OB Lecture Notes
OB Lecture Notes
Comm
Culture
Power
Strategy+str
ucture
SANRIZZ
ENRON
SOLARIS/SUPER
NOVA
AUTO-MAKERS
APPLE
Lecture 1 ppl& organisation
Why OB is important
1. The separation of Conception and Execution (Managers think and workers do).
2. Standardisation of tasks; deskilling.
3 The belief that managerial authority is based on scientific impartiality.
4. Financial reward is the employees main motivator (Taylors idea of the Trained Gorilla).
5. A mechanistic view of the organisation people as interchangeable parts; just cogs in the
machine.BUT plays down the psychological & social aspects of organisation (e.g., job
satisfaction, social affiliation, etc.).
Human Relations School
Elton Mayo
Believed that the worker problem (eg: dissent, disobedience, industrial unrest, etc.) was a result
of psychological disturbances brought about by the alienating nature of work.
The Hawthorne Studies
By spending so much time around the workers, researchers began to notice a number of
important social factors that had an impact of productivity
Increase happiness by making work more involving + recognize social value
Despite the isolating effects of standardisation and the increasing technical division of labor,
work remains a group activity.
Work activities
Since need of recognition, security, sense of belonging---- gravitate towards informal goups
Informal groups: social control over working habits + attitudes
Managers should recognise the impact of these informal groups in exerting an influence on
productivity (e.g., chiselers and ratebusters).
Organisations should seek to ensure a good fit between informal groups and formal work
structures.
PERCEPTION: the process of organising and interpreting sensory data to make sense of your
environment
Perceptions of reality form the basis for behaviour in all facets of our lives
Very important in organisational settings, because our perceptions inform our decisions and
actions
People assume our perceptions allow us to know what is real. But there are limits
We cannot observe, affect and know how someone is feeling.
1. Affect=observable mood
2. We may be expected to display a mood x really feel (fake)
3. We may deliberately display a mood ----deceive
4. Fundamental problems:
Physiological+psychological limits to our perception ----impinge our cognitive ability
Cognitive Limits to perception
Even point out to you, still have trouble to see whats really are
Gestalt psychology Our brain is predisposed to certain types of perception
(Gestalt = Shape/Form).
Highly influential in organisational behaviour through the work of Kurt
Lewin.
Limits to perception: draw conclusions on the basis of limited infor, we are evolutionally
adapted to do this.
Social determinants: our background, education, social class
Limits to accuracy of our perception:
1 intentionally misleading behaviour
2 physiologically/ psychologically
3 social factors
This can have important impacts on how we perceive reality, and act, within
organisations
The Primacy Effect Research indicates that we draw conclusions about others in a matter of
seconds.
Selective Perception we focus on particular things, reflecting our own interests, background, etc.
Shows the importance of cultural expectations, background, social class, external signals, etc.
The Contrast Effect If you want to look attractive, stand next to someone ugly!
Recruitment & Selection Interviews (when used alone) are a poor predictor of performance but we
still heavily rely on them.
Performance Management we tend to overestimate the performance of above average performers
and underestimate the of below performance average performers.
The Double-Curse
Our lack of skill not only deprives us of the ability to improve on poor performance, but also deprives us of
the ability to recognise our performance is poor in the first place!
The less skilled and knowledgeable we are, less likely we are to recognise our deficiencies
Decision Making
Decisions involve choosing a course of action from among a number of possible courses of
action
Decision making is a response to a perceived problem or problems
Decisions are based on data, in the form of perceptions
Therefore, perceptions are crucial in decision making in organisations
Relevant: The problem is clear and unambiguous.
We have all the relevant information.
We can evaluate all possible outcomes.
We can rank those outcomes in terms of
preference criteria.
We can take as long as we need to.
With all the above in place, we can make an
optimal or maximising decision.
Herbert Simon and Bounded Rationality
Simon suggests that decisions are made on the basis of satisficing - i.e., decisions are made
on the basis of being able to satisfy certain minimum standards.
Individuals can never make decisions on a truly rational basis as they have limited
information processing capabilities.
Our decisions are arrived at using a combination of hard data (i.e., facts), perceptions, and values.
We act on the basis of incomplete information
Anchoring we tend to place disproportionate weight on the first information
HOT and COLD decision-making
Heuristics : experience-based techniques for problem soving , learning and discovery
Formal decision-making rules (e.g., first look left, then look right).
Experiential decision-making rules (e.g., how fast traffic travels).
Culturally-based decision-making rules
e.g., Do other road users obey therules?; jay-walking, etc.).
We often use heuristics in managementndecision-making.
however, that in trusting our gut instinct we are combining formal, experiential, and
cultural rules. Generally they are helpful HOWEVER can lead to severe errors and
biases
1. Overconfidence bias: the tendency to overestimate the probability that youre right, more optimistic, you
may avoid problems while planning. less successful,people more knowledgeable, less display confidence,
2. Anchoring: the tendency to stick to an unreasonable anchor and then adjust
insufficiently.
3. Availability: the tendency for people to base judgments on information that is readily
available to them.
4. Escalation of commitment: an increased commitment to a previous decision in spite of
negative information, view themselves responsible for failure, people who spend more money and time,
easier to escalate of commitment
5. confirmation bias: seek out infor, do what people want to hear
Through interaction with our peers we acquire beliefs, attitudes, values, and characteristic behaviours
In this way, who we associate with has a crucial impact on our sense of IDENTITY
Groups also create a social setting where we can exert influence on others (e g exhortation demonstration
e.g., demonstration,
Groups satisfy important needs (social affiliation, common purpose, recognition, etc.)
Work teams recognise interdependence like informal groups
Work teams are striving towards a common objective.
A work teams common objective is (or, at least,should be) aligned with the objectives of the
organisation
Work teams also make use of the SYNERGY effecti.e., team members couldnt achieve in
isolation what they achieve together
Team development
Tuckmans traditional five stages models attempt to evaluate such team development by dividing
into 5 parts---- forming, storming, norming, performing and adjourning (Tuckman,1965).
MAINTENANCE (sometimes called PROCESS) where the team focuses its efforts on establishing
common purpose and cohesiveness.
TASK where the team focuses its efforts on getting the job done.
Norms
A group exercises a disciplinary effect on its members to ensure they behave in acceptable ways. What is acceptable
tends to reflect the values of the wider social setting from which the groups members are drawn. However, if a group
becomes socially isolated it can lose its moral compass (William compass Golding).
Leadership
The influence that individuals exert on others to achieve goals in
organisations
Key points
Value+ attitudes influence our behaviour, behaviour change attitudes (role
playing, prison experiment ) and if attitudes do change it becomes selfreinforcing
a broad shared value is a basis of culture
If we want to work effectively, particularly managing staff, we need to understand what
shapes behaviour
In part it is a function of social pressures (conformity)
But it is also shaped by individual values and attitudes that affect behavioural component
Collective values form the basis for culture, which is expressed in the form of characteristic
attitudes and behaviours
Most of us will work across cultures so we need to understand the impact of culture on
behaviour
Compliance: implies external coercion, do sth because other tell us to do, involves assessment of
consequences, result of rules, laws---a formal value system
Conformity: implies internal acceptance, no external instruction, social presseure(mob behaviour) do
because everyone else does----internalised value system
The students quickly began acting out their roles with "guards" becoming and "prisoners" showing
extreme passivity and depression.
Jane Elliot blue/brown eyes: superior colour oppress inferior colour and they feel depressed
Conformity:
1 social pressure eg: peer pressure, mob behaviour, would lead us to run counter to our personal values
2 conflict: fitting in vs doing the right thing
3 more or less likely: same direction
4 values bring into organisation would impact on behaviour
5 internal value(personal) vs external (organisational) value
Values
1 expression of right conduct, right or good-----bring a better set of social arrangement(better environment)
2 rank by content/intensity, EG: rank important and strongly held value (fairness) higher than trivial and weakly held (fun)
3 terminal: goals that people pursue over a lont-term, wider ambition rather than specific achievement, eg: achieve
recognition in society
4 instrumental: the means to achieve long term-goals, usually specific, eg in order to achieve recognition I need to work
hard
Attitudes
Values like Hofstedes (Week 4) can characterize certain organizational cultures (Week 9)"
Lecture 5 motivations
Key points
Motivation means effort, persistence, direction, goals
Theory of MOTIVATION: 1 Abraham Maslows, ERG (three level)and McClelland (conditions).e.,
they do not take into consideration social and organisational influences on motivation.
2 do take into those influences: Process theories: theories explain how motivation occurs
a, expectancy theory: motivation may affected by the results people expect to get from the
work
b, equity theory, people would compare own input and outcome with others
c, goal theory, how to set goals for people to achieve
3 motivation job design job design job characteristic(1 skill variety 2 job
significance 3 autonomy 4 job identity 5 feedback) and job enrichment
Motivation:
We define motivation as the degree of persistent effort directed towards a goal
The amount of EFFORT someone puts into achieving a work related goal (i.e., how hard
they try) remember, it is not just PHYSICAL effort.
Humans are intentional beings the internal world of the mind is directed to outside matters.
Theories of motivation attempt to link the internal world of the mind to the outside world
of behaviour.
encourage desirable behaviours and discourage undesirable behaviours.
PERSISTENCE in exercising that effort.
DIRECTION i.e., it is aimed at achieving a goal
GOALS: all motivated behaviour has some goal or objective toward which it is directed
Intrinsic motivation: self-applied, directly stems from relationship with workers and task
Extrinsic motivation: applied by others, stems from working environment external to the task
Abraham Maslow Humanistic Theories of Motivation
Maslows reaction against behaviourism was to insist that human actions are motivated by certain
universal needs.
This assumes an escalating degree of conscious intent we pursue a need if we think is in deficit but, once
satisfied, we move on to pursue another need (the progression principle).
These can be arranged in a hierarchy of importance.
Theories like Maslow, ERG (three level)and McClelland (conditions) are popular and intuitive but
they are STATICi.e., they do not take into consideration social and organisational influences on
motivation.
Process theories
Motivation theories that specify the details of how motivation occurs
Expectancy theory:
Equity theory: describes how and why people react when they feel unfairly treated
Goal setting theory: focuses on how to set goals for people to reach
The more scope (whole area it deals with) a job has (breadth/variety and depth/autonomy) the more its motivational
effects
The lesson from the research on job design is that jobs which have a range of tasks, high
autonomy, etc. are motivational, especially when employees are empowered
job motivation
What is Conflict?
Involves two or more parties
Can be overt (visible and perceived) or covert (unseen) but our interest is primarily in
overt conflict
One or both parties perceive that the other party or parties has had a negative impact on
their interests (or is about to)
Varies in terms of its intensity and importance, as well as the significance of outcomes
Where does conflict come from?
Interests: different individuals and groups have different interests
Perceptions: when there is a perceived clash of interests this creates conflict
The specific causes of conflict can be grouped into three categories: communication;
interpersonal; structure
Cause 1: Communication Problems
Where people in organisations do not communicate effectively with each other there is
potential for conflict
Caused by jargon, semantics, lack of sufficient information, etc.
too little/ too much cause conflicts, over-communicate will cause conflict
Non-verbal communication - turning away and turning towards
Interaction Disintegration (& Repair) Stop interrupting me!; You always have to have
the last word!; If you would just let me finish!
META-COMMUNICATION talking about talking
not the most important source, but most obvious manifestation
Cause 2: Interpersonal Issues
Sometimes the personalities of individuals in organisations lead to conflict
Emotions can cause conflict, e.g., a co-worker who is constantly angry about her/his
personal life
Differences in fundamental values, e.g., about what constitutes ethical behaviour, can lead
to conflict
Cause 3: structure
Within organisations, occupants of different roles have different interests, which can bring
them into conflict
e.g., CFOs agenda is to contain costs, while HR managers agenda is to upgrade skills via
spending
more on training
e.g., Employees interests are in being paid as much as possible per unit of effort, while HR
managers is to reduce payroll and increase output (structured antagonism)
Is Conflict a Bad Thing?
Traditional (unitarist) view conflict is dysfunctional and avoidable
Interactionist view conflict can be functional OR dysfunctional, and functional conflict
should be encouraged
Focused- or Managed-conflict view there are some specific cases where conflict can be
beneficial (e.g., teamwork)
Types of conflict
Task conflict low to moderate levels can be productive
Process conflict low levels can be productive
Relationship conflict mostly destructive
Relationship Conflict
The GLoP Problem From You did x! to You always do x to You are an x-type person!
GLOP can cause us to see ourselves and each other not as unique individuals but as a
certain type of person.
The Four Horsemen - criticism, defensiveness, contempt, and stonewallingthey delay
giving a clear answer or making a clear decision, often because there is something that they
want to hide or avoid doing.
Negative Affect Reciprocity & Escalation attribution error; Our problems are a result
of your moral failings.
Can Conflict be Eliminated?
The roots of conflict actual and perceived threats to interests are perennial (keep
occurring)
History shows us that conflict is a constant feature of all human societies (see Steven
Pinker)
In organisations, there will always be communication, interpersonal and structural issues
Conflict can be managed to some extent (e.g., via negotiation), but it cannot be eliminated
entirely
Stage of conflicts
Stage One: Potential Opposition
One or more of the causes discussed earlier is present, which provides the potential for
overt conflict to emerge
The presence of one or more causes is a necessary, but not sufficient, condition for conflict
to emerge
Communication
Interpersonal
Structure
Stage Two: Cognition and Personalisation
If the conditions in stage one threaten the interests of one or more parties, conflict becomes
a reality
but need not go any further unless
Cognition/perception level: one or more parties becomes aware of the conflict
But need not go any further unless
Personalisation/felt conflict: one or more parties experiences conflict (tension, anxiety,
frustration, hostility)
Which can lead to intentions
Stage 2 is important as its where conflict issues tend to be defined, willing/unwilling to
compromise. And emotions play a major role in shaping perceptions.
Stage Three: Intentions
When a situation is perceived and felt to be conflict, parties to the conflict may form
intentions to do something about it
Intentions can be classified as:
Competing: I will pursue my own interests regardless of the costs to the other party
Avoiding: I cant deal with this (give up own interests , uncooperative)
Compromising: we will both sacrifice some of our interests (
Accommodating: I will sacrifice some of my own interests for the sake of the other
party(unassertive+cooperative)
Collaborating: we will seek mutually acceptable outcomes
Stage Four: Behaviour
Based on intentions, parties to a conflict engage in behaviours to manage the conflict
Behaviours can emphasise either
Conflict resolution; or
Conflict intensification
Behaviours will be informed by (a) intentions and (b) the level of conflict
Resolution and Intensification Tactics
Resolution
Problem solving Superordinate goals Expansion of resources Avoidance Smoothing
Compromise
Escalation
Communication Bringing in outsiders Appointing a devils advocate
Stage Five: Outcomes
Potential Functional outcomes
Brings into the open problems that have been ignored previously
Challenges groupthink
Encourages new ideas, facilitating innovation and change
May improve decision quality by forcing people to challenge their assumptions
Potential Dysfunctional outcomes
Negative emotions and stress
Reduces communication required for coordination, i.e., Leads to inefficiency
Destroys group cohesion(group members fit together)
The Negotiation Situation (Adapted from Lewicki 1994)
Two or more parties (individuals or groups)
Conflict of interest between them, i.e., What one wants is not necessarily what the other
wants
Belief that it is possible to get a better deal by influencing the outcome, rather than simply
taking whats on offer
The parties prefer to search for agreement, rather than giving, breaking off the relationship
and falling back on BATNA (i.e., the Best Alternative to a Negotiated Agreement, the lowest
value acceptable to you for a negotiated agreement)
Distributive Bargaining: negotiation that seeks to divide up a fixed amount of resources: a
win-lose situation
First aggressive offer:more power, gain advantage+ the Anchoring bias, anchor point is
set, fail to adjust subsequently
Fixed pie: the belief that there is only a set amount of goods or services to b divided up
between the parties
Integrative bargaining: negotiation that seeks one or more settlements that can create a
win-win situation
Compromise is the enemy to negotiate a win-win agreement
Convergence() of interests (potentially and partially)
Longer-term focus
e.g., negotiating a benefits package with a valued employee
Bargaining characteristic
Distributive bargaining
Integrative bargaining
Goal
Get as much pie as possible
Expand the pie so that both
are satisfied
Motivation
Win-lose
Win-win
focus
Positions
Interests
Interests
Opposed
congruent
Information sharing
Low
High
Duration of relationship
Short-term
Long-term
Lecture 7 organisational change
key points: 1 plans to changes 2 killers+cures
WHY IT MATTERS
Change is inevitable in organizations", often causes stress and resistance "
CHANGE POWER (Week 10): More power for customers in dictating design; R&D should not
impose
CHANGE CULTURE (Week 9): Increasing acknowledgement that customer is king
CHANGE STRUCTURE (Week 12): up cross functional teams so that sales, R&D, and
manufacturing can talk often and quickly
Nature of change
Revolutionary change: change that alters organisations very nature
Evolutionary change: ongoing minor changes that are incorporated in the existing
organisational strcture.
Management would prefer avoid change, becaused of its cost, disruptive impact and
threat to managements control.
Hence, two options. 1 change incrementally as environment changes, achieve environmental
fit but create internal inconsistencies. 2 delay change until it is necessary and make it
Participation: reduce resistance, obtain commitment, and increase the quality of the change
decision
Coercion: force people through policy
Realigning staff profiles: change staff
4(C): REFREEZING
Burning bridges: Ensure there is
no way back.
Evidence stream: Show them time
and again that the change is real.
Rites of passage: Use formal
rituals to confirm change.
Socializing: Build the new way of
doing things into the social fabric.
Encoding:
Decoding: PERCEPTUAL LIMITATIONS!
Selective perception we only hear some of the information we receive!
Selective retention we only retain some of the information we hear
FEEDBACK
Feedback helps us understand how our messages are received!
Feedback helps us modify our communications and behaviour!
But feedback is also communication and subject to distortion !
Open system
LOAD
How many messages does it take to get your messages across
Underload: easy and repetitive jobs, overload: hard,
MEANING-CENTERED THEORY
All human interaction is communicative whether intended or not; you cant not communicate!
Communication in organizations creates shared understandings and meanings!
These shared meanings shape our experience of what the organization is; they help us make
sense of the organization!
Based on our sense making, then we act (or not) accordingly!
Communication shapes the way we organize activities and the decisions that we communicate!
Communication is intended to influence people and communication rules reinforce power!
Communication helps to create a particular organizational culture!
We socialize new members through the way in which we communicate with them!
Therefore by changing the metaphors we use,we can change: !
the way we think and act as individuals!
organizing & decision-making, power & influence, socialization and culture
Lecture 9 culture
A strong culture meant a more profitable company"
Flurry of research on organizational culture as a way to understand people in
organizations
Enron"
The largest bankruptcy in US at the time" A culture of arrogance and greed
"4,000 lost jobs and life savings in pension fund" 85,000 jobs lost at Arthur Andersen "
Skilling jailed for 24 years; Lay died"
British Petroleum(BP)"
Explosion on the Deepwater Horizon oil rig " A lax safety culture" Total costs now
reaching up to $38bn"
CEO Tony Hayward lost his job " Government trying to prove gross negligence will
increase damages"
News of the World"
Phone hacking scandal, Leveson inquiry" A culture of fear and of cover up" Tabloid
closed; two editors facing criminal charges" Entire company (NI) is under investigation"
James Murdoch stood down as chairman of News International "
WHY YOU SHOULD CARE
Hijack
(negative
implication
on symbols)
Managing culture
INTEGRATIONIST THEORY
A single, uniform strong culture is better "
Allows people to work together: common set of values, less need for rules"
Makes organization stable; culture is reproduced"
Makes the organization more effective (functionalist)"
Allows it to survive or thrive in the environment (EXTERNAL ADAPTATION)"
Holds its members together (INTERNAL INTEGRATION)"
Schein identify culture as playing an important role in internal integration and in external
adaptaion of the org to its environment. Ie:argreement the organizations goals and mission
and on the strategy of how to achieve them.
Effectiveness requires that an organisations culture, strategy, environment and technology
be aligned with the organisations goals. The stronger an orgs culture, the more important it
is that culture be appropriate with other variables.
Good external fit: its culture will conform to its strategy and environment.
EG: market-driven strategies should be more appropriate in dynamic environments and will
require a culture that emphasises individual initiatives, risk-taking, high integration, tolerance
of conflicts and high horizontal communication.
Product-driven strategy focus on efficiency, work best in stable environments, and are
more likely to be successful when the organizations culture is high in control, minimises risk
and conflict and emphasises conformance to standards.
Good internal control: with their culture properly matched to their technology.
As for stable environment: perform routine (stability ), eg: airline
for dynamic: non-routine tech
environments are rarely stable, techonology and action are constantly changing.
Since organisations culture influences its ability to adapt to these changes. Hence, change
overtime.
Founder have a major impact on establishing early culture. Since they have a vision or mission as to what
the organisation should be (bias). The orgs culture results from the interaction b/w founders biases and
assumptions and what the original members employ learn from experiences.
Selection"
Identify and hire individuals who have the knowledge to successfully perform the jobs(important: who fits
better)and select out those who undermine and attack core valud. As for employee, once cannot be
compatible. They can withdraw, so both of them could withdraw if mismatch.
Leadership" = culture carriers
Guides to what behaviour is acceptable and how problems of org should be approached.
Socialization"
Help new to adapt.eg: induction courses
Rewards and punishments"
Channel and direct behaviour.
To improve organizational effectiveness"
DIFFERENTIATIONIST THEORY
Martin et al argues that an organization is characterized by a differentiationist culture when it
comprises a
Organization is a cluster of sub-cultures related to particular challenge, task, responsibility of a unit or
group"
Consensus is found not at organizational level but in sub-cultures"
Relations among sub-cultures can be complementary, conflicting or independent"
Boundary between inside and outside is permeable
"power has to be exercised to influence outcomes " can be positive or negative connotations "
since Multiple decision makers with different backgrounds, interests, and goals. " , would result
Differences of opinion regarding problems and solutions." Conflicts then arise among these groups
as they pursue different interests, goals, solutions" . It is inevitable and sometimes even
Bachrach and Baratz state: control the participants in (when ppl threaten power-holders,
they can be kept out of the decision arena) and agenda(whencertain issues threaten powerholders, they can be kept out of arena) of those processes. The use of it is called nondecision making. He also states power relationship exist there must be a conflict of
interst or values).
Eg: A want B to do sth, B do not want to do
So b refuse. Resistence is indirectly confronted by A. so A could continue making
decisions.
Managers could use second dimension to bring abt changes in organisations. Such as
change d-m process, reporting relationship, allocation of responsibility.
The second and first dimension converge: both focus on the exercise of power in or around
the decision-making as part of a deliberate strategy to achieve intended outcomes.
Difference: first is directly confronted, second is sidelined, so less visable.
For both of them, power refers to the ability to secure preferred outcomes in the face of
conflict among declared opponents.
So power can be used to secure preferred outcomes by preventing conflict from arising.
Lecture 11 strategy
1 Porter: five forces
2 Porter: competitive strategies
3 Miles& Snow: strategic types
4 Mintzberg planned vs emergent strategy
b. differentiation, need to be unique in its industry valued by buyers, price inelastic, to sell more
expensive since its value is enough to do so
c. focus, management choses narrow market segments for specific nees, and then adjusts strategy
to meet it. So hard to substitue
Analyzers:organization whose strategy is to move into new products or markets only after their
viability has been proven
1Analyzers attempt to minismise risk by adopting innovations after they have been proven by
others.
2 sits between an defender and prospector
3 try to capitalise on the best of both of the preceding types: operate in two types of product-market
domains, one relatively stable, the other changing. In stable areas: it operates routinley and
efficiently through use of formalized strctures and processes, to look for conformance
In turbulent areas: top managers watch their competitors closedly for new ideas, and then rapidly
adopt those who appear to be the most promising.
4 it not the leader of change, only go when certain
5 growth normally occurs a, market penetration, b product and market development
6 they live by imitations. successful copy others ideas (imitaion) through broad market surveillence
Eg: coles, prospected from Big W
Reactor: residual strategy that organizations follow inconsistent and unstable patterns
1 respond inappropriately, perform poorly
2 problem: reluctant to commit themselves aggressively to a specific strategy in the future
3 cause: top management failed to make strategy clear, may not fully shape strcture to fit the
chosen strategy
4 result: fail to follow up with the changes and challenges in the environment, ---decline or
extinction
7s framework:structure and strategy need to be aligned and structure cannot stand on its own and
aligned with other 6S. 1 superordinate goals, style(culture), staff, skills, systems, and strategy.