Organizational Behavior

A Management Challenge

Linda K. Stroh,Gregory B. Northcraft,Margaret A. Neale,(Co-author) Mar Kern,(Co-author) Chr Langlands, Jerald Greenberg

• Publisher: Routledge
• Year: 2001
• ISBN:
  9781135648701
• Edition: 3
• Topic: Psychologie
• Subtopic: Histoire et théorie en psychologie

This textbook in Organizational Behavior is appropriate for undergraduate as well as MBA students of management and psychology. Very readable, this textbook, authored by accomplished Management professors, will focus on the latest research in OB.

PART 1
Introduction

CHAPTER 1
Organizational Behavior: A Management Challenge

THE KNOWING-DOING GAP

Research, experience, and common sense all suggest that to maintain a competitive advantage, organizations must act on what they know—including what they know about treating people as assets.¹ Yet, even in the midst of today’s brutally competitive environment, many organizations’ actions still don’t acknowledge the value and potential of their employees. Organizations often look to the latest management fad or quick fix to solve their problems—merging, acquiring, downsizing, outsourcing, reengineering— all the while ignoring basic people-management issues they know to be fundamental to business success.

In a survey of a restaurant chain, Jeffrey Pfeffer and Robert Sutton found that the restaurant’s managers recognized the importance of sharing information with their people, providing them feedback, and involving them in initiatives to improve operations. However, there were big differences between what the restaurant managers believed produced success and what they reported actually practicing in their restaurants.

Pfeffer and Sutton believe this represents an example of the “knowing-doing gap.” They suggest eight guidelines for closing this gap²:

1. Understand why before how. If you do not understand why something is happening, the how will be ignored.
2. Knowing comes from doing and teaching others how. Awareness comes before true knowledge.
3. Action counts more than elegant plans and concepts. We learn by doing.
4. There is no doing without mistakes. Reasonable failure should never be received with anger.
5. Fear fosters knowing-doing gaps; therefore, drive out fear.
6. Fight the competition, not each other.
7. Measure what matters and what turns knowledge into action.
8. What leaders do, how they spend their time, and how they allocate resources matters.

The Men’s Wearhouse provides an excellent example of a company whose management acts on what it knows about managing people. Not only does The Men’s Wearhouse management recognize employees’ untapped human potential, but management also takes the responsibility for helping employees realize it. George Zimmer, the company’s founder, has even stated that his business is the people business, not the suit business.³ Zimmer’s insight about the business he is in, combined with targeted action, have enabled The Men’s Wearhouse to become a phenomenal success both financially and organizationally.

INTRODUCTION

This book is about organizational behavior—the description and explanation of how people behave in organizations. As a broad-based field, organizational behavior encompasses the study of leadership, power and politics, performance management, organizational design, and much more. Thus, any book about organizational behavior is necessarily about people and about closing the gap between what is known about how and why people behave in organizations and what we do about managing those people successfully.

Before we can begin discussing organizational behavior, we must first agree on what we mean by the word organization. J.D.Mooney provides a good working definition of the word in his book The Principles of Organization:

Organization is the form of every human association for the attainment of a common purpose…the framework of every group moving toward a common objective…. It refers to the complete body, with all its correlated functions…. It refers to the coordination of all these [functions] as they cooperate for the common purpose.⁴

Mooney emphasized that organizations are “pure process”—not buildings, machines, or other tangible objects. Organizations are practices, procedures, and relationships entered into to coordinate human talents and efforts toward common goals. They are formed when people come together to combine their talents and efforts.

A quick look at the daily news reveals both the latest discoveries and breakthroughs achieved by organizations and the latest fiascoes and bankruptcies. Clearly, some organizations succeed in combining the talents and efforts of their members, and the results are major accomplishments. Other organizations never produce much of anything.

Why are some organizations successful, while others fail? Why are some workers fiercely loyal to and proud of the organizations to which they belong, while other organizations are plagued by absenteeism, turnover, and even sabotage from within? Why do 40% of new technological “wonders” fail to accomplish their stated objectives?⁵ Why are 70% of mergers and acquisitions considered failures or only minimally successful?⁶ We suspect that after you read this book, you will realize that many of these failures occur because managers don’t make the most of what we know about how and why people in organizations behave the way they do.

Most managers recognize that buying a new technological innovation for an organization is fairly easy. Managing the creative, talented employees who must make the most of that innovation is not so easy. We live in an age of unprecedented wealth and abundance of business opportunity, but an organization’s success—or failure—is still largely determined by how well the organization manages its people. Organizational behavior does matter. According to Rayport, an associate professor at Harvard University, “The success of e-commerce business will hinge largely on the art of management even as it is enabled by the science of technology.”⁷

Before discussing the specifics of how and why people in organizations behave the way they do, it is important to have a basic understanding of what constitutes behavior in organizations. In this chapter we will contrast two approaches to understanding such behavior: a prescriptive and a descriptive view.

MANAGEMENT: A PRESCRIPTIVE VIEW

For an organization to accomplish its objectives, its managers must understand how and why people behave the way they do. Thus, an understanding of organizational behavior provides the foundation for good management and, as demonstrated by The Men’s Wearhouse, organizational success.

From the point of view of someone joining an organization for the first time, perhaps a recent graduate of a business program, the importance of organizations probably seems obvious. Everyone knows that people come together and form organizations because organizations can accomplish things that individuals can’t. Therefore, when discussing behavior in organizations, we are really talking about taking advantage of the performance benefits of groups over individuals. Jeff Bezos, the chief executive officer of Amazon.com, epitomizes someone who has acted on his understanding of this concept. You can read more about how Bezos acted on his prescription for management in “FOCUS ON: Organizational Behavior.”

Amazon.com is one of the great success stories of the latest generation of U.S. business organizations. Of course, whether Amazon.com can continue to succeed when faced with new challenges from the business environment is yet to be determined. Although Jeff Bezos is unquestionably important to this success story, Amazon.com could not have succeeded the way it has without the effort and commitment of thousands of people working together.

FOCUS ON
ORGANIZATIONAL BEHAVIOR

JEFF BEZOS—A TWENTY-FIRST-CENTURY PROPHET? Once a Wall Street whiz, Jeff Bezos is now the head of the biggest store on the Web, Amazon.com. The billionaire, who wears rumpled chinos to work, is considered by many, including Time magazine, to be “the leading prophet of the age of electronic commerce.” The weekly news magazine named him the most important person shaping technology in 1999.

Amazon.com got its start as a tiny online bookseller in 1995, and later became the most powerful merchant in cyberspace, selling more than $3 million worth of merchandise, from books to music to toys, each day. Much of the company’s success has been due to its development of a giant customer base and “its one-click ordering system, Amway-like affiliate network and here-everyoneknows- your-name customer service—to expand Microsoft-like into nearly everyone’s business.” What remains to be seen, however, is whether Bezos’s strategic vision is remarkably accurate or terribly misguided.

In the late 1990s, Jeff Bezos turned the retail world upside-down. He has been a leader in identifying business trends that are likely to grow in importance. Three such trends are especially noteworthy:

1. Whether a company’s base of operations is strictly in its home country or across the globe, connecting people is the key to building the synergies necessary for success.
2. Consumers are not a homogenous group; to market a product effectively, a company must target customers based on their multiple characteristics, including their race, age, and ethnicity.
3. Technology will continue to have an enormous impact on business. These three key trends—globalization, inclusion, and technology—are referred to and discussed throughout this book. As Amazon.com has found, understanding these three trends is critical to successfully managing behavior in organizations.

Source: Adapted from Anders, G. (1999, July 12). The view from the top: The past, present and future of the Internet economy, as seen by Amazon.com’s Jeff Bezos. Wall Street Journal, p. R52; Buechner, M.M., Grossman, L., Hamilton, A., Syken, B., Thomas, O., Wice, N., & Winters, R. (1999, October 4). Digital 50—The most important people shaping technology today. Time, p. 25; Buechner, M.M., et al.

There are two reasons people come together in organizations: to enhance their effectiveness and to boost their efficiency. These terms are defined in Figure 1–1.

MANAGEMENT FUNCTIONS

Researchers have identified several primary managerial functions that managers must accomplish for organizations to outperform individuals and achieve effectiveness and efficiency. Henri Fayol is credited with first identifying these functions in 1916, which, as shown in Figure 1–2, are planning, organizing, coordinating, commanding, and controlling.⁸

FIGURE 1–1 Two Reasons for Organizing

Effectiveness: The ability of an organization to accomplish an important goal, purpose, or mission. Organizations combine the efforts and talents of many individuals, thereby bringing into reach objectives that would be out of reach for individuals.

Efficiency: The ability of an organization to maximize productivity per unit of resources (labor and capital). Organizations enable individuals to accomplish tasks more quickly and with fewer mistakes than if any individual were working alone.

FIGURE 1–2 Fayol’s Management Functions

Fayol’s five management functions represent a prescription for managing behavior in organizations:

Planning: Thinking before taking action

Organizing: Arranging for material and personnel resources

Coordinating: Setting up the policies and procedures that govern worker behavior

Commanding: Motivating and directing the efforts of the workforce in pursuit of the organization’s plans

Controlling: Monitoring and correcting progress toward the organization’s goals

PLANNING. Planning is the thinking that precedes action in an organization. Planning is concerned with how the organization will produce or provide the goods or services that define the purpose of the organization. The focus is on identifying the strategies and tactics that will enable the organization to attain its goals and fulfill its mission efficiently. What resources (including people) are necessary to produce or provide the goods or services that are central to the organization’s mission? How will these resources be obtained?

ORGANIZING. Once the organization has an action plan in hand, organizing must take place. Organizing occurs when the organization arranges for the material and personnel resources needed to accomplish its plan. Staffing, for example, is the process of supplying a workforce (people) to fill the organization’s designed structures.

COORDINATING. Coordinating is the process by which a structure is created through which the members of the organization can produce its central goods or services. This structure has several distinct components. First is the structuring of individual job responsibilities and duties. Who will do what, and how will they do it? Next is the structuring of relationships among individual jobs. What will be the reporting relationships?

Who will be supervising whom? What departments will be necessary? How will these departments interact? Finally, there is the physical structuring of th...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Dedication
• Preface
• About the Authors
• Part 1: Introduction
• Part 2: Individual Behavior
• Part 3: Behavior in Groups
• Part 4: Managing for Performance
• Part 5: The Larger Context of Organizational Behavior
• Glossary
• Photo Credits