4 Part One Introduction Welcome to the Field of Organizati.docx

4 Part One Introduction
Welcome to the Field of Organizational Behaviorl
The opening story about Brasilata reveals some important truths
about organizations that
succeed in todays turbulent environment. I n every sector of the
economy, organizations
need to be innovative, employ skilled and motivated people who
can work in teams, have
leaders wi th foresight and vision, and make decisions that
consider the interests of multiple
stakeholders. In other words, the best companies succeed
through the concepts and prac-
tices that we discuss in this book on organizational behavior.
The purpose of this book is to help you understand what goes on
in organizations, in -
cluding the thoughts and behavior of employees and teams. We
examine the factors that
make companies effective, improve employee well-being, and
drive successful collabora-
tion among coworkers. We look at organizations from numerous
and diverse perspectives,
from the deepest foundations of employee thoughts and
behavior (personahty, self-concept,
commitment , etc.) to the complex interplay between the
organization's structure and
culture and its external environment. Along this journey, we
emphasize why things happen
and what you can do to predict and manage organizational
events.

We begin in this chapter by introducing you to the field of
organizational behavior (OB)
and why it is important to your career and to organizations.
Next, this chapter describes the
"ultimate dependent variable" i n OB by presenting the four
main perspectives of organiza-
tional effectiveness. This is followed by an overview of three
challenges facing organiza-
tions: global izat ion, increasing workforce diversity, and
emerging employment
relationships. We complete this opening chapter by describing
four anchors that guide the
development of organizational behavior knowledge.
The Field of Organizational Behavior
"r" I Organizational behavior (OB) is the study of what people
think, feel, and do in and around
' organizations. It looks at employee behavior, decisions,
perceptions, and emotional
responses. It examines how individuals and teams in
organizations relate to one another and
to their counterparts in other organizations. OB also
encompasses the study of how organi-
zarions interact wi th their external environments, particularly
in the context of employee
behavior and decisions. OB researchers systematically study
these topics at multiple levels of
analysis, namely, the individual, team (including interpersonal),
and organization.^
The definition of organizational behavior begs the question:
What are organizations?
Organizations are groups of people who work interdependently
toward some purpose.^
Notice that organizations are not buildings or government-

registered entities. In fact, many
organizations exist without either physical walls or government
documentation to confer
their legal status. Organizations have existed for as long as
people have worked together.
Massive temples daUng back to 3500 bc were constructed
through the organized actions of
multitudes of people. Craftspeople and merchants i n ancient
Rome formed guilds, com-
plete wi th elected managers. More than 1,000 years ago,
Chinese factories were producing
125,000 tons of iron each year.^
Throughout history, these and other organizations have
consisted of people who com-
municate, coordinate, and collaborate wi th one another to
achieve common objectives.
One key feature of organizations is that they are collective
entities. They consist of human
beings (typically, but not necessarily, employees), and these
people interact wi th one an-
other in an organized way. This organized relationship requires
some minimal level of com-
munication, coordination, and collaboration to achieve
organizational objectives. As
such, aU organizational members have degrees of
interdependence wi th one another; they
accomphsh goals by sharing materials, information, or expertise
with coworkers.
A second key feature o f organizations is that their members
have a collective sense of
purpose. This collective purpose isn't always well defined or
agreed on. Furthermore,
though most companies have vision and mission statements,
these documents are

Chapter One Introduction to the Field of Organizational
Behavior 5
Until the 19305, most
organizational research and
practice tried to improve work
efficiency by changing working
conditions and job duties.
Employee thoughts and feelings
were ignored and usually
considered irrelevant Elton
Mayo (left in photo); his research
assistant, and later professor in
his own right, Fritz Roethlisberger
(right); and others at Harvard
University adopted a completely
different view. Their "human
relations" studies at Western
Electric Hawthorne Works near
Chicago found that employee
attitudes, formal team dynamics,
informal groups, and supervisor
leadership style strongly
influenced employee performance
and well-being. Historians suggest
that this human relations view laid
the foundation for the field of
organizational behavior as we
know it today.'
sometimes out of date or don't describe what employees and
leaders t ry to achieve i n
reality. Still, imagine an organization without a collective sense

o f purpose. It would be
a collection o f people wi thout direction or unifying force. So,
whether it's manufactur-
ing steel cans at Brasilata or designing better aircraft at Boeing,
people work ing in orga-
nizations do have some sense of collective purpose. "A
company is one of humanity's
most amazing inventions," said the late Steve Jobs, cofounder of
Apple Inc. and Pixar
Animat ion Studios. "It's totally abstract. Sure, you have to bu i
ld something wi th bricks
and mortar to put the people i n , but basically a company is this
abstract construct we've
invented, and it's incredibly powerful ." '
organizational behavior (OB)
The study of what people think,
feel, and do in and around
organizations.
HISTORICAL FOUNDATIONS OF
ORGANIZATIONAL BEHAVIOR
Organizational behavior emerged as a distinct field around the
early 1940s, but organiza-
tions have been studied by experts in other fields for many
centuries. The Greek philoso-
pher Plato wrote about the essence of leadership. Around the
same time, the Chinese
philosopher Confucius discussed the virtues of ethics and
leadership. I n 1776, Adam Smith
discussed the benefits of job specialization and division o f
labor. One hundred years later,
the German sociologist Max Weber wrote about rational
organizations, the work ethic, and
charismatic leadership. Soon after, industrial engineer Frederick
Winslow Taylor proposed

systematic ways to organize work processes and motivate
employees through goal setting
and rewards.**
From the 1920s to the 1940s, Elton Mayo, Fritz Roethlisberger,
and their Harvard
University colleagues introduced the "human relations" school
of management, which
emphasized the study o f employee attitudes and informal group
dynamics in the work-
place. Also dur ing that time, polit ical philosopher and
social worker Mary Parker Follett advocated new ways
of t h i n k i n g about several OB topics, inc lud ing con-
structive conflict, team dynamics, organizational de-
mocracy, power, and leadership. In the late 1930s,
Chester Barnard wrote insightful reviews o f organiza-
t iona l communica t ion , coord ina t ion , leadership and
organizations
Groups of people who work
interdependently toward some
purpose.
authority, organizations as open systems, and team dynamics. '
This brief historical tour
indicates that OB has been around for a long time; it just wasn't
organized into a unified
discipline un t i l the 1940s.
19 connect
Does OB All Make Sense? Go to

www.nicgrawhJllconnect.com to
assess how well OB knowledge is
consistent with your common
sense knowledge, and to assist
your learning about the anchors
of OB knowledge.
WHY STUDY ORGANIZATIONAL BEHAVIOR?
Organizational behavior instructors face a challenge: Students
who have not yet begun
their careers tend to value courses related to specific jobs, such
as accounting and market-
i n g . ' However, OB doesn't have a specific career path—there
is no "vice president of
OB"—so students sometimes have difficulty recognizing the
value that OB knowledge can
offer to their future. Meanwhile, students w i th several years of
work experience identify
OB as one of the most important courses. Why? Because they
have learned through expe-
rience that OB does make a difference to one's career success.
OB helps us make sense of
and predict the wor ld in which we live. '" We use OB theories
to question our personal
beliefs and assumptions and to adopt more accurate models o f
workplace behavior. Some
experts suggest that OB knowledge even helps us make sense of
the broader wor ld , not
just what goes on inside organizations."
But probably the greatest value of OB knowledge is that it helps
people get things done
in organizations.'^ Everyone in business, government, and not-
for-profit firms works with
other people, and OB provides the knowledge and tools to
interact wi th others more effec-

tively. Building a high-performance team, motivating
coworkers, handling workplace con-
flicts, influencing your boss, and changing employee behavior
are just a few of the areas of
knowledge and skills offered in organizational behavior. No
matter what career path you
choose, you' l l f ind that OB concepts play an important role in
how you perform your job
and work more effectively within organizations.
' J •:••->.., ' ' for is for Everyone Organizational behavior is
important
for anyone who works in organizations, not just for managers.
In fact, this book pioneered
the notion that OB knowledge is for everyone. Whether you are
a geologist, financial ana-
lyst, customer service representative, or chief executive officer,
you need to understand and
apply the many organizational behavior topics that are
discussed in this book. Yes, organi-
zations w i l l continue to have managers, and this book
recognizes the relevance of OB
knowledge in these vital roles. But this book also recognizes the
reality that all employees
are increasingly expected to manage themselves and work
effectively with one another in
the workplace. In the words o f one forward-thinking OB writer
more than four decades
ago; Everyone is a manager."
organizational effectiveness
A broad concept represented
by several perspectives,
including the organization's fit
with the external environment,
internal subsystems

configuration for high
performance, emphasis on
organizational learning, and
ability to satisfy the needs of
key stakeholders.
OB and the Bottom Line Up to this point , our answer to the
question "Why
study OB?" has focused on how organizational behavior
knowledge benefits you as
an individual . However, OB knowledge is just as important for
the organization's finan-
cial health. Brasilata has flourished because it leverages human
capital, employee en-
gagement, creativity, and teamwork. Numerous studies have
reported that these and
other OB practices discussed in this book tend to improve the
organization's sur-
vival and success.'"
For example, one investigation found that hospitals w i th
higher levels o f specific
OB activities (e.g., t raining, staff involvement, reward and
recognition) have lower
patient mortali ty rates. Another study found that companies
receiving "best place to
work" awards have significantly higher financial and long-term
stock market perfor-
mance. A n d as we w i l l learn i n Chapter 5, employee
engagement is associated wi th
significantly higher sales and profitability. The bottom-line
value of organizational be-
havior is also supported by human capital and investment
portfoho studies. These i n -
vestigations suggest that specific OB characteristics (employee

attitudes, work- l i fe
balance, performance-based rewards, leadership, employee
training and development,
etc.) are important "positive screens" for selecting companies
wi th the best long-term
stock appreciation.'^
Behavior 7
mcomect
To assist your learning and test
your knowledge about perspectives
of organizational effectiveness, go
to www.mcgrawhillconnect.com,
which has activities and test
questions on this topic.
Perspectives of Organizational Effectiveness
Apple, Inc., and Google, Inc., are the two most admired
companies in the world, according
::_ - to Fortune magazines annual list.'^ Yet, neither of these
companies was on anyone's radar
screen a dozen years ago. Apple was on life support in the late
1990s, barely clinging on to a
few percentage points of market share in the computer industry.
Google wasn't even regis-
tered as a company. It was little more than a computer project
by two Stanford PhD stu-
dents that was quickly outgrowing the dorm room where their
equipment was housed.
How did Apple and Google achieve their incredible success?

They relied on innovation
as their engine for growth, invested in and supported their
employees, were led by visionary
leaders, and applied many other practices that we wi l l discuss
throughout this book. More
generally, Apple and Google have consistently applied the four
perspectives o f organiza-
tional effectiveness that we discuss over the next few pages.
Almost all organizational behavior theories have the implic i t
or explicit objective o f
making organizations more effective.'' In fact, organizational
effectiveness is considered
the "ultimate dependent variable" in organizational behavior.'*
This means that organiza-
tional effectiveness is the outcome that most OB theories are
ultimately t rying to achieve.
Many theories use different labels—-organizational
performance, success, goodness, health,
competitiveness, excellence—but they are basically presenting
models and recommenda-
tions that help organizations be more effective.
Over the next several pages, we w i l l describe a coherent
model of organizational effec-
tiveness that incorporates four complementary perspectives. But
first, we need to mention
the now discredited "goal attainment" definition of
organizational effectiveness. This view,
which was popular for many years, states that companies are
effective when they achieve
their stated organizational ob j ec t i ve s ,Acco rd ing to this
defini t ion, Home Depot, the
world's largest retailer o f home improvement products, would
be an effective organization
i f it meets or exceeds its annual sales and profit targets. Today,

we know this isn't necessarily
so. Any leadership team could set corporate goals that are easy
to achieve yet would put the
organization out of business. These goals could also be left in
the dust by competitors' more
Apple, Inc., is rated as one aggressive objectives.
of the world's most admired Worse still , some goals might aim
the organization in the wrong direction. Consider
companies, yet a dozen years the following true story: The
board of directors of a major airline gave the incoming CEO
ago it was on life support with
a dwindling computer market
share. Apple's incredible
turnaround illustrates how
companies achieve success
by paying attention to all four
perspectives of organizational
effectiveness. Apple deftly
anticipated and fluidly adapted
to rapidly changing consumer
needs (such as by introducing
theiPod, iPhone, andiPad). It
became a learning organization
by hiring key people and
acquiring small firms. It nurtured
high-performance teams for
hardware design, software
development, and marketing.
And except for a few trip-ups,
it has generally met stakeholder
expectations and improved its
corporate social responsibility.'"
mmm

I mom
mmm
8 Part One /ntroduction
a mandate to reduce costs and dramatically improve profi tabil i
ty. The CEO accom-
plished these organizational goals by reducing the t ra in ing
budget and canceling the
purchase o f new aircraft. W i t h i n a few years (after the CEO
had taken a job wi th another
air l ine) , the company was suffering from higher maintenance
costs to keep the old
planes f lying safely and was losing customers to airlines w i t h
better-trained staff and
more modern fleets. This airline never recovered; it was
eventually acquired by a larger
competitor. The CEO achieved the company's goals, but the
result was a less effective
organization in the long run.
This book takes the view that the best yardstick of
organizational effectiveness is a com-
posite of four perspectives: open systems, organizational
learning, high-performance work
practices, and stakeholders.-' Organizations are effective when
they have a good fit w i th
their external environment, are learning organizations, have
efficient and adaptive internal
subsystems (i.e., high-performance work practices), and satisfy
the needs of key stake-
holders. Let's examine each of these perspectives in detail.
OPEN SYSTEMS PERSPECTIVE

The open systems perspective of organizational effectiveness is
one of the earUest and most
well-entrenched ways o f thinking about organizations.-^^
Indeed, the other major organiza-
tional effectiveness perspectives might be considered detailed
extensions o f the open sys-
tems model. The open systems perspective views organizations
as complex organisms that
"live" wi th in an external environment, rather like the
illustration i n Exhibit 1.1. The word
open describes this permeable relationship, whereas closed
systems operate without depen-
dence on or interaction wi th an external environment.
As open systems, organizations depend on the external
environment for resources, i n -
cluding raw materials, job applicants, financial resources,
information, and equipment. The
external environment also consists of rules and expectations,
such as laws and cultural
norms, that place demands on how organizations should operate.
Some environmental re-
sources (e.g., raw materials) are transformed into outputs that
are exported to the external
environment, whereas other resources (e.g., job applicants,
equipment) become subsystems
in the transformation process.
EXHIBIT 1.1 Open Systems Perspective of Organizations
External Environment
Subsystem:
Accounting
Teclinological subsystem

subsystem
f Human re
• Financial resources
'Equipment
Engineering ' i£
Transforming inputs to outputs
«̂
Managerial Marketing/Sales
Subsystem subsystem subsystem
r ^ •
7 Production subsystem
Feedback Feedback
Chapter One Introduct/on to the Field of Organizations!
Behavior
Inside the organization are numerous subsystems, such as
departments, teams, informal
groups, work processes, technological configurations, and other
elements. Rather like the
Russian matryoshka dolls nested wi th in each other,
organizational subsystems are also sys-
tems wi th their own subsys t ems .Fo r example, the Nordstrom
department store i n

Spokane, Washington, is a subsystem of the Nordstrom chain,
but the Spokane store is also
a system wi th its own subsystems of departments, teams, and
work processes. A n organiza-
tion's subsystems are interconnected so they interact to
transform inputs into various
outputs. Some outputs (e.g., products, services, communi ty
support) may be valued by
the external environment, whereas other outputs (e.g., employee
layoffs, pollut ion) are
by-products that may have adverse effects on the environment
and the organization's rela-
tionship wi th that environment. Throughout this process,
organizations receive feedback
from the external environment regarding the value of their
outputs and the availability o f
future inputs.
Organisation-tnvironrnenx Fit According to the open systems
perspective, orga-
nizations are effective when they maintain a good "f i t" w i t h
their external environment.^''
Good fit exists when the organization puts resources where they
are most useful, so it can
adapt to and align with the needs o f the external environment.
For instance, Apple, Inc., has
a good fit wi th its many external environments—just look at
the lines for new iPads and the
skyrocketing market share of Apple laptops and iPhones. In
contrast, companies with a
poor fit wi th the environment offer the wrong products and
operate inappropriately in their
environments.
Successful organizations maintain a good fit by anticipating
changes in the environment

and fluidly reconfiguring their subsystems to become more
consistent wi th that environ-
ment. To illustrate, food manufacturers have changed their
ingredients and production
processes to satisfy more health- and environment-conscious
consumers. Companies also
maintain a good fit by actively managing their external
environment. For example, they
might t ry to l imi t competitor access to critical resources (e.g.,
gaining exclusive rights),
change consumer perceptions and needs (e.g., through
marketing), or support legislation
that strengthens their position in the marketplace.
The th i rd fit strategy is to move into different environments i f
the current environment
is too challenging. For instance, Nokia started in 1865 as a pulp
and paper company. The
Finnish company entered the rubber and cable business in the
1920s, moved into electron-
ics in the 1960s, and began producing cell phones a decade
later. These strategic choices
moved the company decisively into new external environments
that seemed more appeal-
ing for Nokia's long-term survival and success.
mternai iUi
open systems
A perspective which holds that
organizations depend on the
external environment for
resources, affect that
environment through their
output, and consist of internal
subsystems that transform

inputs to outputs.
Effectiveness The open systems perspective considers
more than an organization's f i t w i t h the external envi
ronment . I t also defines
effectiveness by how well the company operates internally, that
is, how well it trans-
forms inputs into outputs. The most common indicator o f this
internal transformation
process is organizational efficiency (also called productivity),
which is the ratio of i n -
puts to outcomes.-* Companies that produce more
, goods or services w i th less labor, materials, and energy
are more efficient.
Successful organizations require more than efficient
transformation processes, however. They also need to
have more adaptive and innovative transformation pro-
cesses. '̂' Brasilata illustrates both efficiency and innova-
tion i n the transformation process. As we described in
the opening story to this chapter, a continuous flow o f
einployee suggestions has made the Brazilian steel can
manufacturer highly efficient, which allows it to compete
organizational efficiency
The amount of outputs
relative to inputs in the
organization's transformation
process.

better than less efficient companies. Many of these suggestions
are also innovative, because
they identify new ways to manufacture cans, manage inventory,
and market Brasilata's
products to businesses that buy these products.
One last observation about the open systems perspective is that
coordination is vital i n
the relationship among organizational subsystems, but this
coordination is usually far from
i d e a l . I n f o r m a t i o n gets lost, ideas are not shared,
materials are hoarded, communication
messages are misinterpreted, resources and rewards are
distributed unfairly, and so forth.
These coordination challenges are amplified as organizations
grow, such as when employ-
ees are clustered into several departments and when departments
are clustered into several
organizational divisions. A slight change in work practices in
one subsystem may ripple
through the organization and undermine the effectiveness of
other subsystems. For exam-
ple, a new accounting procedure in the financial subsystem
might unintentionally reduce
the sales staff s motivation to sell products wi th higher profit
margins.
ORGANIZATIONAL LEARNING PERSPECTIVE
The open systems perspective has traditionally focused on
physical resources that enter the
organization and are processed into physical goods (outputs).
This was representative of
the industrial economy but not the "new economy," where the
most valued input is knowl-
edge. The organizational learning perspective (also called
knowledge management) views

knowledge as the main driver o f competitive advantage.
Specifically, organizational learn-
ing is founded on the idea that organizational effectiveness
depends on the organizations
capacity to acquire, share, use, and store valuable knowledge.
m connect
To assist your learning and
test your Itnowledge about
organizational learning, go to
www.mcgrawhillconnect.com,
organizational learning
A perspective which holds that
organizational effectiveness
depends on the organization's
capacity to acquire, share,
use, and store valuable
knowledge.
i n t e l l e c t u a l Capftah The Stock of Organizational
Knowledge The orga-
nizational learning perspective views knowledge as a resource,
and this stock of knowledge
exists in three forms, collectively known as intellectual
capital.^' The most commonly
mentioned form of intellectual capital is human capital—the
knowledge, skills, and abili-
ties that employees carry around in their heads. Human capital
has been described as valu-
able, rare, difficult to imitate, and nonsubstitutable.^" It is
valuable because employees help
the organization discover opportunities and minimize threats in
the external environment.

Human capital is rare and difficult to imitate, meaning that
talented people are difficult to
find, and they cannot be cloned like sheep. Finally, human
capital is nonsubstitutable be-
cause it cannot be easily replaced by technology.
Because of these characteristics, human capital is a competitive
advantage as well as a
huge risk for most organizations. When key people leave, they
take with them some of the
most valuable knowledge that makes the company effective.
"Innovation is the key to suc-
cess in this business, and creativity fuels innovation," explains
Jim Goodnight, CEO of
SAS Institute, Inc., a leading statistical software developer in
Gary, Nor th Carolina. "As such,
95 percent o f my assets drive out the gate every evening. It's
my job to maintain a work
environment that keeps those people coming back every
morning. The creativity they bring
to SAS is a competitive advantage for us.""
Fortunately, some inteUectual capital remains even i f every
employee d id leave the orga-
nization. Structural capital (also called organizational capital)
includes the knowledge
captured and retained i n an organization's systems and
structures, such as the docu-
mentat ion o f work procedures and the physical layout o f the
product ion line.^^
' Structural capital also includes the organization's finished
products, because knowledge
can be extracted by taking them apart to discover how they
work and are constructed

(i.e., reverse engineering).
The th i rd form of intellectual capital is relationship capital,
which is the value de-
rived from an organization's relationships w i t h customers,
suppliers, and others who
provide added mutual value for the organization. It includes the
organization's good-
wi l l , brand image, and combination of relationships that
organizational members have
wi th people outside the organization,"
Behavior 11
EXHIBIT 1.2
Four Organizational Learning
Processes
Individual learning
Environment scanning
Grafting
Experimentation
• Communication
• Training
• Information systems
• Observation
• Human memory
->• •Documentation
•Practices/habits

• Databases
• Knowledge awareness
• Sense making
> Autonomy
• Empowerment
O r q a n i s a t i c m a ! L e a r n i n g P r o c e s s e s
Organizations nurture their intellectual
capital through four organizational learning processes;
knowledge acquisition, sharing, use,
and storage (see Exhibit 1.2).'^
• Knowledge acquisition. This includes extracting information
and ideas from the ex-
ternal environment, as well as through insight. One of the
fastest and most powerful
ways to acquire knowledge is by hir ing individuals or acquiring
entire companies
(called grafting). Knowledge also enters the organization when
employees learn
from external sources. As Connections 1.1 describes, the Duha
Group in Winnipeg,
Canada, acquires knowledge by sending staff on training
programs and by touring
other companies to learn about their best practices. A th i rd
knowledge acquisition
strategy is experimentation. Companies receive knowledge
through insight as a
result of research and other creative processes.
• Knowledge sharing. This aspect of organizational learning
involves distributing
knowledge to others across the organization. Knowledge sharing
is often equated
wi th computer intranets and digital repositories of knowledge.

These systems are
relevant, but knowledge sharing mainly occurs through
structured and informal
communication, as well as various forms of learning (e.g.,
observation, experience,
training, practice). For example, Pixar An ima t ion Studios
deliberately centralized
its cafeteria, mailroom, and restroom facilities so employees
would "bump into" and
coincidentally share knowledge wi th people from other areas of
the organization
rather than just wi th their own team members.
• Knowledge use. The competitive advantage of knowledge
comes from applying it in
ways that add value to the organization and its stakeholders. To
do this, employees
must realize that the knowledge is available and that they have
enough autonomy
to apply it. This requires the type of culture found at Brasilata,
which supports the
intellectual capital
A company's stock of knowledge,
including human capital,
structural capital, and
relationship capital.
human capital
The stock of knowledge, skills,
and abilities among employees
that provide economic value to
the organization.
structural capital
Knowledge embedded in an

organization's systems and
structures.
relationship capital
The value derived from an
organization's relationships with
customers, suppliers, and other
12 Part One /ntroduction
Duha Group's Learning
Oraanszation Strategies'̂
Nestled away in an industrial section of Winnipeg, Canada, is
Duha Group, a role model for the learning organization. The
global manufacturer, marketer, and supplier of paint fandecks
(color cards) and color samples depends on lean manufactur-
ing for its quality and efficiency, and organizational learning
practices enable it to continuously raise these standards.
Duha's 290 Winnipeg employees (the company also has plants
in New York, Mexico, Europe, Asia, and Australia) acquire ex-
ternal knowledge by touring other companies to learn about
their best practices. Knowledge is also brought in through
company-supported formal off-site training (such as health and
safety officer training at a nearby college). In addition, Duha
employees are encouraged to discover new knowledge
through experimentation within their work area and through
Kaizen Blitzes (where teams identify more effective ways to op-
erate entire work areas). "We are encouraged to give our ideas
a try even if they fail," says a Duha employee. "It's rewarding to
apply new concepts that add value or improvement."
Duha Group employees engage in knowledge sharing
through formal in-house training programs, mentoring arrange-
ments, and informal hands-on training sessions. Also, detailed

company operating manuals and other documents are cen-
trally located with access to all staff. A popular form of knowl-
edge sharing is Duha Group's lunch-and-learn sessions, where
employees teach coworkers about lean management, specific
production practices, health and safety, environmental, quality,
and human resources while enjoying a hot, company-supplied
meal. Knowledge sharing also occurs through departmental
Duha Group applies organizational learning through
Kaizen Blitzes, off-site training, lunch-and-learn sessions,
and dally huddles.
huddles, held every day for five minutes. Employees congre-
gate around a huddle board where they post suggestions for
improvement, describe work process changes in their area,
and hear about company news. "The huddles are a great idea,"
says a Duha employee. "I think that's one of our best outlets for
communication."
Finally, Duha Group encourages employees to put knowl-
edge to use by giving them plenty of autonomy and support.
Indeed, every employee has a learning plan they review with
management as well as a learning journal to maintain their fo-
cus on continuous learning. Knowledge use also occurs more
readily because the huddle boards in each department show,
who has specific knowledge they might require.
learning process by encouraging experimentation and open
communications and
recognizing that mistakes are part of that process.
• Knowledge storage. Knowledge storage includes any means by
which knowledge is
held for later retrieval. It is the process that creates
organizational memory. Human
memory plays a critical role here, as do the many forms of

documentation and data-
base systems that exist in organizations. Individual practices
and habits hold less
explicit (more tacit) knowledge.
A b e t _ . - j , 1 ' A n important prerequisite for acquiring,
sharing, and using
new knowledge is the amount and quality o f knowledge already
held wi th in the organiza-
tion. Just as students need to learn knowledge in core courses
before they can understand
content in more advanced courses, companies need to have
employees wi th a sufficient
foundation of expertise to receive and apply new knowledge.
This knowledge prerequisite
is known as the organization's absorptive capacity.^' For
example, many companies were
slow to develop online marketing practices because no one in
the organization had enough
knowledge about the Internet to fathom its potential or apply
that knowledge to the com-
pany's business. In some cases, companies had to acquire entire
teams of people wi th the
requisite knowledge to realize the potential of this marketing
channel.
Organisational fVieiTJOry a n d U n l e a r n i n g Corporate
leaders need to recognize
that they are the keepers of organizational memory.'^ This
unusual metaphor refers to the
Chapter One Introduction to the Field o f Organizational
Behavior

Storage and preservation of intellectual capital. It includes
knowledge that employees pos-
sess, as well as knowledge embedded in the organization's
systems and structures. I t i n -
eludes documents, objects, and anything else that provides
meaningful information about
how the organization should operate.
How do organizations retain intellectual capital? One way is by
keeping knowledgeable
employees. Progressive companies achieve this by adapting
their employment practices to
become more compatible with emerging workforce expectations.
A second organizational
memory strategy is to systematically transfer knowledge to
other employees. This occurs
when newcomers apprentice wi th skilled employees, thereby
acquiring knowledge that is
not documented. A third strategy is to transfer knowledge into
structural capital. This i n -
cludes bringing out hidden knowledge, organizing it , and
putting it i n a form that can be
available to others. Reliance Industries, India's largest business
enterprise, applies this strat-
egy by encouraging employees to document their successes and
failures through a special
intranet knowledge portal. One of these reports provided
information that later prevented
a costly plant shutdown.^'
The organizational learning perspective states not only that
effective organizations learn
but also that they unlearn routines and patterns of behavior that
are no longer appropri-
ate.'"' Unlearning removes knowledge that no longer adds value
and, in fact, may under-

mine the organization's effectiveness. Some forms o f
unlearning involve replacing
dysfunctional pohcies, procedures, and routines. Other forms of
unlearning erase attitudes,
beliefs, and assumptions. For instance, employees rethink the
"best way" to perform a task
and how to serve chents. Organizational unlearning is
particularly important for organiza-
tional change, which we discuss in Chapter 15.
absorptive capacity
The ability to recognize the
value of new information,
assimilate it, and use it for
value-added activities.
HIGH-PERFORMANCE WORK PRACTICES
(HPWP) PERSPECTIVE
The open systems perspective states that successful companies
are good at transforming
inputs into outputs. However, it does not identify the subsystem
characteristics that distin-
guish effective organizations from others. Consequently, an
entire field of research has
blossomed around the objective of discovering the best 'bundle'
of organizational practices
that offers competitive advantage. This research has had various
labels over the years, but it
is now most commonly known as high-performance work
practices (HPWP).'"
Similar to organizational learning, the HPWP perspective is
founded on the behef that
human capital—the knowledge, skills, and abilities that
employees carry around i n their
heads—is an important source of competitive advantage for

organizations.''- The distinctive
feature of the HPWP perspective is that it tries to identify a
specific bundle o f systems and
structures that generate the most value from this human capital.
Researchers have investigated numerous potential high-
performance work practices, but
we wil l focus on four that are recognized in most studies.''^
Two of these are employee involve-
ment and job autonomy. Both activities tend to strengthen
employee motivation as well as
improve decision making, organizational responsiveness, and
commitment to change. I n
high-performance workplaces, employee involvement and job
autonomy often take the form
of self-directed teams (see Chapter 8).
Another key variable in the FIPWP model is employee
competence. Specifically, or-
ganizations are more effective when they recruit and select
people w i th relevant skills,
knowledge, values, and other personal characteristics.
Furthermore, successful companies invest i n employee
development through t ra in ing and development. A
fourth characteristic of high-performance organizations
is that they hnk performance and .skill development to
various forms of financial and nonfmancial rewards
valued by employees. Each of these four work practices—
involvement, autonomy, employee competence, and per-
formance/skill-based rewards—individually improves
high-performance work
practices (HPWP)
A perspective which holds
that effective organizations

incorporate several workplace
practices that leverage the
potential of human capital.
American Express lias tal<en a
page from tlie liigh-performance
worl< practices playbool<. Tlie
financial services company
encourages employees to go
"off script," meaning that they
have the autonomy to customize
their conversations rather than
rely on memorized statements.
Employees also have the
discretion to solve problems
on the spot, such as setting up
a conference call to settle a
dispute with a vendor. "We are
getting more and more power
to make the decisions at our
level," says Teresa Tate, an
American Express customer
service employee in Phoenix."'
organizational performance, but recent
evidence suggests that they have a stron-
ger effect when bundled together."
W h y are HPWP associated with orga-
nizational effectiveness? Early studies
were criticized for ignor ing this ques-
tion,"" but OB experts are now building

and testing more theoretical explana-
tions."' The first reason is that H P W P
b u i l d human capital, which improves
performance as employees develop the
skills and knowledge to perform the work.
A second explanation is that superior
human capital may improve the organiza-
tion's adaptability to rapidly changing
environments. Employees respond better
when they have a wide skill set to handle
diverse tasks as well as the confidence to
handle unfamiliar situations. A third ex-
planation for why H P W P improve orga-
nizat ional effectiveness is that these
activities strengthen employees' motiva-
tion and attitudes toward the employer.
For instance, HPWP represent the com-
pany's investment in and recognition of its workforce, which
motivates employees to recip-
rocate through greater effort in their jobs and assistance to
coworkers.
The H P W P perspective is stil l developing, but it already
reveals important informa-
t ion about specific organizational practices that improve the
input -output transforma-
t ion process, StLll, this perspective has been criticized for
focusing on shareholder and
customer needs at the expense of employee well-being."'* This
concern illustrates that
the HPWP perspective offers an incomplete picture o f
organizational effectiveness. The
remaining gaps are most ly f i l led by the stakeholder
perspective o f organizational
effectiveness.

STAKEHOLDER PERSPECTIVE
The three organizational effectiveness perspectives described so
far mainly pay attention
to processes and resources, yet they only min ima l ly recognize
the importance of rela-
tions wi th stakeholders. Stakeholders include anyone wi th a
stake in the company—
employees, stockholders, suppliers, labor unions, government,
conununities, consumer
and environmental interest groups, and so on (see Exhibit 1.3). I
n other words, organiza-
tions are more effective when they consider the needs and
expectations of any individual
group or other entity that affects, or is affected by, the
organization's objectives and
actions. This approach requires organizational leaders and
employees to understand,
manage, and satisfy the interests o f their stakeholders.'" The
stakeholder perspective
personaUzes the open systems pei-spective; it identifies specific
people and social entities
in the external environment as well as w i t h i n the
organization (the internal environ-
ment). I t also recognizes that stakeholder relations are
dynamic; they can be negotiated
and managed, not just taken as a fixed condition.-^"
Consider the troubles that Walmar t has faced in recent years.' '
For decades, the
world's largest retailer concentrated on customers by p rov id
ing the lowest possible
prices and on stockholders by generating healthy financial
returns. Yet emphasizing
these two stakeholders exposed the company to increasing host i
l i ty from other groups

i n society. Some accused Walinar t o f destroying America's
manufactur ing base and
Chapter One /ntroduction to the Field of Organizational
Behavior 15
EXHIBIT 1.3
Organizational Stakeholders Custonners
Employees i Stockholders
Governments I
Organization
Labor Unions;
Special
Interest
Groups
Communities •
and Charities •'
Joint Venture
Partners
Suppliers
/Vote; Th is exhibit does n o t show the complete set o f
possible stakeholders.
i gnor ing unethical business practices (such as ch i ld labor) i n

countries where i t
purchased goods. Others pointed out that Walmart had a poor
record o f environmental
and social responsibility. These stakeholder pressure points
existed for some t ime, but
W^almart ignored most o f them u n t i l they became serious
threats. In fact, Walmar t
recently created the posi t ion "senior director o f stakeholder
engagement" to ensure
that i t pays more at tention to most stakeholders and to
proactively manage those
relationships.
Understanding, managing, and satisfying the interests of
stakeholders is more challeng-
ing than it sounds because stakeholders have conflicting
interests, and organizations don't
have the resources to satisfy every stakeholder to the fullest.
Therefore, organizational lead-
ers need to decide how much prior i ty to give to each group.
One commonly cited factor is
to favor stakeholders wi th the most power." This makes sense
when one considers that the
most powerful stakeholders present the greatest threat and
opportunity to the company's
survival. Yet stakeholder power should not be the only factor to
consider. Ignoring less
powerful stakeholders might motivate them to form coalitions or
seek government sup-
port, which would give them more power. Ignoring smaller
stakeholders might also irritate
the more powerful stakeholders i f ignoring weaker interests
violates the norms and stan-
dards of society.
stakeholders

Individuals, organizations, or
other entities that affect, or are
affected by, the organization's
objectives and actions.
values
Relatively stable, evaluative
beliefs that guide a person's
preferences for outcomes or
courses of action in a variety
of situations.
Vakies, E'thics, and Corporate Social Respon-
sibisi'iy This brings us to one o f the key strengths o f
the stakeholder perspective, namely, that it incorporates
values, ethics, and corporate social responsibihty into the
organizational effectiveness equation." The stakeholder
perspective states that to manage the interests of diverse
stakeholders, leaders ultimately need to rely on their per-
sonal and organizational values for guidance. Values are
Part One Introduction
relatively stable, evaluative beliefs that guide our preferences
for outcomes or courses of
action in a variety o f situations.'" Values help us know what is
r ight or wrong, or good or
bad, in the world. Chapter 2 explains how values anchor our
thoughts and to some extent
motivate our actions. Al though values exist w i t h i n
individuals, groups o f people often
hold similar values, so we tend to ascribe these shared values to
the team, department,
organization, profession, or entire society. For example,

Chapter 14 discusses the impor-
tance and dynamics of organizational cidture, which includes
shared values across the
company or w i th in subsystems.
Many companies have adopted the values-driven organization
model , whereby
employee decisions and behavior are guided by the company's
espoused values rather
than by expensive and often demoral izing command-and-
control management (i.e.,
t op-down decisions w i t h close supervision o f employees).'^
Tony Hsieh, CEO of the
online retailer Zappos, discovered the importance o f clarifying
the company's values
when someone suggested that managers need these values to
help them make better
h i r i n g decisions. After considerable reflect ion and
involvement f rom staff, Hsieh
e-mailed employees w i th 10 values. I n that e-mail, Hsieh also
wrote: "Ideally, we want
all 10 values to be reflected in everything we do, inc luding how
we interact wi th each
other, how we interact w i t h our customers, and how we
interact w i th our vendors and
business partners."'^'^
By l ink ing values to organizational effectiveness, the
stakeholder perspective also i n -
corporates ethics and corporate social responsibility into the
organizational effective-
ness equation. In fact, the stakeholder perspective emerged out
o f earlier w r i t i n g on
ethics and corporate social responsibility. Ethics refers to the
study o f moral principles
or values that determine whether actions are r ight or wrong and

outcomes are good or
bad. We rely on our ethical values to determine "the right th ing
to do." Ethical behavior
is dr iven by the moral principles we use to make decisions.
These mora l principles
represent fundamental values. I n a recent global survey of M B
A students, almost 80 per-
cent felt that a wel l - run company operates according to its
values and code o f ethics.'^
Chapter 2 provides more detail about ethical principles and
related influences on moral
reasoning.
Corporate social responsibility (CSR) consists of organizational
activities intended
to benefit society and the environment beyond the firm's
immediate financial interests or
legal obligations.'^ It is the view that companies have a contract
w i t h society, i n which
they must serve stakeholders beyond stockholders and
customers. In some situations, the
interests of the firm's stockholders should be secondary to those
o f other stakeholders.
As part of CSR, many companies have adopted the triple bottom
line philosophy; They
t ry to support or "earn positive returns" in the economic,
social, and environmental
spheres of sustainability. Firms that adopt the triple bo t tom
line aim to survive and be
profitable in the marketplace (economic), but they also intend to
maintain or improve
conditions for society (social) as well as the physical
environment.*" Companies are par-
t icularly eager to become "greener," that is, to min imize their
negative effects on the
physical environment. This activity ranges f rom reducing and

recycling waste i n the pro-
duction process to using goats to mow the lawn (which is one of
the many environmental
initiatives at Google).
N o t everyone agrees that organizations need to cater to a wide
variety of stake-
holders. More than 30 years ago, the economist M i l t o n
Friedman pronounced, "There
is one and only one social responsibili ty o f business—to use
its resources and engage
i n activities designed to increase its profits."*' A l though few
writers take this extreme
view today, some point out that companies cannot benefit
stakeholders unless stock-
holders receive first pr ior i ty . But even this posi t ion is
unpopular w i t h most employees
and other stakeholders. "Our company's posi t ion on corporate
social responsibil i ty
and the envi ronment is a s ignif icant part o f what job
candidates f i n d attractive
about H B C , " acknowledges a senior executive at Hudson's
Bay Co., the Canadian
department store chain and oldest commercial business in N o r
t h America.*^ In short.
Chapter One /ntroduction to t l ie Field o f Organizational
Behavior 17
MTN Group is the largest mobile (cell phone)
telecommunications company in Africa and a leader in corporate
social responsibility
(CSR). Through its award-winning "21 Days of Y'ello Care"
program, most of the company's 30,000 employees volunteer for

specific
CSR events held over three weeks each year This photo shows
MTN employees in Uganda participating in a recent Y'ello Care
initiative—planting at least 1,000 trees in each of the 21
African and Middle Eastern countries where MTN does
business. Y'ello
Care themes in previous years included fighting against malaria,
reducing traffic accidents, cleaning up the community, and
supporting orphanages.*^
ethics
The study of moral principles
or values that determine
whether actions are right or
wrong and outcomes are good
or bad.
leaders may put their organization at r isk i f they ignore their
broader corporate social
responsibility.
Capgemini executives knew that CSR was important, but it
really struck home when
the Netherlands-based information technology (IT) consulting f
i rm tried to f i l l 800 I T and
management consulting positions. Rather than offering a t-shirt
for completing the
30-minute online survey on recruitment issues, Capgemini
advised respondents ( IT and
management consultants) that for each completed survey it
would provide funding for a
street k id in Kolkata, India, to have one week of schooling and
accommodation. The sur-
vey included an option for respondents to f ind out more about
employment w i th the con-

sulting f i r m . Far beyond its expectations, Capgemini
received 10,000 completed surveys and 2,000 job inqu i -
ries from qualified respondents. The company fil led its
800 jobs and developed a wai t ing list o f future pros-
pects. Furthermore, media attention about this initiative
raised Capgemini's brand reputation for corporate social
responsibility. The consul t ing f i r m also supported
10,400 weeks o f housing and education for children in
Kolkata ."
corporate social
responsibility (CSR)
Organizational activities
intended to benefit society and
the environment beyond the
firm's immediate financial
interests or legal obligations.
Chapter One /ntroduction to the Field of Organizational
Behavior 23
personal activities. When a major blizzard shut federal
government offices in Washington,
DC, 30 percent of employees teleworked, saving the government
$30 mi l l ion per day.'"
Against these potential benefits, work-at-home employees face a
number of real or
potential challeirges. Family relations may suffer rather than
improve i f employees lack
sufficient space and resources for a home office. Some
employees complain o f social isola-
tion and reduced promotion opportunities when they work away
from the office most of

the time. Telework is clearly better suited to people who are
self-motivated and organized,
can work effectively wi th broadband and other technology, and
have sufficient fulfillment
o f social needs elsewhere in their life. "They tend to be the k
ind of people who would stay
late and do the job at the office, people who know what they're
responsible for and want to
get it done," says Michelle van Schouwen, president of van
Schouwen Associates, an adver-
tising and marketing f i rm in Longmeadow, Mass." Vir tual
work arrangements are also
more successful in organizations that evaluate employees by
their performance outcomes
rather than face time. '-
Anchors of Organizational Betiavior Knowledge
Globalization, increasing workforce diversity, and emerging
employment relationships
are just a few of the trends that challenge organizations and
make the field of organiza-
tional behavior more relevant than ever before. To understand
these and other topics, the
field of organizational behavior relies on a set of basic beliefs
or knowledge structures
(see Exhibit 1.5). These conceptual anchors represent the
principles on which OB knowl -
edge is developed and refined. ' '
THE SYSTEMATIC RESEARCH ANCHOR
A key feature o f OB knowledge is that i t should be based on
systematic research, which
typically involves forming research questions, systematically
collecting data, and testing
hypotheses against those data.'" Appendix A at the end of this
book provides a brief over-

view of these research methods. Systematic research
investigation produces evidence-
based management, which involves making decisions and taking
actions based on this
research evidence. It makes perfect sense, doesn't i t , that
management practice should be
founded on the best available systematic knowledge? Yet many
of us who study organiza-
tions using systematic methods are amazed at how often
corporate leaders embrace fads,
consulting models, and their own pet behefs wi thout bothering
to f ind out i f they actu-
ally work! ' '
There are many reasons people have difficulty applying
evidence-based management.
Leaders and other decision makers are bombarded wi th so many
ideas from newspapers.
EXHIBIT 1.5 Systetnatic research
Anchors of Organizational
Behavior Knowledge
OB should study organizations using
'] systematic research methods
^jTiiVij?; OB should import knowledge from other
j disciplines, not just create its own knowledge
OB theory should recognize that the effects
of actions often vary with the situation
Multiple levels of
analysis anchor

OB events should be understood from three levels
of analysis: individual, team, and organization
Debatir
IS THERE EWOUGH EVIDEN-.-; . v '
One of the core anchors of organizational behavior is that
knowl-
edge must be built on a solid foundation of scientifically based
research. This evidence-based management (EBM) approach
particularly embraces scientific methods—relevant measures,
appropriate sampling, systematic experimental design, and the
like—because they produce more valid theories to guide man-
agement decisions. Scholars also advise that managers need to
become more aware of these well-studied cause-and-effect prin-
ciples, be sensitive to the conditions when applying these EBM
principles, and use diagnostic tools (e.g., surveys, checklists) to
guide their application to the workplace. Invariably, supporters
of the evidence-based management movement contrast this
systematic approach with reliance on management fads, hyped
consulting, and untested personal mental models.
It seems obvious that we should rely on good evidence rather

than bad evidence (or no evidence at all) to make sound deci-
sions in the workplace. Yet, there is another side to this
debate.'^
The question isn't whether good evidence is valuable; it is about
the meaning of "good evidence." One concern is that scholars
might be advocating an interpretation of good evidence that is
far
too narrow. They typically limit evidence to empirical research
and consider qualitative information "anecdotal." Albert
Einstein
tried to avoid this questionable view by keeping the following
message framed on his wall: "Not everything that can be
counted
counts, and not everything that counts can be counted."
• t;/'L^" LZ-BASED iViANAGEMENT?
Another concern is that managers seldom view organiza-
tional research as sufficiently relevant to the issues they face.'^
This bias partly occurs because scholarly journal reviewers usu-
ally accept only studies with uncontaminated, quantifiable mea-
sures in environments that control for other factors. But
managers do not operate in these pristine conditions. Their
world
is much more complex, with vague estimates of key variables.
One indicator of this research-practice gap is that managers
typically require knowledge of specific interventions, yet only
about 2 percent of organizational studies conduct real-world

interventions.^* Most published studies analyze data from self-
reported questionnaires.
A third critique of the EBM movement is that the systematic
elements of organizational research studies (e.g., sample size,
measurement reliability, advanced data analysis methods) some-
times mask other potentially serious faults. Cross-cultural stud-
ies, for instance, often use college student samples to represent
an entire culture. Lab studies with students assume they repli-
cate workplace conditions without recognizing that the sample
(students versus employees), setting (lab versus workplace), and
activity studied are considerably different. Indeed, some meta-
analyses report substantially different results from studies using
students versus employees. Finally, even if the published
research is valid, it is usually biased because research with
nonsignificant results is much less likely to be published.
books, consultant reports, and other sources that it is a
challenge to figure out which ones
are based on good evidence. Another problem is that good OB
research is necessarily
generic; it is rarely described in the context of a specific
problem in a specific organization.
Managers therefore have the difficult task of figuring out which
theories are relevant to
their unique situation.
A th i rd reason organizational leaders accept fads and other
knowledge that lacks suf-
ficient evidence is that consultants and popular book writers are
rewarded for marketing

their concepts and theories, not for testing to see i f they
actually work. Indeed, some man-
agement concepts have become popular—they are even found in
some OB textbooks!—
because of heavy marketing, not because of any evidence that
they are valid. Finally, as we
w i l l learn in Chapter 3, people form perceptions and beUefs
quickly and tend to ignore
evidence that their beliefs are inaccurate. To counter these
opposing forces, OB experts
have proposed a few simple suggestions to create a more
evidence-based organization
(see Exhibit 1.6).
THE iViULTiDiSCiPLINARY ANCHOR
Organizational behavior is anchored around the idea that the
field should welcome theories
and knowledge in other disciplines, not just from its own
isolated research base. For i n -
stance, psychological research has aided our understanding of
individual and interpersonal
behavior. Sociologists have contributed to our knowledge of
team dynamics, organizational
Behavior 25
EXHIBIT 1
Creating an Evidence-Based
IVIanagement Organization
1. Stop treating old ideas as if they were brand new.
2. Be suspicious of "breakthrough" ideas and studies.
3. Celebrate and develop collective brilliance.

4. Emphasize drawbacks as well as virtues.
5. Use success (and failure) stories to illustrate sound practices,
but not in place of a valid
research method.
6. Adopt a neutral stance toward ideologies and theories.
Source: J. Pfeffer and R. I. Sutton, "Evidence-Based
Management," Harvard Business Review 84, no. 1 (2006),
pp. 62-74.
socialization, organizational power, and other aspects of the
social system. OB knowledge
has also benefited from knowledge in emerging fields such as
communications, marketing,
and information systems. Borrowing from other disciplines is
inevitable. Organizations
have central roles in society, so they are the subject of many
social sciences. Furthermore,
organizations consist of people who interact wi th one another,
so there is an inherent inter-
section between OB and most disciplines that study human
beings.
Borrowing theories from other disciplines has helped the field
of OB nurture a diversity
of knowledge and perspectives about organizations, but there
are a few concerns." One
issue is whether OB suffers from a "trade deficit"—importing
far more knowledge from
other disciplines than i t exports to other disciplines. By relying
on theories developed in
other fields, OB knowledge necessarily lags rather than leads in
knowledge production. In
contrast, OB-bred theories allow researchers to concentrate on
the quality and usefulness of

the theory.
Heavy reliance on theories borrowed from other disciplines may
also leave OB
vulnerable to a lack of common identity. The field could
potentially become a place for
researchers who are raised in and mainly identify w i th the
other disciplines (psychology,
sociology, and so on) rather than wi th organizational behavior.
The lack of identification as
an "OB scholar" might further challenge the fields ability to
develop its own theory and
weaken its focus on practical relevance.
THE CONTINGENCY Af^CHOR
People and their work environments are complex, and the field
o f organizational behavior
recognizes this by stating that a particular action may have
different consequences in differ-
ent situations. In other words, no single solution is best all of
the time.'"" O f course, it
would be so much simpler i f we could rely on "one best way"
theories, i n which a particular
concept or practice has the same results i n every situation. OB
experts do search for simpler
theories, but they also remain skeptical about surefire
recommendations; an exception is
usually somewhere around the corner. Thus, when faced wi th a
particular problem or
opportunity, we need to understand and diagnose the situation
and select the strategy most
appropriate under those conditions}"^
THE MULTIPLE LEVELS OF ANALYSIS ANCHOR
This textbook divides organizational behavior topics into three
levels o f analysis: indiv id-

ual, team (including interpersonal), and organization. The
individual level includes the
characteristics and behaviors of employees as well as the
thought processes that are attrib-
uted to them, such as motivation, perceptions, personalities,
attitudes, and values. The team
level of analysis looks at the way people interact. This includes
team dynamics, team deci-
sions, communication, uifluence, social networks, conflict, and
leadership. At the organiza-
tional level, we focus on how people structure their work ing
relationships and on how
organizations interact wi th their environments.
Al though an OB topic is typically pegged into one level o f
analysis, it usually relates
to mul t ip le levels.'"'^ For instance, communica t ion is
located in this book as a team
26 Part One introduction
(interpersonal) process, but we also recognize that it includes
individual and organiza-
tional processes. Therefore, you should t ry to th ink about each
OB topic at the individual,
team, and organizational levels, not just at one of these levels.
The Journey Begins
This chapter gives you some background about the field of
organizational behavior. But it's
only the beginning of our journey Throughout this book, we w i
l l challenge you to learn
new ways of thinking about how people work in and around
organizations. We begin this

process in Chapter 2 by presenting a basic model of individual
behavior; then we introduce
over the next few chapters various stable and mercurial
characteristics o f individuals that
relate to elements of the individual behavior model. Next, this
book moves to the team
level of analysis. We examine a model of team effectiveness
and specific features of high-
performance teams. We also look at team decision making
communication, power and
influence, conflict, and leadership. Finally, we shift our focus
to the organizational level of
analysis, where the topics of organizational structure,
organizational culture, and organiza-
tional change are examined in detail.
cnapter surnmary )
L O l Define organizational behavior and organizations,
and discuss the importance of this field of inquiry.
Organizational behavior is the study of what people think,
feel, and do in and around organizations. Organizations are
groups of people who work interdependently toward some
purpose. OB theories help people (a) make sense of the work-
place, (b) question and rebuild their personal mental models,
and (c) get things done in organizations. OB knowledge is for
everyone, not just managers. OB knowledge is just as impor-
tant for the organization's financial health.
L 0 2 Compare and contrast the four current perspectives
of organizational effectiveness as well as the early goal
attainment perspective.
The goal attainment perspective, which states that organiza-
tions are effective i f they achieve their stated objectives, is

no longer accepted because (a) the goals set may be too easy,
(b) goals may be too abstract to determine their accomplish-
ment, and (c) achievement of some goals may threaten the
company's survival.
The open systems perspective views organizations as
complex organisms that "live" wi th in an external environ-
ment. They depend on the external environment for re-
sources and then use organizational subsystems to transform
those resources into outputs, which are returned to the envi-
ronment. Organizations receive feedback from the external
environment to maintain a good " f i t " with that environ-
ment. Fit occurs by adapting to the environment, managing
the environment, or moving to another environment.
According to the organizational learning perspective, or-
ganizational effectiveness depends on the organization's
capacity to acquire, share, use, and store valuable knowledge.
The ability to acquire and use knowledge depends on the
firm's absorptive capacity. Intellectual capital consists of
human capital, structural capital, and relationship capital.
Knowledge is retained in the organizational memory; compa-
nies also selectively unlearn.
The high-performance work practices (HPWP) perspective
identifies a bundle of systems and structures to leverage
workforce potential. The most widely identified HPWP are
employee involvement, job autonomy, developing employee
competencies, and performance-skill-based rewards. HPWP
improve organizational effectiveness by building human
capital, increasing adaptability, and strengthening employee
motivation and attitudes.
The stakeholder perspective states that leaders manage
the interests of diverse stakeholders by relying on their per-

sonal and organizational values for guidance. Ethics and
corporate social responsibiht)' (CSR) are natural extensions
of values-based organizations because they rely on values to
guide the most appropriate decisions involving stakeholders.
CSR consists of organizational activities intended to benefit
society and the environment beyond the firm's immediate
financial interests or legal obligations.
L 0 3 Debate the organizational opportunities and challenges
of globalization, workforce diversity, and emerging
employment relationships.
Globalization, which refers to various forms of connectivity
with people in other parts of the world, has several economic
and social benefits, but it may also be responsible for work in-
tensification and reduced job security and work-life balance.
Workforce diversity is apparent at both the surface level (obser-
vable demographic and other overt differences in people) and
34 Part Two Individual Behavior and Processes
OhioHealth has weathered the economic recession and thrived
when economic growth left
other health care providers short-staffed. It has done so by
being an employer of choice for
job applicants, min imiz ing absenteeism and turnover,
encouraging extra-role behavior, and
supporting high performance. This chapter examines these
forms of individual behavior as
well as the factors that influence those behaviors.
The chapter begins wi th the MARS model, which outUnes the
four direct drivers of i n -
dividual behavior and results. It then reviews the five types of

individual behavior that rep-
resent the individual-level dependent variables found in most
organizational behavior
research. The second half of this chapter looks closely at two of
the most stable characteris-
tics o f individuals: personality and values. The section on
personality specifically looks at
personality development, personality traits, and how personality
relates to behavior in or-
ganizational settings. The final section of this chapter turns our
attention to values, includ-
ing the various types o f personal values, how values relate to
individual behavior, the
dynamics of values congruence, ethical values and practices,
and cross-cultural values.
MARS Model of Individual Behavior and Performance
For most of the past century, experts have investigated the
direct predictors of individual
behavior and performance.- One o f the earliest formulas was
performance = person X
situation, where person includes individual characteristics, and
situation represents exter-
nal influences on the individual's behavior. Another frequently
mentioned formula is
performance = ability X motivation.-' Sometimes known as the
"skill-and-will" model, this
formula elaborates two specific characteristics wi th in the
person that influence ind iv id -
ual performance. Abil i ty, motivation, and situation are by far
the most commonly men-
t ioned direct predictors o f ind iv idua l behavior and
performance, but i n the 1960s
researchers identified a fourth key factor: role perceptions (the
individual's expected role
obligations)."

Exhibit 2.1 illustrates these four variables—motivation, ability,
role perceptions, and
situational factors—which are represented by the acronym
MARS.^ A l l four factors are
critical influences on an individual's voluntary behavior and
performance; i f any one o f
them is low in a given situation, the employee would perform
the task poorly. For example.
EXHIBIT 2.1 MARS Model of Individual Behavior and Results
Individual
characteristics MARS model
Personality
Values
Self-concept
Perceptions
Emotions and
attitudes
I P
• Task performance
• Organizational
citizenship
• Counterproductive
work befiaviors
• Joining/staying with

the organization
• Maintaining
attendance
Stress
Chapter Two Individual Behavior, Personality, and Values 35
motivated salespeople wi th clear role perceptions and sufficient
resources (situational
factors) wi l l not perform their jobs as well i f they lack sales
skills and related knowledge
(abili ty). Motivat ion, ability, and role perceptions are
clustered together in the model
because they are located wi th in the person. Situational factors
are external to the individual
but still affect his or her behavior and performance.*" Lets look
at each of these four factors
in more detail.
5 D » -fr-' IE MOTIVATION
isoDmect
your knowledge about the MARS
model and its four elements, go to
vwvw.mcgrawhiMconnect.com,
Motivation represents the forces wi th in a person that affect his
or her direction, intensity,
and persistence of voluntary behavior.^ Direction refers to the

path along which people en-
gage their effort. People have choices about where they put
their effort; they have a sense of
what they are trying to achieve and at what level of quality,
quantity, and so forth. In other
words, motivation is goal-directed, not random. People are
motivated to arrive at work on
time, finish a project a few hours early, or aim for many other
targets. The second element
of motivation, called intensity, is the amount of effort allocated
to the goal. Intensity is all
about how much people push themselves to complete a task. For
example, two employees
might be motivated to finish their project a few hours early
(direction), but only one of
them puts forth enough effort (intensity) to achieve this goal.
Finally, motivation involves varying levels of persistence, that
is, continuing the effort for
a certain amount of time. Employees sustain their effort unt i l
they reach their goal or give
up beforehand. To help remember these three elements of
motivation, consider the meta-
phor of dr iving a car in which the thrust of the engine is your
effort. Direction refers to
where you steer the car, intensity is how much you put your foot
down on the gas pedal,
and persistence is for how long you drive toward that
destination. Remember that motiva-
t ion is a force that exists w i th in individuals; it is not their
actual behavior. Thus, direction,
intensity, and persistence are cognitive (thoughts) and
emotional conditions that directly
cause us to move.
motivation

The forces within a person that
affect his or her direction,
intensity, and persistence of
voluntary behavior
ABILITY
Employee abilities also make a difference in behavior and task
performance. Ability
includes both the natural aptitudes and the learned capabilities
required to successfully
complete a task. Aptitudes are the natural talents that help
employees learn specific tasks
more quickly and perform them better. There are many physical
and mental aptitudes, and
our ability to acquire skills is affected by these aptitudes. For
example, finger dexterity is an
aptitude by which individuals learn more quickly and
potentially achieve higher perfor-
mance at picking up and handling small objects vrith their
fingers. Employees wi th high
finger dexterity are not necessarily better than others at first;
rather, their learning tends to
be faster and performance potential tends to be higher. Learned
capabilities are the skills
and knowledge that you currently possess. These capabilities
include the physical and
mental skills and knowledge you have acquired. Learned
capabihties tend to wane over
time when not in use.
Aptitudes and learned capabilities are closely related to
competencies, which has become
a frequently used term in business. Competencies are
characteristics o f a person that result
in superior performance.' These characteristics include
knowledge, skills, aptitudes, and

behaviors. Some experts extend the meaning of competencies to
include personality and
values, whi le others sug-
> gest that competencies are
; action-oriented results o f
these characteristics, such
as serving customers, cop-
.' ing wi th heavy workloads,
and p r o v i d i n g creative
ideas. Some studies have
ability
The natural aptitudes and
learned capabilities required to
successfully complete a task.
competencies
Skills, knowledge, aptitudes,
and other personal
characteristics that lead to
superior performance.
attempted to identify a list of core competencies for
performance in all jobs. For example,
one stream of research has identified competencies that are most
important in all jobs, such
as leading/deciding, supporting/cooperating,
creating/conceptualizing, adapting/coping,
and four others.'

The challenge is to match a person's competencies wi th the
job's competency require-
ments. A good person-job match produces higher performance;
it also tends to increase the
employee's well-being. One way to match a person's
competencies with the job's task require-
ments is to select applicants who already demonstrate the
required competencies. For ex-
ample, companies ask applicants to perform sample work,
provide references to check their
past performance, and complete various selection tests. A
second strategy is to provide train-
ing, which has a strong mfluence on individual performance and
organizational effective-
ness."* The third person-job matching strategy is to redesign
the job so that employees are
given only tasks that reflect their ctirrent learned capabilities.
For example, a complex task
might be simplified—with some aspects of the work transferred
to others—so that a new
employee performs only those tasks that he or she is currently
able to perform. As the
employee becomes more competent at these tasks, other tasks
are added back into the job.
ROLE PERCEPTIONS
Motivat ion and ability are important influences on individual
behavior and performance,
but employees also require accurate role perceptions to perform
their jobs well. Role per-
ceptions refer to how clearly people understand the job duties
(roles) assigned to them or
expected of them. For instance, OhioHealth employees perform
their jobs well partly
because "they know exactly what they're supposed to do." These

perceptions are critical
because they guide the employee's direction of effort and
improve coordination wi th co-
workers, suppliers, and other stakeholders. Employees w i th
clearer role perceptions also
tend to have higher motivation.
Unfortunately, many employees do not have clear role
perceptions. One survey reported
that although 76 percent of employees understand the
organization's business goals, only 39
percent said they understood how to achieve those goals in their
own job. Similarly, when a
recent global survey asked what would nrost improve their
performance, employees in
most countries identified "greater clarity about what the
organization needs from me" as
the first or second most important factor.'^
Back Friday—the day after
Thanlcsgiving—is the busiest
shopping day of the year, so
Best Buy holds special
rehearsals to ensure that every
employee has crystal-clear role
perceptions. This photo shows
customer assistance supervisor
Aaron Sanford orchestrating a
Black Friday practice run at a
Best Buy store in Denver These
events help employees to
understand their specific duties
and responsibilities, the priority
of those tasks, and the correct
way to complete them."

Role clarity exists in three forms. First, employees have clear
role perceptions when they
understand the specific tasks assigned to them, that is, when
they know the specific duties
or consequences for which they are accountable. This may seem
obvious, but employees are
occasionally evaluated on job duties they were never told were
wi th in their zone of respon-
sibihty. For example, the Metro transit system in Washington,
DC, experienced a serious
train derailment a few years ago because the track department
did not lubricate the tracks.
A n investigation revealed that the department had lubricated
tracks several years earher,
but this work activity stopped after the previous department
managers had transferred or
retired. The incoming managers did not know about the
department's track lubrication
duties, so they didn't inform employees that lubricating tracks
was part of their job . ' '
The second form of role clarity refers to how well employees
understand the priority of
their various tasks and performance expectadons. This is
illustrated in the classic dilemma
of pr ior i t iz ing quantity versus quality, such as how many
customers to serve in an hour
(quantity) versus how well the employee should serve each
customer (quality). I t also refers
to properly allocating time and resources to various tasks, such
as how much time a
manager should spend coaching employees each week versus

spending time wi th supphers
and clients. The th i rd form of role clarity involves
understanding the preferred behaviors or
procedures for accompMshing the assigned tasks. This refers to
situations in which employees
have the knowledge and skills to perform a particular task in
more than one way. Employees
with clear role perceptions know which of these methods is
preferred or required by the
organization.
SITUATIONAL FACTORS
Employees' behavior and performance also depend on the
situation.'" The situation mainly
refers to conditions beyond the employee's immediate control
that constrain or facilitate
behavior and performance.'^ For example, employees who are
motivated, are skilled, and
know their role obligations wi l l nevertheless perform poorly i
f they lack time, budget, phys-
ical work facilities, and other situational conditions. Some
situational constraints—such as
consumer preferences and economic conditions—originate from
the external environment
and, consequently, are beyond the employee's and organization's
control.
Along wi th situational constraints, situational factors also refer
to the clarity and con-
sistency o f cues provided by the environment to employees
regarding their role
obligations and opportunities.'"^ The importance of situational
clarity and consistency is
illustrated in workplace accidents. Let's say that you are
motivated, are able, and have a
clear role obligation to act safely in your job. Even so, you are

more likely to have an ac-
cident i f the work setting does not clearly and consistently
communicate a nearby electri-
cal hazard or other safety risk. Your unsafe behavior and
accident l ikel ihood are affected
by the situation, namely, the lack o f signs and other indicators
of the safety risk or incon-
sistent placement o f these warnings across the workplace.
Types of Individual Behavior
role perceptions
The extent to which a person
accurately understands the job
duties (roles) assigned to or
expected of him or her.
The four elements of the MARS model—motivation, ability,
role perceptions, and situa-
tional factors—affect aU voluntary workplace behaviors and
their performance outcomes.
There are many varieties of individual behavior, but most can
be organized into the five
categories described over the next few pages: task performance,
organizational citizen-
i , counterproductive work behaviors, jo ining and staying wi th
the organization, and
maintaining work attendance (Exhibit 2.2).
; TASK PERFORMANCE
Task performance refers to goal-directed behaviors under the
individual's control that
' support organizational objectives.'' Task performance

behaviors transform raw materials
EXHIBIT 2.2
Five Types of Individual
Behavior in the Workplace
Task
performance
Types of
individual
behavior
^ 4 . 0 J '
into goods and services or support and maintain these technical
activities. For example,
foreign exchange traders at BGC Partners, Inc., make decisions
and perform various tasks
to buy and sell currencies. Most jobs consist of several tasks.
For instance, foreign exchange
traders at BGC must be able to quickly identify profitable
trades, analyze economic data,
keep track of and complete account information, assist in
training new staff, and use spe-
cialized computer software and equipment without error. More
generally, tasks might i n -
volve working wi th data, people, or things; working alone or wi
th other people; and degrees
of influencing others.'^
Few companies would survive i f employees performed only

their formal job duties. They
also need to engage in organizational citizenship behaviors
(OCBs)—various forms of
cooperation and helpfulness to others that support the
organization's social and psychologi-
cal context." In other words, companies excel when employees
go the "extra mile" beyond
the required job duties. Organizational citizenship behaviors
take many forms. Some are
directed toward individuals, such as assisting coworkers wi th
their work problems, adjust-
ing work schedules to accommodate coworkers, showing
genuine courtesy toward cowork-
ers, and sharing work resources (supplies, technology, staff) wi
th coworkers. Other OCBs
represent cooperation and helpfulness toward the organization,
such as supporting the
company's public image, taking discretionary action to help the
organization avoid
potential problems, offering ideas beyond those required for the
job, attending voluntary
functions that support the organization, and keeping up wi th
new developments in the
organization.-"
COUNTERPRODUCTIVE WORK BEHAVIORS
Organizational behavior is interested in all workplace
behaviors, including dysfunctional
activities collectively known as counterproductive work
behaviors (CWBs). These volun-
tary behaviors have the potential to directly or indirectly harm
die organization.-^ Some of
the many types of CWBs include harassing coworkers, creating
unnecessary conflict, devi-
ating from preferred work methods (e.g., shortcuts that risk
work quality), being untruthful.

An important shipment of
materials had arrived at customs
for Procter & Gamble (P&G)
India, but the government shut
down all its offices (including
customs) due to heavy rains.
Undeterred by the weather, a
P&G plant engineer arranged to
transport a customs official from
his home to the customs office
and back so the clearance
paperwork could be completed.
The engineer then arranged for
the materials to be delivered to
the plant the same day. The
P&G India engineer engaged
in organizational citizenship
behaviors (and encouraged
similar behaviors by the
customs officer), which kept
the production lines running.̂ '
stealing, sabotaging work, avoiding work obligations
(tardiness), and wasting resources.
A n d CWBs are not minor concerns; research suggests that they
can substantially under-
mine the organization's effectiveness.
organizational citizenship
behaviors (OCBs)
Various forms of cooperation

and helpfulness to others that
support the organization's
social and psychological
context.
JOINING AND STAYING WITH THE ORGANIZATION
Task performance, organizational citizenship, and the lack of
coimterproductive work be-
haviors are obviously important, but i f qualified people don't jo
in and stay with the organi-
zation, none of these performance-related behaviors would
occur. Consider the shortage of
nurses. Although the recent recession temporarily eased matters,
the long-term trend is for
the number of nursing positions to far outstrip the number of
nurses available. There are
already many exainples in the United States and other countries
where beds had to be
closed or hospital services deteriorated because o f a lack o f
nursing staff-' OhioHealth has
proactively reduced this risk. As the opening vignette to this
chapter described, the health
care provider has become an employer of choice by achieving
the nursing association's
"Magnet" designation and being rated as one of the best places
to work in America.
Even when companies are able to hire qualified staff in the face
of shortages, they need
to ensure that these employees stay wi th the company
Companies w i th high turnover suf-
fer because of the high cost of replacing people who leave.
More important, as was men-
tioned i n the previous chapter, much o f an organization's
intellectual capital is the
knowledge carried around i n employees' heads. When people

leave, soine o f this vi ta l
knowledge is lost, often resulting in lower productivity, poorer
customer service, and so
for th . Some employers attract job applicants and minimize
turnover by nur tu r ing an
enjoyable work environment. For example, the opening
vignette described how OhioHealth celebrates employees
wi th long service and provides a high-involvement envi-
ronment where staff are regularly consulted about orga-
nizational issues.
counterproductive work
behaviors (CWBs)
Voluntary behaviors that
have the potential to directly
or indirectly harm the
organization. yAf is imiMiNG WORK ATTEUDAHCE
Along wi th attracting and retaining employees, organiza-
tions need everyone to show up for work at scheduled
times. American employees miss an average of five days of
scheduled work each year,
which is lower than in most other countries. For example, one
study reported that more
than 25 percent of primary and secondary school teachers in
India, Uganda, and Indonesia
are absent from work on any given work day. The report warned
that this chronic level of
absenteeism undermined the quality of children's education to
such an extent that it threatened

the economic development of those countries.-"*
Most employees blame the situation for their absenteeism, such
as bad weather, a transit
strike, or family demands (e.g., children or parents require
care). However, some people
show up for work under these conditions because of their strong
motivation to attend work,
whereas others take sick leave even when they are not genuinely
unwell. Employees who
experience job dissatisfaction or work-related stress are more
likely to be absent or late for
work because taking time off is a way of temporarily
withdrawing from stressful or dissat-
isfying conditions. Absenteeism is also higher in organizations
wi th generous sick leave
because this benefit minimizes the financial loss of taking time
away from work. Another
factor in absenteeism is the person's values and personality.^-'^
Finally studies report that
absenteeism is higher i n teams wi th strong absence norms,
meaning that team members
tolerate and even expect coworkers to take time of f
r ' Z' Along with attending work when expected, maintaining
work atten-
dance requires staying away from scheduled work when
attendance would be dysfunctional
for the individual and organization. In fact, OB experts warn
that presenteeism—attending
work when one's capacity to work is significantly diminished by
illness, fatigue, personal
problems, or other factors—may be more serious than being
absent when capable of work-
ing.^'' Employees who attend work when they are unwell or
unfit may worsen their own

condition and increase the health risks for coworkers. These
employees are also usually Jess
productive and may reduce the productivity of coworkers.
Presenteeism is more common among employees wi th low job
security (such as new and
temporary staff), who lack sick leave pay or similar financial
buffers, and whose absence
would immediately affect many people (i.e., high centrality).
Company or team norms
about absenteeism also account for presenteeism. Personahty
also plays a role; some people
possess traits that motivate them to show up for work when
others would gladly recover at
home. Personality is a widely cited predictor of most forms of
individual behavior. I t is also
the most stable personal characteristic, so we introduce this
topic next.
Personality in Organizations
; ' " r-r7?^J;;vj Whi le applying for several jobs in the
publishing industry, Christina was surprised that
vwia...:^^!.^.,.,.^.' three of the positions required applicants to
complete a personality test. "One page is a list
of characteristics—sentimental, adventurous, attractive,
compelhng, helpful, etc.—and you
check off the ones that best describe what others expect of you,"
Christina recalls of one
personality test. "The second page is the same list, but you
check off the ones that you think
truly describe you." Christina didn't hear back from the first
company after completing its
personality test, so for the second company she completed the
personality test "according to
a sales personality," because that job was in sales. When wri t

ing the personahty test at the
th i rd f i rm, she answered questions the way she thought
someone would who was "a good
person, but honest" about what he or she thought. None of the
applications resulted in a
job offer, leaving Christina wondering what personahty profile
these companies were seek-
ing and whether her strategy of guessing the best answer on
these personahty tests was a
good idea.^*
Personality is an important individual characteristic, which
explains why several compa-
nies try to estimate the personality traits o f job applicants and
employees. Most of us also
think about personality every day in our dealings wi th others.
We use these traits (talkative,
risk-oriented, thoughtful, etc.) to simplify our perception o f
each person and to predict
their future behavior. Personality is the relatively enduring
pattern of thoughts, emotions.
and behaviors that characterize a person, along wi th the
psychological processes behind
those characteristics.-' It is, in essence, the bundle of
characteristics that inake us similar to
or different from other people. We estimate an individual's
personality by what he or she
says and does, and we infer the person's mternal states—
including thoughts and emotions—
from these observable behaviors.

A basic premise o f personality theory is that people have
inherent characteristics or
traits that can be identified by the consistency or stability of
their behavior across time and
situations.'" For example, you probably have some friends who
are more talkative than oth-
ers. You might know some people who like to take risks and
others who are risk averse. This
behavioral tendency is a key feature of personality theory,
because it attributes a person's
behavior to something wi th in that person—the individual's
personality—rather than to
purely environmental influences.
O f course, people do not act the same way in all situations; in
fact, such consistency
would be considered abnormal because it indicates a person's
insensitivity to social norms,
reward systems, and other external condit ions." People vary
their behavior to suit the
situation, even i f the behavior is at odds wi th their personahty.
For example, talkative
people remain relatively quiet in a library where "no talking"
rules are explicit and strictly
enforced. However, personahty differences are still apparent in
these situations, because
talkative people tend to do more talking in libraries relative to
how much other people talk
in libraries.
People typically exhibit a wide range o f behaviors, yet w i th in
that variety are discernible
patterns that we refer to as personality traits. Traits are broad
concepts that allow us to label
and understand individual differences. Furthermore, traits
predict an individual's behavior

far into the future. For example, studies report that an
individual's personality in childhood
predicts various behaviors and outcomes in aduUhood,
including educational attainment,
employment success, marital relationships, illegal activities,
and health-risk behaviors."
presenteeism
Attending scheduled work
when one's capacity to
perform is significantly
diminished by illness or
other factors.
PERSONALITY DETERMINANTS:
NATURE VERSUS NURTURE
What determines an individual's personality? Most experts now
agree that personality is
shaped by both nature and nurture, although the relative
importance of each continues to
be debated and studied. Nature refers to our genetic or
hereditary origins—the genes that
we inherit from our parents. Studies of identical twins,
particularly those separated at b i r th ,
reveal that heredity has a very large effect on personality; up to
50 percent of variation in
behavior and 30 percent of temperament preferences can be
attributed to a person's genetic
characteristics." In other words, genetic code not only
determines our eye color, skin tone,
and physical shape; it also significandy affects our attitudes,
decisions, and behavior.
Some similarities of twins raised apart are surreal. Consider Jim
Springer and Jim Lewis,
twins who were separated when only four weeks old and didn't

meet each other unt i l age
39. In spite of being raised in different families and
communities in Ohio, the "Jim twins"
held similar jobs, smoked the same type of cigarettes, drove the
same make and color of car,
spent their vacations on the same Florida beach, had the same
woodworking hobby, gave
their first sons almost identical names, and had been married
twice. Both their first and
second wives also had the same first names!'''
Although personality is heavily influenced by hered-
ity, i t is also affected by nurture—the person's socializa-
t ion, life experiences, and other forms of interaction wi th
the environment. Personahty development and change
occurs mainly unt i l young adulthood; personality stabi-
lizes by the time people reach 30 years of age, although
some personahty changes may continue to age 50."
The main explanation for why personality becomes
more stable over time is that we form a clearer and more
r ig id self-concept as we get older.'* This increasing clarity
personality
The relatively enduring pattern
of thoughts, emotions, and
behaviors that characterize
a person, along with the
psychological processes
behind those characteristics.
of "who we are" serves as an anchor for our behavior because

the executive function—the
part o f the brain that manages goal-directed behavior—tries to
keep our behavior consis-
tent with our self-concept. Because our self-concept becomes
clearer and more stable wi th
age, our behavior and personality therefore also become more
stable and consistent. We
discuss self-concept in more detail in the next chapter. The
main point here is that person-
ality is not completely determined by heredity; life experiences,
particularly early in life,
also shape each individual's personality traits.
PB connect
your knowledge about the five-
factor model of personality, go to
www.mcgrawhitlconnect.com,
questions on this topic,
FIVE-FACTOR MODEL OF PERSONALITY
One of the most important ideas of personality theory is that
people possess specific person-
ality traits. Traits such as sociable, depressed, cautious, and
talkative represent clusters of
thoughts, feelings, and behaviors that allow us to identify,
differentiate, and understand
people.''' Hundreds of personality traits have been described
over the years, so personality
experts have tried to organize them into smaller clusters. The
most widely respected cluster-
mg of personality traits is the five-factor model (FFM), also
known as the "Big Five" person-
ality dimensions. Several decades ago, personality experts
identified more than 17,000 words

that describe an individual's personality. These words were
distilled down to five abstract
personality dimensions. Similar results were found in studies of
different languages, suggest-
ing that the five-factor model is fairly robust across cultures.'*
These "Big Five" dimensions,
represented by the handy acronym CANOE, are outlined in
Exhibit 2.3 and described next:
• Conscientiousness. Conscientiousness characterizes people
who are organized, de-
pendable, goal-focused, thorough, disciplined, methodical, and
industrious. People
wi th low conscientiousness tend to be careless, less thorough,
disorganized, and
irresponsible.
• Agreeableness. This dimension includes the traits of being
trusting, helpful, good-
natured, considerate, tolerant, selfless, generous, and flexible.
Some scholars prefer
the label "friendly comphance" for this dimension, with its
opposite being "hostile
noncompliance." People wi th low agreeableness tend to be
uncooperative and
intolerant of others' needs, as well as more suspicious and self-
focused.
• Neuroticism. Neuroticism characterizes people who tend to be
atrxious, insecure,
self-conscious, depressed, and temperamental. In contrast,
people with low neuroti-
cism (high emotional stability) are poised, secure, posifive, and
calm.
• Openness to experience. This dimension is the most complex

and has the least agree-
ment among scholars. It generally refers to the extent to which
people are imaginative,
EXHIBIT 2.3
Five-Factor Model's Big Five
Personality Dimensions
Personality
dimension
People with higher scores on this dimension
tend to be more:
, Organized, dependable, goal-focused, thorough,
disciplined, methodical, industrious
Trusting, helpful, good-natured, considerate, tolerant,
/ selfless, generous, flexible
Anxious, Insecure, self-conscious, depressed,
temperamental
Imaginative, creative, unconventional, curious,
nonconforming, autonomous, perceptive
Outgoing, talkative, energetic, sociable, assertive
c o n n e c t
Are you introverted or extraverted?
Go to www.mcgrawhtHconnect.com

to assess whether you get your
energy from the outer (social) or
inner {reflection} world.
creative, unconventional, curious, nonconforming, autonomous,
and aesthetically per-
ceptive. Those who score low on this dimension tend to be more
resistant to change,
less open to new ideas, and more conventional and frxed in their
ways.
• Extraversion. Extraversion characterizes people who are
outgoing, talkative, ener-
getic, sociable, and assertive. The opposite is introversion,
which characterizes those
who are quiet, cautious, and less interactive with others.
Extraverts get their energy
from the outer world (people and things around them), whereas
introverts get their
energy from the internal world, such as personal reflection on
concepts and ideas.
Introverts do not necessarily lack social skills. Rather, they are
more inchned to
direct their interests to ideas than to social events. Introverts
feel quite comfortable
being alone, whereas extraverts do not.
Big Five Personality uiftsenstoas and Workplace Behavior The
personal-
ity dimensions in the five-factor model influence employee
motivat ion and role clarity in
various ways. ' ' Some experts suggest that agreeableness,
conscientiousness, and emo-
t ional stability ( low neuroticism) cluster around the broad
characteristic o f "getting
along." People w i t h high agreeableness are more sensitive to

others (more considerate
and selfless), those wi th high conscientiousness are more
dependable, and those wi th
h igh emotional stability are more upbeat. Some writers suggest
that extraversion also
relates to getting along because extraverts are more sociable.
Openness to experience,
extraversion, conscientiousness, and emotional stability cluster
around the broad charac-
teristic of "getting ahead." Those wi th high openness to
experience are more eager to t ry
out new ideas, extraverts are more assertive, those wi th high
conscientiousness are more
goal-oriented, and those wi th high emotional stability are more
confident i n their ability
to perform well.
Personality traits reflect an individual's behavioral tendencies,
so they are fairly good at
predicting a number o f workplace behaviors and outcomes,
even after controlling for em-
ployee abihty and other factors. Personality traits are even
apparent i n the content of our
Facebook profiles and other website information.
Conscientiousness and emotional
stability (low neuroticism) stand out as the personality traits
that best predict individual
performance in almost every job group.''" Both are motivational
components of personahty,
because they energize a willingness to fulfOl work obligations
wi th in established rules (con-
scientiousness) and to allocate resources to accomphsh those
tasks (emotional stability).
Various studies have reported that conscientious employees set
higher personal goals for
themselves, are more motivated, and have higher performance

expectations than do em-
ployees with low levels of conscientiousness. They also tend to
have higher levels of organi-
zational citizenship and work better in organizations that give
employees more freedom
than in traditional command-and-control workplaces.""
The other three personality dimensions predict more specific
types of employee be-
havior and performance.'" Extraversion is associated wi th
performance in sales and man-
agement jobs, where employees must interact wi th and
influence people. Agreeableness
is associated wi th performance in jobs where employees are
expected to be cooperative
and helpful, such as work ing in teams, customer relations, and
other conflict-handling
situations. People high on the openness-to-experience
personality dimension tend to be
more creative and adaptable to change. Finally, personality
influences employee well-being
five-factor model (FFM)
The five abstract dimensions
representing most personality
traits: conscientiousness,
emotional stability, openness
to experience, agreeableness, and
extroversion.
conscientiousness
A personality dimension
describing people who are careful,
dependable, and self-disciplined.
neuroticism

describing people with high levels
of anxiety, hostility, depression,
and self-consciousness.
extraversion
describing people who are
outgoing, talkative, sociable, and
assertive.
Companies spend big dollars
on personality tests, yet recent
studies have found that job
applicants already reveal some
of their personality traits
through the content of their
Facebook pages, blogs, or
other personal websites.
Even the act of blogging or
participating in social network
sites can indicate specific
personality traits. Extraversion,
openness to experience, and
agreeableness are usually the
easiest traits to estimate from
the content of online sources,
whereas neuroticism is the
most difficult."
aoomedr
Can you identify an individual's

personality from the words he or
she uses when blogging? Go to
www.mcgrawhillconnect.com to
assess how well you can estimate
personality traits from blogging
words.
a c o n n e c t
Are you a sensing or intuitive type?
Go to www.mcgrawhiltconnect.com
to assess how you score on this
Jungian personality type.
in various ways.'*'* Overall, personality influences a persons
typical emotional reactions to
the job, how well he or she copes wi th stress, and what career
path would make that per-
son happier.
JUNGIAN PERSONALITY THEORY AND
THE MYERS-BRIGGS TYPE INDICATOR
The five-factor model of personahty is the most respected and
supported in research, but it
is not the inost popular in practice. That distinction goes to
Jungian personality theory,
which is measured through the Myers-Briggs Type Indicator
(MBTI) (see Exhibit 2.4).
Nearly a century ago, Swiss psychiatrist Carl Jung proposed
that personality is primari ly
represented by the individual's preferences regarding perceiving
and judging information."*'
Jung explained that perceiving, which involves how people
prefer to gather information or
perceive the wor ld around them, occurs through two competing
orientations: sensing (S)
and intuition (N). Sensing involves perceiving information

directly through the five senses;
it relies on an organized structure to acquire factual and
preferably quantitative details. I n -
tuition, on the other hand, relies inore on insight and subjective
experience to see relation-
ships among variables. Sensing types focus on the here and
now, whereas intuitive types
focus more on future possibilifies.
Jung also proposed that judging—how people process
information or make decisions
based on what they have perceived—consists of two competing
processes: thinking (T) and
feeling (F). People wi th a th ink ing orientation rely on rational
cause-ajid-effect logic and
systematic data collection to make decisions. Those wi th a
stroirg feeling orientation, on
the other hand, rely on their emotional responses to the options
presented, as well as to
how those choices affect others. Jung noted that along wi th
differing in the four core pro-
cesses o f sensing, intuition, th inking, and feeling, people also
differ in their degrees o f
extraversion-introversion, which was introduced previously as
one of the Big Five person-
ality traits.
Along wi th tneasuring the personality traits identified by Jung,
the M B T I measures
Jung's broader categories ot perceiving and judging, which
represent a person's attitude
toward the external world. People wi th a perceiving orientation
are open, curious, and flex-
ible; prefer to adapt spontaneously to events as they unfold; and
prefer to keep their options
open. Judging types prefer order and structure and want to

4 Part One Introduction Welcome to the Field of Organizati.docx

More Related Content

Similar to 4 Part One Introduction Welcome to the Field of Organizati.docx (20)

More from gilbertkpeters11344 (20)

Recently uploaded (20)

4 Part One Introduction Welcome to the Field of Organizati.docx