CHAPTER 1 - A STRATEGIC APPROACH TO ORGANIZATIONAL BEHAVIOR
Organizational behavior (OB)= actions of individuals and groups in an organizational context
Managing organizational behavior = acquiring, developing, and applying the knowledge and skills of people.
Strategic approach of OB = involves organizing and managing people’s knowledge and skills effectively to implement the
organization’s strategy and gain a competitive advantage
→ People are the foundation of an organization’s competitive advantage
Factors and outcomes of a strategic approach to OB
→ these factors interact to produce the outcomes
of
- Productivity: output of individuals and
groups
- Satisfaction: feelings that individuals
and groups have about the workplace
- Organizational success: competitive
advantage and financial performance.
Common sense cannot be the only basis of action
for managers. Effective managers deeply
understand that knowledge about people and
organizations is the true source of their success.
A strategic approach to OB builds on behavioral
science disciplines like psychology, social
psychology, sociology, economics, and cultural anthropology. But it differs from these disciplines in 2 ways:
1. It integrates knowledge from all these areas to understand behavior in organizations
2. It focuses on behaviors and processes that help to create competitive advantage and financial success.
Definition of organization
Organizations are characterized by:
- Network of individuals
- System
- Coordinated activities
- Division of labor
- Goal orientation
- Continuity over time, regardless of change in individual membership
Organization = collection of individuals, whose members may change over time, forming a coordinated system of specialized
activities for the purpose of achieving specific goals over an extended period of time
The role of Human Capital in creating competitive advantage
Human capital = the sum of the skills, knowledge and general attributes of the people in an organization.
→ In contrast with tangible resources, it does not depreciate in value as it is used, but rather, it is commonly enhanced through use.
→ knowledge has become a critical resource for many firms. it plays a key role in gaining and sustaining an advantage over the
competition.
→ the goal is to enhance organizational learning and build knowledge and skills in the firm to enrich the human capital.
Competitive advantage → advantage of an organization that can perform some aspect of its work better than competitors can or in a
way that competitors cannot duplicate
The degree to which human capital is useful for creating competitive advantage is determined by:
1. Value
2. Rareness
3. Difficulty to imitate
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,Human capital value = extent to which individuals are capable of producing work that supports an organization’s strategy for
competing in the marketplace
Firms use one of 2 basic strategies:
1. Creating low-cost products or services for the customer while maintaining acceptable or good quality
2. Differentiating products from competition on the basis of special features or superior quality and charging higher prices for
the higher value goods.
Human capital rareness =the extent to which the skills and talents of an organization’s people are unique in the industry. In some
cases, individuals with rare skills are hired into the organization. In other cases, individuals develop rare skills inside the
organization
Human capital imitability = the extent to which the skills and talent of an organization’s people can be copied by other
organizations.
The skills and talent of most difficult to imitate are usually those that are complex and learned inside a particular organization.
→ tacit knowledge: type of knowledge that people have but cannot articulate
Therefore, to create sustained competitive advantage, human capital must
- Be valuable for executing an organization’s strategy
- Rare in the industry
- Difficult to imitate
Positive organizational behavior
Comes from positive organizational psychology, which tries to stop “fixing” what is wrong with people.
Positive organizational behavior = focuses on nurturing an individual’s greatest strengths and helping people use them to their and
the organization’s advantage.
→ it suggests that people will likely perform best when they have self-confidence, are optimistic, and are resilient.
Managers should help their associates develop positive emotions in themselves and others.
Providing leadership that encourages and nurtures positive emotions often requires the application of EI. People with strong EI have
self-awareness, good social skills, display empathy, and strong motivation, and regulate their own behavior without the oversight of
others.
High involvement management (High-performance management)
= involves carefully selecting and training associates and giving them significant decision-making power, information, and incentive
compensation.
Key characteristics:
1. Selective hiring → applicants are evaluated rigorously using multiple interviews, test,s and other selection tools. Applicants
are selected not only on the basis of skills but also on the fit with the culture and mission
2. Extensive training → new associates and managers are thoroughly trained for job skills through dedicated training exercises.
3. Decision power → associates are given authority to make decisions affecting their work and performance. They also
participate in decisions made by lower-level and middle-managers
4. Information sharing → associates are given information concerning a broad variety of operational and strategic issues
5. Incentive compensation → associates are compensated partly on the basis of performance
High involvement managers place significant value on empowerment because empowered associates have the tools and support
required to create value for the organization.
→ they constantly seek to identify situations in which responsibility can be delegated
→ managing through encouragement and commitment rather than fear and threat
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,CHAPTER 4 - LEARNING AND PERCEPTION
When individuals first enter an organization, they bring with them their own unique experiences, perceptions, and ways of behaving.
Associates and managers must be acquainted with the principles and processes that govern learning.
Learning = 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.
→ learning is driven by experience with a particular situation
Two theories can be used to explain learning.
- Operant conditioning theory = explanation for consequence-based learning that assumes that higher mental processes are
irrelevant for behavior because all human learning is the result of simple conditioning
- Social learning theory = acknowledging higher mental functioning, this theory emphasizes that humans can observe others
in a situation and learn from what they see.
There are 3 basic elements of learning:
1. The situation
2. The behavioral response of the associate or manager to the situation
3. The consequence of the response for the associate or manager
4 REINFORCEMENT CONTINGENCIES:
Positive reinforcement = reinforcement contingency in
which a behavior is followed by a positive consequence. This
increases the likelihood that the behavior is going to be
repeated.
Negative reinforcement = a reinforcement contingency in
which a behavior is followed by the withdrawal of previously
encountered negative consequences. This increases the
likelihood that the behavior is going to be repeated.
Punishment = negative reinforcement contingency in which
a behavior results in an undesirable consequence rather than
removing it. This reduces the likelihood that the behavior is
going to be repeated.
Associates and managers should follow several guidelines when imposing punishment:
- Deliver the punishment as quickly as possible
- Direct the punishment at specific behaviors that have been made clear
- Deliver the punishment in an objective, impersonal fashion
- Listen to the offending party explanation before taking action
Punishment can be a difficult process to manage. Organizations may prefer extinction.
Extinction = reinforcement contingency in which a behavior is followed by the absence of a previously encountered positive
consequence, reducing the likelihood that the behavior will be repeated
To fully leverage-positive or negative reinforcement tools, it is important to understand schedules of reinforcement.
Continuous reinforcement = reinforcement schedule in which a reward occurs after each instance of behavior or set of behaviors
Often not used because
- Once initial learning has occurred, continuous reinforcement is not required to maintain the learned behavior
- Both managers and associates are presumed to be self-managing at least to some degree → so they don’t need continuous
reinforcement
Intermitted reinforcement = reinforcement schedule in which a reward does not occur after each instance of behavior or set of
behaviors. There are 4 types:
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, 1. Fixed interval → reinforcement becomes available only after a fixed period of time has passed since the previous
reinforcement
2. The variable interval → becomes available after a variable period of time
3. Fixed ratio → a reinforcer is introduced after the desired behavior has occurred a fixed number of times
4. Variable ratio → a reinforcer is introduced after the behavior has occurred a variable number of times. This is a common
schedule in many areas of life, including sport.
Social learning theory/social cognitive theory - argues that in addition to learning through direct reinforcement, people can also
learn by anticipating consequences of the behavior and by modeling others.
→ a person can try out various scenarios in their mind to determine what potential consequences may result from a behavior
→ people can learn by observing others
→ individual’s belief that they will be able to perform a specific task in a given situation is important for learning → self-efficacy
→ if there are 2 people with the same ability, the person with a higher self-efficacy will perform better and learn more
Other conditions help facilitate adult learning:
- Associates need to know why they are learning what they are learning
- Associates need to use their own experiences as the basis for learning
- Associates need to practice what they have learned
- Associates need feedback
THERE ARE 3 LEARNING METHODS:
1. OB mod
2. Simulation learning
3. Learning from failure
OB Mod = formal procedure focused on improving task performance through positive reinforcement of desired behaviors and
extinction of undesired behaviors.
Findings: PIGS (positive, immediate, graphic and specific) feedback coupled with social reinforcement for desired behavior
improves the delivery of quality service by tellers in a bank. For jobs that are complex and nonroutine, OB Mod tends to be less
effective
Simulation = representation of a real system that allows associates and managers to try various actions and receive feedback on the
consequences of those actions.
→ although simulations are important and useful, they are usually simplified models of reality
Learning from failure
-> high involvement firms often attempt to leverage their human capital in ways that will enhance innovation. So they
empower employees to experiment which often produces failure. The key is to learn from this failure. Intelligent failures are a
result of certain kinds of actions:
- actions that are thoughtfully planned
- actions that have a reasonable chance of producing a successful outcome
- That are typically modest in scale
- That are executed and evaluated in a speedy fashion
- That are limited to domains that are familiar enough
If an employee does not perceive people, tasks, or events accurately, learning from experience is difficult.
Perception = process that involves sensing various aspects of a person, task, or event and forming impressions based on selected
inputs.
Perception comprises 3 basic stages:
1. Sensing various characteristics of a person or event
2. Selecting from the data those facts that will be used to form the perception
3. Organizing the selected data into a useful concept pertaining to the object or a person
Shortcomings can lead to inaccurate perceptions about people. these erroneous perceptions can interfere with learning how to best
interact with a person and can lead to poor decisions.
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