evaluation is to assess an individual's performance accurately as a

basis for allocating rewards. If evaluation is inaccurate or emphasizes the wrong criteria,
employees will be over- or under rewarded. As demonstrated in Chapter 7 in our discussion of
equity theory, evaluations perceived as unfair can result in reduced effort, increases in
absenteeism, or a search for alternative job opportunities.

The content of the performance evaluation also influences employee performance and
satisfaction. Specifically, performance and satisfaction are increased when the evaluation is
based on behavioral and results-oriented criteria, when career issues as well as performance
issues are discussed, and when the employee has an opportunity to participate
in the evaluation.

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 Chapter 18
Organizational Change

Organizational Change is the alternation of work environment in organization. It implies a new

equilibrium between different components of the organization- technology, structural
arrangement, job design and people.

Factors in Organizational Change

Organizational Change is required to maintain equilibrium between various external and internal
forces to achieve organizational goals.
Planned change: Planned change is the deliberate design and implementation of a structural
innovation, a new policy or goals in operating philosophy or style.
Process of planned change: A major Organizational Change required considerable planning. The
various steps involved in a planned change are:
Identifying need for change
Elements to be changed
Planning for change
Assessing change forces
Change action
Feedback

Resistance to change
Resistance to change is the action taken by individuals and groups when they perceive that a
change that is occurring as a threat to them.

Factors in resistance to change

People tend to evaluate the effect of change individually but they express it through group in
collective form. The reason underline resistance to change may be identified at two levels-
individual resistance and economic factors.

Change Agents
A change agent is a person from inside or outside the organization who helps an organization
transform itself by focusing on such matters as organizational effectiveness, improvement, and
development.

Organizational growth and change

There are five phases in Organizational growth- creativity, direction, delegation, coordination and
collaboration.

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 Summary

The subject of organizational behavior is composed of a large number of

theories that are research based. Research studies, when cumulatively
integrated, become theories, and theories are proposed and followed by
research studies designed to validate them. The concepts that make up
OB, therefore, are only as valid as the research that supports them. The
topics and issues in this book are for the most part research-derived.
They represent the result of systematic information gathering rather

that we have all the answers to OB issues. Many require far more
corroborating evidence. The generalizability of others is limited by the
research methods used. But new information is being created and
published at an accelerated rate. To keep up with the latest findings, we
strongly encourage you to regularly review the latest research in
organizational behavior.

35
 My OPINION

I like this book because this book does the best job in incorporating the latest
concepts and practices in organizational behavior and most comprehensive
coverage with latest development.
Personality, Perception and Motivation is my favorite part of the book. It is a major
factor to think and understand in a human because different people react
differently in a same situation.
This book has a proper blend of theories and practice of organizational behavior.
I would recommend this book to MBA/PGDM/M.Com. Students as the present
edition is ideally suited to other relevant PG courses students and Professors of the
different collages.
This book is helpful for the Professors to show the new path for better
understanding different dimensions of human behavior their students. The
conclusion of various Indian research studies on different aspects of organizational
behavior has been presented in this book so the researchers get a great help from
this book.

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