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Summary Organizational Behavior, Business Professionals (E_MB_BPROF)
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Summary of the book Organizational Behavior by Hitt. Chapters 1, 4-12, 14.
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Summary of Organizational Behavior by HittChapter 1: A Strategic Approach to Organizational Behavior
Organizational behavior: the actions of individuals and groups in an organizational context.
Strategic OB approach: an approach that involves organizing and managing people’s knowledge and
skills effectively to implement the organization’s strategy and gain a competitive advantage.
Important factors that determine the behavior and ultimate value of people in an organization:
- Individual level: ability to learn, personality characteristics, personal attitudes. → represent or
are related to important capabilities.
- Interpersonal level: quality of leadership, communication within and between groups, and
conflict within and between groups are noteworthy. → influence the degree to which the
capabilities of individuals are unleashed and fully utilized within an organization.
- Organizational level: structure and culture of the organization → influence whether the
talents and attitudes of individuals are effectively leveraged to create positive outcomes.
The factors interact to produce the outcomes of (value of the people):
- Productivity: refers to the outputs of individuals and groups.
- Satisfaction: relates to the feelings that individuals and groups have about their work and the
workplace.
- Organizational success: is defined in terms of competitive advantage and financial
performance.
The importance of gaining an effective working knowledge of OB:
- There are complexities and subtleties involved in fully leveraging the capabilities of people.
Common sense alone does not equip the manager with sufficient understanding of how to
leverage the human capabilities.
- Managers must avoid the allure of simple answers for resolving organizational issues. A
working knowledge of OB helps managers gain the confidence required to empower
associates and work with them to find creative solutions to problems that arise. The
complexity of organizational life requires that managers and associated perform at high levels
to contribute to organizational success and achieve personal growth.
- The strategic approach to OB integrates important behavioral science knowledge within an
organizational setting and emphasizes effective applications. This knowledge cannot be
obtained from information derived independently from other specialized fields.
Organization: a collection of individuals forming a coordinated system of specialized activities for the
purpose of achieving certain goals over an extended period of time.
Human capital: the sum of the skills, knowledge and general attributes of the people in an
organization.
- Value: human capital value can be defined as the extent to which individuals are capable of
producing work that supports an organization’s strategy for competing in the marketplace.
- Rareness: human capital rareness is the extent to which the skills and talents of an
organization’s people are unique in the industry.
- Imitability: human capital imitability is the extent to which the skills and talents of an
organization’s people can be copied by other organizations.
,Competitive advantage: an advantage enjoyed by an organization that can perform some aspect of its
work better than competitors can or in a way that competitors cannot duplicate, such that it offers
products/services that are more valuable to customers.
Positive organizational behavior: an approach to managing people that nurtures each individual’s
greatest strengths and helps people use those strengths to their and the organization’s advantage.
High-involvement management: involves carefully selecting and training associates and giving them
significant decision-making power, information and incentive compensation.
Characteristics/dimensions of high-involvement management:
- Selective hiring: large pools of applicants are built through advertising, word of mouth and
internal recommendations. Applicant are evaluated rigorously using multiple interviews, tests
and other selections tools. Applicants are selected on the basis not only of skills but also of fit
with culture and mission.
- Extensive training: new associates and managers are thoroughly trained for job skills through
dedicated training exercises as well as on-the-job training. They also participate in structured
discussions of culture and mission. Existing associates and managers are expected or required
to enhance their skills each year through in-house or outside training and development. Often,
existing associates and managers are rotated into different jobs for the purpose of acquiring
additional skills.
- Decision power: associates are given authority to make decisions affecting their work and
performance. Associates handle only those issues about which they have proper knowledge.
Lower-level managers shift from closely supervising work to coaching associates. In addition to
having authority to make certain decisions, associates participate in decisions made by lower-
level and even middle managers.
- Information sharing: associates are given information concerning a broad variety of
operational and strategic issues. Information is provided through bulletin boards, company
intranets, meetings, posted performance displays and social networking platforms.
- Incentive compensation: associates are compensated partly on the basis of performance.
Individual performance, team performance and business performance all may be considered.
,Knowledge objectives of chapter 1
The strategic approach to organizational behavior involves organizing and managing people’s
knowledge and skills effectively to implement the organization’s strategy and gain a competitive
advantage.
A strategic approach to organizational behavior is important because it addresses key issues for
managers at all levels of the organization. For senior managers, the strategic approach to OB provides
guidance for activities such as shaping the internal norms and practices of the organization. For middle
managers, it provides guidance on matters such as implementing the strategic initiatives designed by
senior managers. For lower-level managers, taking a strategic approach to OB helps with coaching and
negotiating, among other important activities necessary to effectively implement the organization’s
strategy. Managers who lack an appreciation for the particulars of organizational behavior are likely to
experience less successful careers.
A strategic approach to organizational behavior builds on knowledge from the behavioral sciences. It
differs from these fields, however, in two important ways. First, it integrates knowledge from these
fields, rather than taking the narrow view of any one of them. Second, it focuses on behaviors and
processes that help create competitive advantages and financial success for the organization. Other
fields often adopt the goal of understanding individual and group behavior without also understanding
how such knowledge can contribute to enhancing the performance of organizations.
Human capital is an intangible resource of the organization. It represents capacity for current work
and potential for future work. It includes the skills, knowledge, capabilities, values, beliefs and
attitudes of the people in the organization. Human capital is important because an organization’s
ability to create something of value for customers comes largely from the know-how and intellect
embodied in its people rather than from machinery and other tangible assets.
Human capital can be a source of competitive advantage for an organization when it has value (it is
relevant for the organization’s strategy), is rare (skills and knowledge are possessed by relatively few
outside the organization) and has low imitability (other organizations cannot easily duplicate the skills
and knowledge). These three characteristics provide the base for gaining an advantage. For human
capital to be a source of competitive advantage, it must be managed effectively.
Positive organizational behavior focuses on nurturing individuals’ greatest strengths and helping
people use them to their and the organization’s advantage. Positive OB suggests that people will likely
perform best when they have self-confidence, are optimistic, and are resilient. People are healthier
and more productive when they have strong self-efficacy with regard to the work that they are doing.
Individuals who are managed in a positive manner and take a personally positive approach to
outperforming others often are healthier mentally and physically.
High-involvement management is an important method for developing and leveraging human capital.
This approach has five key components. Collectively, these five aspects of high-involvement
management yield empowered workers.
The effectiveness of high-involvement management is supported by strong evidence. In studies of
many industries, high-involvement management has been found to lead to high productivity,
satisfaction, financial success and competitiveness.
, Chapter 4: Learning and Perception
Learning: a process through which individuals change their relatively permanent behavior based on
positive or negative experiences in a situation.
- Learning takes place only when changes in capabilities occur. These changes should result in
changed behavior.
- Learning is driven by experience with a particular situation.
Operant conditioning theory: an explanation for consequence-based learning that assumes learning
results from simple conditioning and that higher mental functioning is irrelevant.
Social learning theory: an explanation for consequence-based learning that acknowledges the higher
mental functioning of human beings and the role such functioning can play in learning.
- Self-efficacy: an individual’s belief that he or she will be able to perform a specific task in a
given situation.
Basic elements of learning:
- The situation (or ‘the stimulus situation’)
- The behavioral response of the associate/manager to the situation.
- The consequences of the response for the associate/manager.
Different types of consequence of behavioral responses:
- Positive reinforcement: a reinforcement contingency in which a behavior is followed by a
positive consequence, thereby increasing the likelihood that the behavior will be repeated in
the same or similar situations.
- Negative reinforcement: a reinforcement contingency in which a behavior is followed by the
withdrawal of a previously encountered negative consequence, thereby increasing the
likelihood that the behavior will be repeated in the same or similar situations.
- Punishment: a reinforcement contingency in which a behavior is followed by a negative
consequence, thereby reducing the likelihood that the behavior will be repeated in the same
or similar situations.
- Extinction: a reinforcement contingency in which a behavior is followed by the absence of a
previously encountered positive consequence, thereby reducing the likelihood that the
behavior will be repeated in the same or similar situations.
Guidelines for imposing punishment (minor informal or major formal):
- Deliver the punishment as quickly as possible following the undesirable behavior.
- Direct the punishment at specific behaviors that have been made clear to the recipient.
- Deliver the punishment in an objective, impersonal fashion.
- Listen to the offending party’s explanation before taking action.
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