Transcript Chapter 1

Chapter 1
What is Organizational
Behavior?
McGraw-Hill/Irwin
Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
Learning Goals
 What is the definition of “organizational behavior”?
 What are the two primary outcomes in studies of
organizational behavior? What factors affect those two
primary outcomes?
 Do firms that are good at organizational behavior tend to
be more profitable? Why might that be, and is there any
research evidence to support this tendency?
 What is theory, and what is its role in the scientific
method?
 What does a “correlation” represent, and what are “big”,
“moderate”, and “small” correlations? What is a metaanalysis?
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Discussion Question
 Think of the worst coworker you've ever
had. What did that person do that was so
bad?
 Think of the best coworker you've ever
had. What did that person do that was so
good?
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Table 1-1
The Best of Coworkers, the Worst
of Coworkers
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Basic Elements of Organizational
Behavior
 Organizational behavior (OB) is the field of
study devoted to understanding, explaining, and
ultimately improving the attitudes and behaviors
of individuals and groups in organizations.
 Human resource management takes the
theories and principles studies in OB and
explores the “nuts and bolts” applications of
those principles in organizations.
 Strategic management focuses on the product
choices and industry characteristics that affect
an organization's profitability.
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OB Foundations
 Theories and concepts in OB are drawn
from a wide variety of disciplines
Industrial and organizational psychology
Job performance and individual characteristics
Social psychology
Satisfaction, emotions, and team processes
Sociology
Team characteristics and organizational structure
Economics
Motivation, learning, and decision making
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Integrative Model of Organizational
Behavior
 Individual Outcomes
Job performance
Organizational commitment
 Individual Mechanisms
Job satisfaction
Stress
Motivation
Trust, justice, and ethics
Learning and decision making
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Integrative Model of Organizational
Behavior, cont’d
 Individual Characteristics
 Personality and cultural values
 Ability
 Group Mechanisms
 Team characteristics
 Team processes
 Leader power and influence
 Leader styles and behaviors
 Organizational Mechanisms
 Organizational structure
 Organizational culture
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Figure 1-1
Integrative Model of OB
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Does Organizational Behavior Matter?
 Resource-based view
Financial resources (revenue, equity)
Physical resources (buildings, machines)
Knowledge, decision-making, culture
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Discussion Question
 Is it really the people that make some
companies more profitable than
others?
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What Makes a Resource Valuable?
 Rare
 Resources, people
 Inimitable
 History
A collective pool of experience, wisdom,
and knowledge that benefits the organization
 Numerous small decisions
People make many small decisions day-in and day-out,
week-in and week-out
 Socially complex resources
Culture, teamwork, trust
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Figure 1-2
What Makes a Resource Valuable?
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Research Evidence
 OB practices were associated with better firm
performance
 Firms who valued OB had a 19% higher survival
rate than firms who did not value OB
 Good people comprise a valuable resource for
companies
 There is no “magic bullet” OB practice – one thing
that, in-and-of itself, can increase profitability
 Rule of one-eighth
 OB on Screen
Office Space
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How Do We Know
 Method of Experience – People hold firmly to some
belief because it is consistent with their own experience
and observations.
 Method of Intuition – People hold firmly to some belief
because it “just stands to reason”—it seems obvious or
self-evident.
 Method of Authority – People hold firmly to some belief
because some respected official, agency, or source has
said it is so.
 Method of Science – People accept some belief
because scientific studies have tended to replicate that
result using a series of samples, settings, and methods.
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Scientific Studies
 Theory
 a collection of assertions—both
verbal and symbolic—that specifies
how and why variables are related,
as well as the conditions under which
they should (and should not) be
related
 tells a story—supplying the familiar
who, what, where, when, and why
elements found in any newspaper or
magazine article
 Hypotheses
 written predictions that specify
relationships between variables
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Figure 1-3
The Scientific Method
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Scientific Studies, cont’d
 Correlation (r)
Describes the statistical relationship between
two variables
Can be positive or negative and range from 0
(no statistical relationship) to ± 1 (a perfect
statistical relationship)
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Figure 1-4
Different Correlation Sizes
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Figure 1-4
Different Correlation Sizes
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Figure 1-4
Different Correlation Sizes
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Social Recognition & Job Performance
 How often does social recognition lead to higher
job performance?
 Burger King study
 Correlation between social recognition
and job performance was .28
Restaurants that received training in social
recognition averaged 44 seconds of drivethrough time nine months later versus 62
seconds for the control group locations.
 Correlation between social recognition and retention
rates was .20
Restaurants that received training in social recognition had a
16 percent better retention rate than the control group
locations nine months later.
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Table 1-4
Notable Correlations
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Meta-analysis
 The best way to test a theory is to conduct many
studies, each of which is as different as possible
from the ones that preceded it.
 Meta-analysis takes all of the correlations found
in studies of a particular relationship and
calculates a weighted average (such that
correlations based on studies with large samples
are weighted more than correlations based on
studies with small samples).
 .50 correlation is considered “strong,” a .30
correlation is considered “moderate,” and a .10
correlation is considered “weak.”
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Takeaways
 Organizational behavior is a field of study
devoted to understanding and explaining the
attitudes and behaviors of individuals and
groups in organizations. It focuses on why
individuals and groups in organizations act the
way they do.
 The two primary outcomes - job performance
and organizational commitment.
 A number of factors affect performance and
commitment, including individual mechanisms,
individual characteristics, group mechanisms, and
organizational mechanisms.
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Takeaways, Cont’d
 The effective management of organizational
behavior can help a company become more
profitable because good people are a valuable
resource.
 Rare
 Hard to imitate
 History that cannot be bought or copied,
 Make numerous small decisions that cannot be
observed by competitors
 Create socially complex resources such as culture,
teamwork, trust, and reputation.
 Good OB policies have been linked to employee
productivity, firm profitability, and even firm survival.
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Takeaways, Cont’d
 A theory is a collection of assertions, both verbal
and symbolic, that specifies how and why
variables are related, as well as the conditions in
which they should (and should not) be related.
 A correlation is a statistic that expresses the
strength of a relationship between two variables
(ranging from 0 to 1).
 A meta-analysis summarizes the results of several
research studies. It takes the correlations from those
research studies and calculates a weighted average to
give more weight to studies with larger samples.
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