Posted: June 6th, 2022

Unit 4 Organizational Structure Critique

ATTACHED FILE(S)
1000w and 4 reference including the textbook.
Unit 4 Organizational Structure Critique.
Using the organization that you work for or one that you are familiar with –
1. Critique the organizational structure.
2. What works? What doesn’t work?
3. If you could start over how would you structure the organization? Why?
4. Speak on another organizational structure that you are familiar with.
5. What impact does the structure of an organization has on its ability to carry out its mission?
Responses need to address all components of the question, demonstrate critical thinking and analysis, and include peer reviewed journal evidence to support the student’s position.
Please be sure to validate your opinions and ideas with citations and references in APA format.
Information on the organization I work for.
Palliative Care and the Community
Palliative care is unique among medical specialties, in that it does not delineate between inpatient and outpatient plans of care. Instead, community-based palliative care can be ongoing for months, if not years, and does not have be mutually linked with end-of-life or hospice care.
Community based palliative care is a non hospital or hospice based care plan provided through clinics, nursing and other assisted care facilities, and in private homes. Patients remain connected with the community in which they most comfortably live, move, and have their being.
How to Access Community Based Palliative Care
palliative care community
Community based palliative care providers are often willing and able to come directly to the patient for evaluations, care, and to provide medication and some treatments.
Patients are often referred for community based palliative care via physicians (primary or specialty care) who note the pain that may be associated with specific conditions or symptoms, as well as those who are clearly suffering from unnecessary and chronic pain. Nursing and other assisted or skilled care facilities also frequently have relationships with community based palliative care, which can lead to referrals.
Hospitalists may also note a patient’s history of multiple inpatient stays and recognize that a patient may suffer fewer hospital admissions if pain were managed on-site at home or in a residential care facility. Sometimes, providing pain management care at home can become the bridge for patients who find car rides or other transportation to clinic and other health maintenance visits uncomfortable, if not impossible at times. Community based palliative care providers are often willing and able to come directly to the patient for evaluations, care, and to provide medication and some treatments.
Once a patient has been identified for referral, a member of the palliative care team will be in contact with the patient or their representative to offer general information about community based palliative care services and to document helpful information about the patient’s needs. This is the time to discuss hopes and expectations and to ask any relevant questions. Then, a team member will either visit the patient where he is she is located, whether that is at home, a residential care facility, or in the hospital to assess wellness and care related needs.
The palliative care provider will then connect with the patient’s medical team to be sure that the plan of care is coherent and helpful to the long term treatment plan, then with the patient and his or her family to clarify expectations and to be sure that the plan of care matches the patient’s overall goals and values. Finally, the care plan is enacted and adjusted as needed both for patient comfort and as the patient’s needs changes.
What Kinds of Care will Community Based Palliative Care Offer?
Community-based palliative care is also not solely a matter of receiving a course of prescription drug treatment. Instead, this type of care can be understood as the comprehensive involvement of a community that centers on prevention of suffering through both immediate pain management and symptom anticipation. Family members and other loved ones, medical teams members, therapists, and spiritual care providers all participate to best address a patient’s pain in concert with a patient’s values, goals, beliefs, and preferences.
Community based palliative care is of utmost importance in that this type of care continues to blur the lines between sick and well, busy and infirm. Patients can remain in the place where they are best cared for and connected with their community. In short, patients can remain both “good” and “busy,” as can the providers who seek to manage their pain. Everybody stays connected, which only promotes the greatest possible vitality of body, mind, and spirit in any and all circumstances.
This page intentionally left blank
organizational
behavior
Hitt_FM.indd iHitt_FM.indd i 8/17/10 2:48 PM8/17/10 2:48 PM
This page intentionally left blank
organizational
behavior
MICHAEL A. HITT
Texas A&M University
C. CHET MILLER
University of Houston
ADRIENNE COLELLA
Tulane University
third edition
John Wiley & Sons, Inc.
Hitt_FM.indd iiiHitt_FM.indd iii 8/17/10 2:48 PM8/17/10 2:48 PM
Vice President & Publisher George Hoffmann
Executive Editor Lise Johnson
Assistant Editor Sarah Vernon
MarketingManager Karolina Zarychta
Assistant Marketing Manager Laura Finely
Production Manager Dorothy Sinclair
Production Editor Sandra Dumas
Creative Director Harry Nolan
Interior Designer Lucia Tirondola
Cover Design Howard Grossman
Executive Media Editor Allison Morris
Associate Media Editor Elena Santa Maria
Photo Department Manager Hilary Newman
Photo Editor Jennifer MacMillan
Photo Researcher Lisa Passmore
Production Management Services MPS Limited, a Macmillan Company
This book was typeset in 10/12 Sabon Regular at MPS and printed and bound by Quad/Graphics Versailles. The cover was
printed by Quad/Graphics Versailles.
The paper in this book was manufactured by a mill whose forest management programs include sustained yield-harvesting
of its timberlands. Sustained yield harvesting principles ensure that the number of trees cut each year does not exceed the
amount of new growth.
This book is printed on acid-free paper.
Founded in 1807, John Wiley & Sons, Inc. has been a valued source of knowledge and understanding for more than
200 years, helping people around the world meet their needs and fulfi ll their aspirations. Our company is built on a
foundation of principles that include responsibility to the communities we serve and where we live and work. In 2008,
we launched a Corporate Citizenship Initiative, a global effort to address the environmental, social, economic, and
ethical challenges we face in our business. Among the issues we are addressing are carbon impact, paper specifi cations and
procurement, ethical conduct within our business and among our vendors, and community and charitable support. For
more information, please visit our website: www.wiley.com/go/citizenship.
Copyright © 2011, 2009, 2006 by John Wiley & Sons, Inc. All rights reserved.
No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means,
electronic, mechanical, photocopying recording, scanning or otherwise, except as permitted under Sections 107 or 108
of the 1976 United States Copyright Act, without either the prior written permission of the Publisher or authorization
through payment of the appropriate per-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers,
MA 01923, (978) 750-8400, fax (978) 646-8600. Requests to the Publisher for permission should be addressed to the
Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ07030-5774, (201) 748-6011, fax
(201) 748-6008.
Evaluation copies are provided to qualifi ed academics and professionals for review purposes only, for use in their courses
during the next academic year.These copies are licensed and may not be sold or transferred to a third party.Upon
completion of the review period, please return the evaluation copy to Wiley.Return instructions and a free of charge
return shipping label are available at www.wiley.com/go/returnlabel. Outside of the United States, please contact your local
representative.
ISBN 13978-0470-52853-2
ISBN 13978-0470-92090-9
Printed in the United States of America.
10 9 8 7 6 5 4 3 2 1
Hitt_FM.indd ivHitt_FM.indd iv 8/19/10 9:45 AM8/19/10 9:45 AM
www.wiley.com/go/citizenship
www.wiley.com/go/returnlabel
To Aunt Jinny
for all of the love and support
you have given us over the years.
We are blessed to have you
in our lives
—MIKE
To Laura Cardinal,
who keeps the smiles
and joy coming.
I am indeed looking forward
to our next chapter together.
—CHET
To Jessica and Rebecca.
You make me proud
and you make me smile.
—ADRIENNE
Hitt_FM.indd vHitt_FM.indd v 8/17/10 2:48 PM8/17/10 2:48 PM
This page intentionally left blank
about the authors
Michael A. Hitt
Texas A & M University
Michael Hitt is currently a Distinguished Professor of Management at Texas A&M Univer-
sity and holds the Joe B. Foster Chair in Business Leadership. He received his Ph.D. from
the University of Colorado. Dr. Hitt has coauthored or co-edited 26 books andauthored
or coauthored many journal articles. A recent article listed him as one of the ten most cited
authors in management over a 25-year period. The Times Higher Education listed him among
the top scholars in economics, fi nance and management and tied for fi rst among manage-
ment scholars with the highest number of highly cited articles. He has served on the edito-
rial review boards of multiple journals and is a former editor of the Academy of Management
Journal. He is the current co-editor of the Strategic Entrepreneurship Journal. He received the
1996 Award for Outstanding Academic Contributions to Competitiveness and the 1999
Award for Outstanding Intellectual Contributions to Competitiveness Research from the
American Society for Competitiveness. He is a Fellow in the Academy of Management and
in the Strategic Management Society, a Research Fellow in the National Entrepreneurship
Consortium and received an honorary doctorate from the Universidad Carlos III de Madrid
for his contributions to the fi eld. He is a former President of the Academy of Management,
a Past President of the Strategic Management Society and a member of the Academy of
Management Journals’ Hall of Fame. He received awards for the best article published in the
Academy of Management Executive (1999), Academy of Management Journal (2000), and the
Journal of Management (2006). In 2001, he received the Irwin Outstanding Educator Award
and the Distinguished Service Award from the Academy of Management. In 2004, Dr. Hitt
was awarded the Best Paper Prize by the Strategic Management Society. In 2006, he received
the Falcone Distinguished Entrepreneurship Scholar Award from SyracuseUniversity.
C. Chet Miller
University of Houston
Dr. C. Chet Miller is the Bauer Professor of Organizational Studies at the Bauer School
of Business, University of Houston. He received his Ph.D. from the University of Texas at
Austin. He also received his B.A. from the University of Texas, where he was a member of
Phi Beta Kappa and a Summa Cum Laude graduate.
Since working as a shift manager and subsequently completing his graduate studies,
Dr. Miller has served on the faculties of Baylor University, Wake Forest University, and the
University of Houston. He also has been a visiting faculty member at Cornell University
and a guest instructor at Duke University. He is an active member of the Academy of
Hitt_FM.indd viiHitt_FM.indd vii 8/17/10 2:48 PM8/17/10 2:48 PM
viii About the Authors
Management and the Strategic Management Society. He currently serves on the editorial
boards of Organization Science and Academy of Management Journal, and is a past associ-
ate editor of Academy of Management Journal. Awards and honors include an outstanding
young researcher award, nominations of several papers for honors, and teaching awards
from multiple schools,
Dr. Miller has worked with a number of managers and executives. Through
management-development programs, he has contributed to the development of individuals
from such organizations as ABB, Bank of America, Krispy Kreme, La Farge, Red Hat, State
Farm Insurance, and the U.S. Postal Service. His focus has been change management, strate-
gic visioning, and high-involvement approaches to managing people.
Dr. Miller’s published research focuses on the functioning of executive teams, the
design of organizational structures and management systems, and the design of strategic
decision processes. His publications have appeared in Organization Science, Academy of
Management Journal, Academy of Management Executive, Strategic Management Journal,
Journal of Organizational Behavior, and Journal of Behavioral Decision Making.
Dr. Miller teaches courses in the areas of organizational behavior, organization theory,
and strategic management.
Adrienne Colella
Tulane University
Dr. Adrienne Colella is the A.B. Freeman Professor of Doctoral Studies and Research at
the A.B. Freeman School of Business at Tulane University. She has also been a faculty
member at the Mays Business School, Texas A&M University and at Rutgers University.
She received her Ph.D. and Masters degree from the Ohio State University in Industrial/
Organizational Psychology and her B.S. degree from Miami University. Dr. Colella is
a fellow of the American Psychological Association and the Society for Industrial and
Organizational Psychology, Division 14 of the APA. She will be the President of the Soci-
ety of Industrial and Organizational Psychology in 2011.
Dr. Colella’s main research focuses on treatment issues regarding persons with dis-
abilities in the workplace and workplace accommodation. She has also published on a va-
riety of other organizational behavior and human resources topics such as discrimination,
pay secrecy, performance appraisal, motivation, socialization, and employee selection.
Her research appears in the Journal of Applied Psychology, Personnel Psychology, Academy
of Management Journal, Academy of Management Review, Research in Personnel and Hu-
man Resource Management, Human Resource Management Review, Journal ofApplied Social
Psychology, and the Journal of Occupational Rehabilitation, among other places. She is the
editor of a Society of Industrial and Organizational Psychology Frontiers Series book on
the psychology of workplace discrimination. Dr. Colella serves (or has served) on the
editorial boards of Personnel Psychology, Journal of Applied Psychology, Academy of Manage-
ment Journal, Journal of Organizational Behavior, Human Resource Management Review,
Human Performance, SIOP Frontier’s Series, Human Resource Management, and Journal of
Management. She is an ad hoc reviewer for most other journals in the management fi eld
and federal funding agencies. Her research has been funded by a variety of national, state,
and university sources.
Dr. Colella teaches undergraduate, masters-level, and Ph.D. level courses in Human
Resource Management and Organizational Behavior.
Hitt_FM.indd viiiHitt_FM.indd viii 8/17/10 2:48 PM8/17/10 2:48 PM
Preface xix
brief contents
O P E N I N GC A S ES T U D Y Whole Foods, Whole People 1
PART IIIGroups, Teams, and Social Processes
8Leadership 289
9Communication 327
10 Decision Making by Individuals and Groups 362
11 Groups and Teams 402
12Confl ict, Negotiation, Power, and Politics 436
PART IV The Organizational Context
13 Organizational Structure and Culture 485
14 Organizational Change and Development 528
PART I The Strategic Lens
1 A Strategic Approach to Organizational Behavior 11
2 Organizational Diversity 47
3Organizational Behavior in a Global Context 83
PA R TIC A S ES T U D Y Cooperating and Communicating 121
Across Cultures
PA R TI I IC A S ES T U D Y Bright and Dedicated: What473
More Do You Want?
PA R TI VC A S ES T U D Y A Sea Change in Staffi ng at Leapfrog567
Innovations, Inc.
PA R TI IC A S ES T U D Y Brussels and Bradshaw 277
PART II Individual Processes
4Learning and Perception 131
5Personality, Intelligence, Attitudes, and Emotions 167
6Work Motivation 208
7 Stress and Well-being246
C O N C L U D I N GC A S ES T U D Y Centurion Media: Doing the Right Thing579
Hitt_FM.indd ixHitt_FM.indd ix 8/17/10 2:48 PM8/17/10 2:48 PM
This page intentionally left blank
Preface xix Evidence for the Effectiveness of
High-Involvement Management 29
Demands on Managers 30
Organization of the Book 31
Experiencing Organizational Behavior:
Pixar: An Organization of Happy, Innovative People 32
What This Chapter Adds to Your
Knowledge Portfolio 33
Back to the Knowledge Objectives 34
Key Terms 35
Human Resource Management Applications 35
Building Your Human Capital:
Career Style Inventory 35
An Organizational Behavior Moment:
All in a Day’s Work 41
Team Exercise:
Mcdonald’s: A High-Involvement Organization? 42
Endnotes 43
2 Organizational Diversity 47
Exploring Behavior in Action:
Diversity in the Los Angeles Fire Department 47
The Strategic Importance of Organizational
Diversity 49
Diversity Defi ned 50
Forces of Change 52
Changing Population Demographics 52
Increase in the Service Economy 53
The Global Economy 54
Requirements for Teamwork 54
Diversity Management and
High-Involvement Organizations 55
Individual Outcomes 55
Group Outcomes 56
Organizational Outcomes 57
Societal and Moral Outcomes 58
Experiencing Organizational Behavior:
Diversity at The Top 59
contents
O P E N I N GC A S ES T U D Y
Whole Foods, Whole People 1
PART I The Strategic Lens
1 A Strategic Approach to
Organizational Behavior 11
Exploring Behavior in Action:
Strategic Use of Human Capital:
A Key Element of Organizational Success11
The Strategic Importance of Organizational Behavior 13
Basic Elements of Organizational Behavior 13
The Importance of Using a Strategic Lens 14
Foundations of a Strategic Approach to
Organizational Behavior 16
Defi nition of an Organization 17
Experiencing Organizational Behavior:
Creating Innovation: Leading and Managing
the Human Capital at Apple 18
The Role of Human Capital in Creating Competitive
Advantage 19
The Nature of Human Capital 19
The Concept of Competitive Advantage 20
Human Capital as a Source of
Competitive Advantage 21
Managerial Advice:
Leveraging Human Capital with Twitter and Other Social
Networking Tools: Managing the Tweets 24
Positive Organizational Behavior 25
High-Involvement Management 26
Key Characteristics of High-Involvement
Management 26
Selective Hiring 26
Extensive Training 27
Decision Power 28
Information Sharing 28
Incentive Compensation 29
Hitt_FM.indd xiHitt_FM.indd xi 8/17/10 2:48 PM8/17/10 2:48 PM
xii Contents
Roadblocks to Diversity 60
Prejudice and Discrimination 61
Stereotyping 62
Experiencing Organizational Behavior:
Women, Work, and Stereotypes 64
Differences in Social Identity 65
Power Differentials 66
Poor Structural Integration 67
Communication Problems 69
Effectively Creating and Managing Diversity 69
Commitment of the Organization’s Leaders 70
Integration with the Strategic Plan 70
Associate Involvement 70
Managerial Advice:
Promoting a Positive Diversity Environment 71
The Strategic Lens 72
What This Chapter Adds to Your Knowledge Portfolio 73
Back to the Knowledge Objectives 73
Thinking about Ethics 74
Key Terms 74
Human Resource Management Applications 75
Building Your Human Capital:
What’s Your DQ (Diversity Quotient)? 75
An Organizational Behavior Moment:
Project “Blow Up” 76
Team Exercise:
What Is It Like to Be Different? 78
Endnotes 79
3 Organizational Behavior in a Global
Context 83
Exploring Behavior in Action:
McDonald’s Thinks Globally and Acts Locally 83
The Strategic Importance of Organizational Behavior in
a Global Context 85
Forces of Globalization 85
Managerial Advice:
Multinational Corporations Achieving Glocalization 88
The Globalization Experience for Associates and
Managers 89
Internationally Focused Jobs 89
Foreign Job Assignments 91
Experiencing Organizational Behavior:
The Glass Ceiling, the Glass Floor, and the Glass
Border: The Global Business Environment for Women 94
Foreign Nationals as Colleagues 95
Opportunities for International Participation 97
Multidomestic Firms 98
Global Firms 98
Transnational Firms 99
High-Involvement Management in the
International Context 100
Dimensions of National Culture 100
Experiencing Organizational Behavior:
Managing Diverse Cultures 103
National Culture and High-Involvement
Management 104
Ethics in the International Context 106
The Strategic Lens 109
What This Chapter Adds to Your
Knowledge Portfolio 109
Back to the Knowledge Objectives 110
Thinking about Ethics 111
Key Terms 111
Human Resource Management Applications 112
Building Your Human Capital:
Assessment of Openness for International Work 112
An Organizational Behavior Moment:
Managing in a Foreign Land 114
Team Exercise:
International Etiquette 114
Endnotes 115
PART II Individual Processes
4 Learning and Perception 131
Exploring Behavior in Action:
The Strategic Importance of Learning and
Perception 131
Fundamental Learning Principles 133
Operant Conditioning and Social Learning
Theory 134
Contingencies of Reinforcement 134
Managerial Advice:
Punishment Taken Too Far 137
Schedules of Reinforcement 138
Social Learning Theory 139
PA R TIC A S ES T U D Y
Cooperating and Communicating
Across Cultures 121
Hitt_FM.indd xiiHitt_FM.indd xii 8/17/10 2:48 PM8/17/10 2:48 PM
Contents xiii
Cognitive and Motivational Properties of Personality 176
Some Cautionary and Concluding Remarks 179
Experiencing Organizational Behavior:
“I Have Ketchup in My Veins” 180
Intelligence 181
Attitudes 182
Experiencing Organizational Behavior:
Intelligence and Intelligence Testing in the National
Football League 183
Attitude Formation 185
Two Important Attitudes in the Workplace 187
Attitude Change 189
Managerial Advice:
Job Satisfaction Takes a Dive! 192
Emotions 193
Direct Effects of Emotions on Behavior 194
Emotional Labor 195
Emotional Intelligence 195
The Strategic Lens 196
What This Chapter Adds to Your
Knowledge Portfolio 197
Back to the Knowledge Objectives 198
Thinking about Ethics 199
Key Terms 199
Human Resource Management Applications 199
Building Your Human Capital:
Big Five Personality Assessment 200
An Organizational Behavior Moment:
Whatever Is Necessary! 202
Team Exercise:
Experiencing Emotional Labor 202
Endnotes 203
6 Work Motivation 208
Exploring Behavior in Action:
Work Motivation at W.L. Gore & Associates 208
The Strategic Importance of Work Motivation 210
What Is Motivation? 210
Content Theories of Motivation 211
Hierarchy of Needs Theory 211
ERG Theory 213
Theory of Achievement, Affi liation, and Power 215
Managerial Advice:
Managers over the Edge 217
Two-Factor Theory 218
Conclusions Regarding Content Theories 219
Other Conditions for Learning 141
Training and Enhancing the
Performance of Associates 141
OB Mod 142
Simulations 144
Learning From Failure 146
Experiencing Organizational Behavior:
“We are Ladies and Gentlemen Serving Ladies and
Gentlemen” 147
Perception 148
Perceptions of People 149
Self-Perception 153
Attributions of Causality 153
Experiencing Organizational Behavior:
Great Bear Wilderness Crash 154
Task Perception 157
The Strategic Lens 157
What This Chapter Adds to Your
Knowledge Portfolio 158
Back to the Knowledge Objectives 159
Thinking about Ethics 159
Key Terms 160
Human Resource Management Applications 160
Building Your Human Capital:
Assessment of Approaches Used to Handle Diffi cult
Learning Situations 160
An Organizational Behavior Moment:
It’s Just a Matter of Timing 161
Team Exercise:
Best Bet for Training 162
Endnotes 163
5 Personality, Intelligence, Attitudes,
and Emotions 167
Exploring Behavior in Action:
I Know She’s Smart and Accomplished . . .
But Does She Have “Personality”? 167
The Strategic Importance of Personality, Intelligence,
Attitudes, and Emotions 169
Fundamentals of Personality 170
Determinants of Personality Development 170
The Big Five Personality Traits 172
The Big Five as a Tool for Selecting New Associates
and Managers 175
The Big Five and High-Involvement Management 175
Hitt_FM.indd xiiiHitt_FM.indd xiii 8/17/10 2:48 PM8/17/10 2:48 PM
xiv Contents
Process Theories of Motivation 219
Expectancy Theory 219
Equity Theory 222
Goal-Setting Theory 224
Goal Specifi city 225
Goal Commitment 225
Experiencing Organizational Behavior:
Making Visible Changes 227
Conclusions Regarding Process Theories 228
Motivating Associates: An Integration of Motivation
Theories 229
Find Meaningful Individual Rewards 229
Tie Rewards to Performance 230
Redesign Jobs 232
Provide Feedback 234
Experiencing Organizational Behavior:
Connecting People in the Workplace 235
Clarify Expectations and Goals 236
The Strategic Lens 236
What This Chapter Adds to Your Knowledge
Portfolio 237
Back to the Knowledge Objectives 237
Thinking about Ethics 238
Key Terms 239
Human Resource Management Applications 239
Building Your Human Capital:
Assessing Your Needs 239
An Organizational Behavior Moment:
The Motivation of a Rhodes Scholar 240
Team Exercise:
Workplace Needs and Gender 241
Endnotes 242
7 Stress And Well-Being 246
Exploring Behavior in Action:
Striking For Stress at Verizon 246
The Strategic Importance of Workplace Stress 248
Workplace Stress Defi ned 249
Two Models of Workplace Stress 251
Demand–Control Model 251
Effort–Reward Imbalance Model 252
Organizational and Work-Related Stressors 253
Role Confl ict 253
Role Ambiguity 254
Work Overload 254
Managerial Advice:
Restoring and Maintaining Work–Life Balance 255
Occupation 256
Resource Inadequacy 256
Working Conditions 256
Management Style 257
Monitoring 257
Job Insecurity 257
Incivility in the Workplace 257
Experiencing Organizational Behavior:
Incivility on the Job: The Cost of Being Nasty 258
Individual Infl uences on Experiencing
Stress 259
Type A versus Type B Personality 259
Self-Esteem 259
Hardiness 259
Gender 260
Individual and Organizational
Consequences of Stress 260
Individual Consequences 260
Organizational Consequences 263
Managing Workplace Stress 264
Individual Stress Management 264
Organizational Stress Management 265
Experiencing Organizational Behavior:
Incentives for Participating in Wellness
Programs 267
The Strategic Lens 268
What This Chapter Adds to Your
Knowledge Portfolio 268
Back to the Knowledge Objectives 269
Thinking about Ethics 269
Key Terms 269
Human Resource Management Applications 270
Building Your Human Capital:
How Well Do You Handle Stress? 270
An Organizational Behavior Moment:
Friend or Associate? 271
Team Exercise:
Dealing with Stress 272
Endnotes 272
PA R TI IC A S ES T U D Y
Brussels and Bradshaw 277
Hitt_FM.indd xivHitt_FM.indd xiv 8/17/10 2:48 PM8/17/10 2:48 PM
Contents xv
PART III Groups, Teams, and Social
Processes
8 Leadership 289
Exploring Behavior in Action:
Maria Yee and the Green Furniture Revolution 289
The Strategic Importance of Leadership 291
The Nature of Leadership 292
Trait Theory of Leadership 292
Experiencing Organizational Behavior:
Reforming a Rotten Apple and an Evil City 294
Behavioral Theories of Leadership 296
University of Michigan Studies 296
Ohio State University Studies 297
Contingency Theories of Leadership 298
Fiedler’s Contingency Theory of Leadership
Effectiveness 298
The Path–Goal Leadership Theory 301
Managerial Advice:
Phil Jackson and Leadership Success 304
Conclusions Regarding Contingency
Theories 305
Transformational Leadership 305
Experiencing Organizational Behavior:
Ethical Leadership? Authentic Leadership! 309
Additional Topics of Current Relevance 308
Leader–Member Exchange 310
Servant Leadership 311
Gender Effects on Leadership 311
Global Differences in Leadership 313
The Strategic Lens 314
What This Chapter Adds to Your Knowledge
Portfolio 315
Back to the Knowledge Objectives 316
Thinking about Ethics 317
Key Terms 317
Human Resource Management Applications 317
Building Your Human Capital:
Are You a Transformational Leader? 318
An Organizational Behavior Moment:
The Two Presidents 320
Team Exercise:
Coping with People Problems 320
Endnotes 322
9 Communication 327
Exploring Behavior in Action:
IBM and Virtual Social Worlds 327
The Strategic Importance of
Communication 329
The Communication Process 330
Organizational Communication 331
Communication Networks 331
Direction of Organizational
Communication 333
Experiencing Organizational Behavior:
Communication at J. Crew: Mickey
Drexler 335
Interpersonal Communication 337
Formal versus Informal Communication 337
Communication Media 338
Communication Technology 339
Managerial Advice:
Surfi ng for Applicants 341
Nonverbal Communication 342
Barriers to Effective Communication 343
Organizational Barriers 343
Experiencing Organizational Behavior:
Communication Casualties 347
Individual Barriers 348
Overcoming Communication Barriers 350
Conduct Communication Audits 350
Improve Communication Climates 351
Encourage Individual Actions 351
The Strategic Lens 353
What This Chapter Adds to Your Knowledge
Portfolio 353
Back to the Knowledge Objectives 354
Thinking about Ethics 354
Key Terms 354
Human Resource Management Applications 355
Building Your Human Capital:
Presentation Dos and Don’ts 355
An Organizational Behavior Moment:
Going North 357
Team Exercise:
Communication Barriers 358
Endnotes 359
Hitt_FM.indd xvHitt_FM.indd xv 8/17/10 2:48 PM8/17/10 2:48 PM
xvi Contents
10 Decision Making by Individuals
and Groups 362
Exploring Behavior in Action:
Dawn Ostroff’s Decision Making at the
CW Television Network 362
The Strategic Importance of Decision Making 364
Fundamentals of Decision Making 364
Basic Steps in Decision Making 365
Optimal versus Satisfactory Decisions 366
Individual Decision Making 367
Decision-Making Styles 367
Managerial Advice:
Nurturing Alternative Decision Styles 371
Degree of Acceptable Risk 372
Cognitive Biases 373
Moods and Emotions 375
Experiencing Organizational Behavior:
Anger and Fear in Recent U.S. Elections 376
Group Decision Making 377
Group Decision-Making Pitfalls 378
Group Decision-Making Techniques 381
Who Should Decide? Individual Versus
Group Decision Making 384
Associate Involvement in Managerial
Decisions 385
Value of Individual versus Group Decision
Making 387
Experiencing Organizational Behavior:
The Vroom–Yetton Model and Military Decisionsduring
the U.S. Civil War 387
The Strategic Lens 391
What This Chapter Adds to Your
Knowledge Portfolio 390
Back to the Knowledge Objectives 392
Thinking about Ethics 393
Key Terms 394
Human Resource Management Applications 394
Building Your Human Capital:
Decision Style Assessment 394
An Organizational Behavior Moment:
Decision Making at a Nuclear Power Facility 395
Team Exercise:
Group Decision Making in Practice 397
Endnotes 397
11 Groups and Teams 402
Exploring Behavior in Action:
Teamwork at Starbucks 402
The Strategic Importance of Groups and Teams 404
The Nature of Groups and Teams 404
Groups and Teams Defi ned 405
Formal and Informal Groups 405
Identity Groups 406
Virtual Teams 406
Functional Teams 407
Self-Managing Teams 408
Experiencing Organizational Behavior:
Teams at Mckinsey & Company 409
Team Effectiveness 408
Knowledge Criteria 410
Affective Criteria 410
Outcome Criteria 410
Is the Team Needed? 410
Factors Affecting Team Effectiveness 411
Team Composition 411
Team Structure 414
Team Processes 417
Experiencing Organizational Behavior:
Backup at Cirque Du Soleil 418
Team Development 421
Managing for Effective Teams 423
Top Management Support 423
Support Systems 424
Managerial Advice:
The Pros and Cons of Experiential Teambuilding 426
The Strategic Lens 427
What This Chapter Adds to Your Knowledge
Portfolio 428
Back to the Knowledge Objectives 428
Thinking About Ethics 429
Key Terms 429
Human Resource Management Applications 429
Building Your Human Capital:
Do You Have a Team? 430
An Organizational Behavior Moment:
The New Quota 430
Team Exercise:
Virtual versus Real Teams 431
Endnotes 432
Hitt_FM.indd xviHitt_FM.indd xvi 8/17/10 2:48 PM8/17/10 2:48 PM
Contents xvii
12 Confl ict, Negotiation,
Power, and Politics 436
Exploring Behavior in Action:
Green Confl ict 436
The Strategic Importance of Confl ict, Negotiation,
Power, and Politics 438
The Nature of Confl ict 439
Dysfunctional and Functional Confl ict 439
Types of Confl ict 440
Causes of Confl ict 441
Structural Factors 441
Communication 443
Experiencing Organizational Behavior:
Herman Miller, Designing for Teamwork 444
Cognitive Factors 445
Individual Characteristics 445
History 446
Confl ict Escalation And Outcomes 447
Confl ict Escalation 447
Confl ict Outcomes 448
Experiencing Organizational Behavior:
Workplace Aggression 449
Responses to Confl ict 450
Negotiation 451
Negotiation Strategies 452
The Negotiation Process 452
Managerial Advice:
A Costly Confl ict Resolution:
The Importance of Negotiation 454
Power 456
Bases of Individual Power 456
An Example of Power 458
Strategic Contingencies Model of Power 459
Organizational Politics 460
The Strategic Lens 463
What This Chapter Adds to Your Knowledge
Portfolio 463
Back to the Knowledge Objectives 464
Thinking about Ethics 464
Key Terms 465
Human Resource Management Applications 465
Building Your Human Capital:
Are You Ready to Manage with Power? 465
An Organizational Behavior Moment:
The Making of the Brooklyn Bluebirds 466
Team Exercise:
Managing Confl ict 467
Endnotes 468
PART IV The Organizational Context
13 Organizational Structure and
Culture 485
Exploring Behavior in Action:
Growth and Structure Provide an Integrated
Portfolio of Services at Fedex 485
The Strategic Importance of Organizational Structure
and Culture 487
Fundamental Elements of Organizational Structure 488
Structural Characteristics 488
Structuring Characteristics 491
The Modern Organization 492
Factors Affecting Organizational Structure 493
The Role of Strategy 493
The Role of The Environment 495
Experiencing Organizational Behavior:
IDEO and the Differentiation Strategy 496
The Role of Technology 500
The Role of Organizational Size 501
Summary Comments on Structure 502
Organizational Culture 502
Experiencing Organizational Behavior:
Google Culture Attracts High-Quality
Associates 503
Competing Values Model of Culture 505
Cultural Socialization 507
Cultural Audits 508
Managerial Advice:
Finding a Fit at Home Depot 510
Person–Organization Fit 511
The Strategic Lens 513
What This Chapter Adds to Your
Knowledge Portfolio 514
Back to the Knowledge Objectives 515
PA R TI I IC A S ES T U D Y
Bright and Dedicated: What More Do You Want? 473
Hitt_FM.indd xviiHitt_FM.indd xvii 8/17/10 2:48 PM8/17/10 2:48 PM
xviii Contents
Thinking about Ethics 516
Key Terms 517
Human Resource Management Applications 517
Building Your Human Capital:
An Assessment of Creativity 517
An Organizational Behavior Moment:
How Effective is Hillwood Medical Center? 520
Team Exercise:
Words-in-Sentences Company 521
Endnotes 524
14 Organizational Change and
Development 528
Exploring Behavior in Action:
Reinventing the Dream at Starbucks 528
The Strategic Importance of Organizational Change
and Development 529
Pressures for Organizational Change 530
Internal Pressures for Change 530
External Pressures for Change 534
Managerial Advice:
Social Pressures for “Green” Policies and Practices:
The War against Carbon Emissions 537
Planned Change 539
Process of Planned Change 539
Unfreezing 540
Experiencing Organizational Behavior:
The Radical Transformation of Novartis 541
Important Tactical Choices 543
Resistance to Change 544
The DADA Syndrome 546
Experiencing Organizational Behavior:
Transforming Cisco into a Recession-Proof Growth
Machine547
Organization Development 548
The Basic OD Model 549
Organization Development Interventions 550
Organizational Learning 554
Organization Development across Cultures 555
The Strategic Lens 555
What This Chapter Adds to Your
Knowledge Portfolio 556
Back to the Knowledge Objectives 557
Thinking about Ethics 558
Key Terms 558
Human Resource Management Applications 558
Building Your Human Capital:
An Assessment of Low Tolerance for Change 558
An Organizational Behavior Moment:
Organization Development at KBTZ 560
Team Exercise:
Identifying Change Pressures and Their Effects561
Endnotes 562
Glossary589
Organization Index 599
Name Index 602
Subject Index 618
PA R TI VC A S ES T U D Y
A Sea Change in Staffi ng at Leapfrog
Innovations, Inc. 567
C O N C L U D I N GC A S ES T U D Y
Centurion Media: Doing the Right Thing. 579
Hitt_FM.indd xviiiHitt_FM.indd xviii 8/17/10 2:48 PM8/17/10 2:48 PM
preface
Afew years ago, the following statement appeared on the cover of Fast Company, “The best leaders know where all of the great companies start. It’s the people. …” Despite
all of the major technological advances made and the substantial increases in the power of
computers (both hardware and software) that allow us to perform many functions more
easily than in the past and to accomplish some tasks that we could not do in the past, all
of this activity is driven by people. People developed Apple’s iPod and iPad. People devel-
oped and implemented Twitter and Facebook. We communicate on cell phones and small
laptop computers developed by people. Our automobiles are serviced by people; at restau-
rants we eat food prepared by people; we enjoy college and professional sports played by
people. People are the drivers of organizations and make or break their success. Ed Breen,
CEO of Tyco suggests that ideas provided by people are the basis of winning competitive
battles because companies compete with their brains as well as their brawn. In support of
this argument, Anne Mulcahy, former chairman of the board and former CEO of Xerox
argues that people were the primary reason for Xerox’s turnaround in performance. They
attracted highly talented employees, motivated them and they were highly productive.1
Purpose
We wrote this book for several reasons. First, we wanted to communicate in an effective
way the knowledge of managing people in organizations. The book presents up-to-date
concepts of organizational behavior (OB) in a lively and easy-to-read manner. The book is
based on classic and cutting-edge research on the primary topic of each chapter. Second,
we wanted to emphasize the importance of people to the success of organizations. We do
so by communicating how managing people is critical to implementing an organization’s
strategy, gaining an advantage over competitors, and ensuring positive organizational per-
formance. This approach helps students to better understand the relevance of managing
people, allowing the student to integrate these concepts with knowledge gained in other
core business courses. To emphasize the importance of people, we use the term human
capital. People are important assets to organizations; application of their knowledge and
skills is necessary for organizations to accomplish their goals.
New to the Third Edition
A number of changes have been made to enrich the content of the book and to ensure
that it is up-to-date with current organizational behavior research and managerial practice.
For example, we have changed or updated all chapter opening cases (Exploring Behavior
in Action), and all major case examples in the content of the chapters (e.g., Experiencing
Organizational Behavior, Managerial Advice). The few that were not changed represent
xix
Hitt_FM.indd xixHitt_FM.indd xix 8/17/10 2:48 PM8/17/10 2:48 PM
xx Preface
classic examples (such as on the U.S. Civil War). Several of the major changes to the con-
tent are described below:
• New materials were added on the topic of fi rms gaining value from the
knowledge learned by expatriates (Chapter 3).
• New materials were added on ethics and corruption (Chapter 3).
• Critical information was added on attractiveness and weight bias in our
discussion of perception (Chapter 4).
• A new section focused on social dominance orientation as an individual
difference was incorporated (Chapter 5).
• A new section was added on subconscious goals, an area of leading-edge research
on goal setting (Chapter 6).
• Additional information was included on overload and job loss as important
stressors (Chapter 7).
• Our discussion of communication networks was substantially modifi ed and
updated (Chapter 9).
• Building on our discussion of moods and emotions in Chapter 5, an explanation
of how these characteristics of human functioning affect decision making was
added to Chapter 10.
• New material was added in the crucial areas of workplace aggression and violence
(Chapter 12).
• A new section was added on ambidextrous organizations, a topic of growing
importance in OB (Chapter 13).
• A new section on top management changes was incorporated, along with new
material on institutional changes and training (Chapter 14).
In addition to the above, a new section on Human Resource Management Applications
was added at the end of each chapter. These sections explain how individuals in the human
resource management function can use major OB concepts to more effectively manage
human capital in the organization (e.g., management development programs, compensa-
tion programs, selection processes).
By popular demand, we have brought back part-ending cases, an approach used in
the fi rst edition. We also have a case on ethics at the end of the book that can be used with
the content in several chapters throughout the book. The cases are completely new and
engaging.
We have added approximately 300 new references from the research literature and
many more from popular press articles on managerial practice. Although we have made
important revisions and updated materials to refl ect current managerial practice, we have
maintained all of the basic OB content that instructors found to be valuable and all of
the pedagogical approaches that supported students’ efforts to learn. Therefore, this third
edition represents continued improvement of a high-quality teaching and learning tool. It
continues to be written in an easy style and is user friendly, as were the fi rst two editions
of the book.
Value Provided by this Book
Managing OB involves acquiring, developing, managing, and applying the knowledge,
skills, and abilities of people. A strategic approach to OB rests on the premise that people
are the foundation for any fi rm’s competitive advantage. Providing exceptionally high
Hitt_FM.indd xxHitt_FM.indd xx 8/17/10 2:48 PM8/17/10 2:48 PM
Preface xxi
quality products and services, excellent customer service, best-in-class cost struc-
ture, and other advantages are based on the capabilities of the fi rm’s people, its
human capital. If organized and managed effectively, the knowledge and skills of
the people in the fi rm are the basis for gaining an advantage over competitors and
achieving long-term fi nancial success.
Individual, interpersonal, and organizational characteristics determine the
behavior and ultimately the value of an organization’s people. Factors such as in-
dividuals’ technical skills, personality characteristics, personal values, abilities to
learn, and abilities to be self-managing are important bases for the development
of organizational capabilities. At the interpersonal level, factors such as quality of
leadership, communication within and between groups, and confl ict within and
between groups are noteworthy in the organization’s ability to build important
capabilities and apply them to achieve its goals. Finally, at the organizational level,
the culture and policies of the fi rm are also among the most important factors, as
they infl uence whether the talents and positive predispositions of individuals are
effectively used. Thus, managing human capital is critical for an organization to
beat its competition and to perform effectively.
This book explains how to effectively manage behavior in organizations. In ad-
dition, we emphasize how effective behavioral management relates to organizational
performance. We link the specifi c behavioral topic(s) emphasized in each chapter to
organizational strategy and performance through explicit but concise discussions. We
also provide short cases and examples to highlight the relationships.
Therefore, we emphasize the importance of managing OB and its effect on the
outcomes of the organization. This is highly signifi cant because a number of orga-
nizations routinely mismanage their workforce. For example, some organizations
routinely implement major reductions in the workforce (layoffs, downsizing) when-
ever they experience performance problems. How does an organization increase its
effectiveness by laying off thousands of its employees? The answer is that it rarely does
so.2 Layoffs reduce costs but they also result in losses of signifi cant human capital and
valuable knowledge. These fi rms then suffer from diminished capabilities and their
performance decreases further. Research shows that fi rmsincreasing their workforce
during economic downturns enjoy much stronger performance when the economy
improves.3 These fi rms have the capabilities to take advantage of the improving
economy, whereas fi rms that downsized must rebuild their capabilities and are less
able to compete effectively. The fi rms listed annually in Fortune’s “100 Best Compa-
nies to Work for” are consistently among the highest performers in their industries
(e.g., Starbucks, Whole Foods Market, Marriott, American Express).
Concluding Remarks
The knowledge learned from a course in organizational behavior is important for
managers at all levels: top executives, middle managers, and lower-level managers.
While top executives may understand the strategic importance of managing hu-
man capital, middle and lower-level managers must also understand the linkage
between managing behavior effectively and the organization’s ability to formulate
and implement its strategy. Managers do not focus solely on individual behav-
ior. They also manage interpersonal, team, intergroup, and interorganizational
Hitt_FM.indd xxiHitt_FM.indd xxi 8/17/10 2:48 PM8/17/10 2:48 PM
exploring behavior in action
Diversity in the
Los Angeles Fire
Department
M
elissa Kelley had a rich background in fi refi ght-
ing. Early in life, she learned from her grandfa-
ther, who worked as a fi refi ghter. In college, she
learned through coursework as a fi re-science major. After
college, she spent fi ve years learning and honing her skills
as a fi refi ghter with the California Department of Forestry.
Armed with her experiences and passion for the work,
she joined the Los Angeles Fire Department in 2001. Al-
though aware of possible discrimination and harassment
against women in the department, she did not hesitate to
join when presented with the opportunity. In her words, “I
was willing to overlook … the dirty jokes, the porn, the …
mentality. … I just wanted to be part of the team.” To her,
only two simple rules applied: “Do not touch me. Do not
hurt me on purpose.”
c02.indd 47 10/08/10 1:30 PM
xxii Preface
relationships. Some refer to these relationships as “social capital.” The essence of managing
organizational behavior is the development and use of human capital and social capital.
Jack Welch, former CEO of GE, suggested that he and his management team used man-
agement concepts that energized armies of people allowing them to dream, dare, reach, and
stretch their talents in order to do things they never thought possible. This book presents con-
cepts that will help students to gain the knowledge needed to effectively manage behavior in
organizations. This, in turn, helps in the implementation of the organization’s strategy, affects
the organization’s productivity, allows the organization to gain advantages over its competitors,
and therefore contributes to the organization’s overall performance.
MAH
CCM
AJC
1 Hitt, M.A., Haynes, K.T., & Serpa, R. 2010. Strategic leadership for the twenty-fi rst century. Business
Horizons, in press.
2 Krishnan, H., Hitt, M.A., & Park, D. 2007. Acquisition premiums, subsequent workplace reductions and
post-acquisition performance. Journal of Management Studies, 44: 709–732; Nixon, R.D., Hitt, M.A., Lee,
H. & Jeong, E. 2004. Market reactions to announcements of corporate downsizing actions and implemen-
tation strategies. Strategic Management Journal, 25: 1121–1129.
3 Greer, C.R., & Ireland, T.C. 1992. Organizational and fi nancial correlates of a ‘contrarian’ human resource
investment strategy. Academy of Management Journal, 35: 956–984.
Exploring Behavior in Action
Each chapter opens with a case, grounding the chapter in a real-world
context. Some of the companies featured include Men’s Wearhouse,
McDonalds, W. L. Gore & Associates, Starbucks, and FedEx.
FOCUS AND PEDAGOGY
The book explains and covers all organizational behavior topics, based on the most current research available. Unlike
other OB texts, it uses the lens of an organization’s strategy as a guide. Elements of the book through which we apply this
lens include:
Hitt_FM.indd xxiiHitt_FM.indd xxii 8/17/10 2:48 PM8/17/10 2:48 PM
Preface xxiii
The Strategic Importance of …
Links the issues in the opening case to the organizational
behavior topic of the chapter. The issues are discussed in
light of their importance to organization strategy and ul-
timately how they affect the organization’s performance.
“The Strategic Importance of … and The Strategic
Lens are appropriate ‘bookends’ for the chapter; they
set up how decision making is strategic and reinforce
that at the end of the chapter.”
(Pam Roffol-Dobies,
University of Missouri Kansas City)
Experiencing Organizational
Behavior
These two Exploring Organizational Behavior sections
in each chapter apply the keyconcepts of the chap-
ter. Real-world case situations are used including such
topics as women, work, andstereotypes; Google and
high-quality associates;Coca-Cola’s new fi zz; extreme
jobs; andcommunication at J. Crew. Each discussion
highlights the connection between an OB concept and
the organization’s strategy and performance.
“The Experiencing OB section is also useful since it
provides a conceptual view of the changing approach to
OB. I like the idea that it walks the students through a
situation and then summarizes the prospects for acting
successfully.”
(Marian Schultz, University of West Florida)
“After reading the Experiencing OB section on the
football league, I also found that the example was an
excellent choice. My classroom includes both traditional
and nontraditional students, ranging in age from
20–72 and I think it is important to provide a variety of examples that everyone can
relate to in the course.”
(Marilyn Wesner,
George Washington University)
FPO
EXPERIENCING ORGANIZATIONAL BEHAVIOR
On November 4, 2008, the United States elected Barack Obama as president. Presi-
dent Obama personifi es the concept
of diversity in terms of race, ethnic-
ity, and geography. His black father
was from a small town in Kenya and
his white mother was from Kansas.
His parents met in Hawaii, where he
was born. President Obama’s parents
were divorced when he was 2 years
old. When he was six years old, his
mother remarried a man from Indo-
nesia, and the family moved there.
At the age of ten, Barack Obama
returned to Hawaii to live with his ma-
ternal grandparents. He has a half-
sister who is part Indonesian and is
married to a man who is Chinese Ca-
nadian. President Obama’s wife, Mi-
chelle Obama, is African American.
In an interview with Oprah Winfrey,
President Obama described his fam-
ily get-togethers as “mini United Na-
tions meetings.” He said he had some
relatives that looked like Bernie Mac
and some that looked like Margaret
Thatcher. The Obama family clearly
exemplifi es the diversity inherent in
the United States.
President Obama’s intrapersonal
diversity and strong beliefs that di-
versity in governance is necessary is
refl ected in the diversity of his cabi-
net. Thirty-four percent of his offi cials
are female, 11 percent are black, 8
percent are Hispanic, and 4 percent
are Asian. While these do not seem
like large numbers, they refl ect more
diversity than was present in past ad-
ministrations’ cabinets. This diversity
is expected to increase as President
Obama’s tenure in
offi ce lengthens and
he brings in new of-
fi cials.
The presidency
of Barack Obama
brings up the ques-
tion of whether the
United States has
overcome problems
with racial, ethnic,
and gender discrim-
ination. Is the lead-
ership in this coun-
try fi nally refl ective
of the population? Unfortunately, this
is still not the case, as evidenced by
the demography of corporate lead-
ers. At the end of 2008, there were
5 black, 7 Latino, 7 Asian, and 13
female (2 of whom are Asian) CEOs
of Fortune 500 companies. This
means that 94 percent of Fortune
500 CEOs were white, non-Hispanic
males. Examining the composition
of boards of directors reveals the
same lack of diversity. A Catalyst
2009 study of Fortune 500 com-
panies revealed that women held
15.2 percent of board seats and
women of color held 3.1 percent of
all board director positions. Women
held only 2 percent of board chair
positions. These numbers have re-
mained relatively consistent over the
past fi ve years. A study on African
American representation on corpo-
rate boards found that representa-
tion had decreased from 8.1 percent
in 2004 to 7.4 percent in 2008. In a
recent study of Fortune 100 boards,
the Alliance for Board Diversity (a
joint effort among organizations
concerned with board diversity) con-
cluded that:
• There is a severe underrepresenta-
tion of women and minorities on
corporate boards when compared
to general U.S. population demo-
graphics for race and gender.
• Particular areas of concern include
the lack of representation of minor-
ity women and of Asian Ameri-
cans and Hispanics.
• There is a recycling of the same
minority individuals—especially
African American men—as board
members. Minority and female
board members hold more seats
per person than do white males.
• Very few boards have represen-
tation from all groups. Only four
boards had representation by
all four groups (women, African
Americans, Asian Americans, and
Hispanics).
Will the diversity evident in the
Obama administration fi lter down to
Diversity at the Top
©MANDEL NGAN/Getty Images, Inc.
c02.indd 59 10/08/10 3:54 PM
As the LAFD case shows, negative re-
actions to diversity can have harmful
effects on an organization. These re-
actions, including discrimination and
harassment of various forms, often lead
to lawsuits, turnover, reduced satisfac-
tion, and performance issues. In the
most effective organizations, associates
and managers understand the value of
diversity and capitalize on it to improve
performance. Moreover, associates and
managers cannot escape diverse work-
groups and organizations. Differences
in gender, race, functional background,
and so on are all around us. The United
States is a particularly diverse country
with respect to race and ethnicity, and
current demographic trends indicate
that its population will become even
more diverse.
LAFD’s legal troubles, fi nancial
settlement costs, and public embar-
rassment have led to renewed efforts
to change the culture. The changing
nature of the fi refi ghter’s job, where
80 percent of fi re calls no longer in-
volve structural or brush fi res, probably
has helped in this process.1 Many or-
ganizations, however, have not needed
public embarrassment or changing jobs
to motivate diversity efforts. Many orga-
nizations, particularly large ones, have
voluntarily adopted diversity manage-
with fewer than 100 workers. Over 79
percent of human resource managers
at Fortune 1000 companies said they
believed that successfully managing di-
versity improves their organizations.3
Diversity, if properly managed,
can help a business build competitive
advantage. For example, hiring and
retaining managers and associates
from various ethnicities can help an or-
ganization better understand and serve
an existing diverse customer base. Di-
versity among associates also might
help the organization attract additional
customers from various ethnic groups.
Diverse backgrounds and experiences
incorporated into a work team or task
force can help the organization more
effectively handle an array of com-
plex and challenging problems. Kevin
Johnson, Co-President of Platforms and
Services at Microsoft, puts it this way:
“[W]e must recognize, respect, and
leverage the different perspectives our
employees bring to the marketplace as
strengths. Doing so will ensure that we
will be more competitive in the global
marketplace, will be seen as an em-
ployer of choice, and will be more crea-
tive and innovative … .”4
In the case of nonprofi t organiza-
tions or governmental units such as the
Los Angeles Fire Department, diversity
withheld from donation. In the case of
the Los Angeles Fire Department, di-
verse captains, fi refi ghters, and para-
medics could better communicate with
and predict the behavior of the diverse
citizenry of Los Angeles. This would en-
able the department to better serve the
city. It also would position it to receive
more resources from the city and state
and would increase its likelihood of
being chosen over other organizations
for additional duties in the Los Angeles
area.
Many individuals feel most com-
fortable interacting and working with
people who are similar to them on a va-
riety of dimensions (such as age, race,
ethnic background, education, func-
tional area, values, and personality).5
They must, however, learn to work with
all others in an organization to achieve
common goals. In a truly inclusive work-
place, everyone feels valued and all as-
sociates are motivated and committed
to the mission of the organization. Such
outcomes are consistent with a high-
involvement work environment and can
help organizations achieve competitive
advantage.
We begin this chapter by defi n-
ing organizational diversity and distin-
guishing it from other concepts, such as
affi rmative action. Next, we describe
the strategic importance of Organizational Diversity
c02.indd 49 10/08/10 3:54 PM
Hitt_FM.indd xxiiiHitt_FM.indd xxiii 8/17/10 2:48 PM8/17/10 2:48 PM
xxiv Preface
The Strategic Lens
The Strategic Lens section concludes each
chapter. The section explains the topic of
the chapter through the lens of organiza-
tional strategy. Highlighted is the critical
contribution of the chapter’s concepts to the
organization’s achievement of its goals. The
Strategic Lens concludes with Critical Think-
ing Questions that are designed to emphasize
the student’s knowledge of the OB topic, its
effects on the organization’s strategy, and its
effects on organizational functioning.
Thinking about Ethics
Given the growing importance of ethics, the
“Thinking about Ethics” feature at the end of
every chapter provides an opportunity to ana-
lyze various ethical dilemmas that confront to-
day’s managers. Students are asked to apply OB
concepts to realistic ethical issues to determine
the most ethical course of action.
Managerial Advice
These sections provide advice for future managers
and make a connection to the organization’s strat-
egy and performance. Examples of Managerial
Advice include multinational corporations and
“glocalization”, Phil Jackson’s leadership success,
surfi ng for applicants on MySpace and Facebook,
managing virtual teams, fi nding a fi t at Home
Depot, and “green” policies and practices.
MANAGERIAL ADVICE
Robin Ely, Debra Meyerson, and Martin Davidson are professors at Harvard Uni-
versity, Stanford University, and the
University of Virginia, respectively.
In conjunction with the human devel-
opment and organizational learning
professionals at Learning as Leader-
ship, they have developed several
principles designed to ensure that
members of various social identity
groups do not become trapped in low-
quality workplace relationships. These
principles are designed to encourage
engagement and learning. The prin-
ciples are perhaps best applied in the
context of individuals experiencing
uncomfortable events that are open
to interpretation, such as when the
member of a minority group is told by
someone from the majority that she is
being too aggressive, or when a man
is told by a woman that he is acting as
his grandfather might have acted. The
principles are listed below:
a. Pause to short circuit the emo-
tion and refl ect. Individuals who
have experienced an
uncomfortable event
should take a few mo-
ments to identify their
feelings and consider
a range of responses.
b. Connect with others
in ways that affi rm the
importance of relation-
ships. Individuals who
have experienced an
uncomfortable event
should reach out to
those who have caused the diffi culty,
thereby valuing relationships.
c. Question interpretations and ex-
plore blind spots. Individuals who
have experienced an uncomfort-
able event should engage in self-
questioning as well as the ques-
tioning of others. They should be
open to the interpretations that
others have of the situation, while
realizing that their own interpreta-
tions might be correct.
d. Obtain genuine support that
doesn’t necessarily validate initial
points of view but, rather, helps in
gaining broader perspective. Indi-
viduals who have experienced an
uncomfortable event should seek
input from those who will chal-
lenge their initial points of view on
the situation.
e. Shift the mindset. Individuals who
have experienced an uncomfort-
able event should be open to the
idea that both parties might need
to change to some degree.
Promoting a Positive Diversity Environment
Sources: R.J. Ely, D.E. Meyerson, and M.N. Davidson. 2006. “Rethinking Political Correctness,” Harvard Business
Review, 84 (September); Learning as Leadership, “Research,” 2007, at http://www.learnaslead.com/index.php.
©Tom Grill/Corbis
c02.indd 71 10/08/10 3:55 PM
THE STRATEGIC LENS
O rganizational diversity, when managed effectively, has many benefi ts for organiza-
tions. In general, effectively managed
diversity programs contribute to an
organization’s ability to achieve and
maintain a competitive advantage.
Diversity in teams at all levels can
be helpful in solving complex prob-
lems because heterogeneous teams
integrate multiple perspectives. This
benefi t applies to the upper-echelon
management team as well as to proj-
ect teams, such as new-product-de-
velopment teams, much lower in the
organization. Not only can the diver-
sity help resolve complex problems,
but it also better mirrors U.S. society.
Thus, it signals to potential associates
and potential customers that the orga-
nization understands and effectively
uses diversity. As a result, the organi-
zation has a larger pool of candidates
for potential associates from which it
can select the best. In addition, the
organization is likely to have a larger
potential market because of its under-
standing of the products and services
desired by a diverse marketplace.
Having a diverse organization that
refl ects the demographic composition
of U.S. society is smart business.106
Critical Thinking Questions
1. How does organizational diversity
contribute to an organization’s
competitive advantage?
2. What actions are required to
create diversity in an organization,
particularly in one that has homo-
geneous membership at present?
3. How does diversity in an organi-
zation affect its strategy?
c02.indd 72 10/08/10 3:55 PM
Thinking about Ethics
1. Suppose that an organization has discriminated in the past. Should it now simply stop its
discriminatory practices, or should it also take specifi c actions to increase its diversity by
targeting, hiring, and promoting minorities ahead of nonminorities? Discuss.
2. Should all managers and associates in an organization be required to undergo diversity training
regardless of their desire to do so? Why or why not?
3. Are there any circumstances in which it is appropriate to discriminate against a particular class
of people (such as women)? If so, explain the circumstances. If not, explain why.
4. Women are not a minority in the population but represent a minority in the U.S. workforce,
particularly in some occupations. Why has this occurred in U.S. society (or your home
country, if applicable)?
5. Should all cultures and modes of conduct be tolerated, even if they confl ict with the values of
the organization? Why or why not?
6. What percentage of the organization’s budget should be invested in building and maintaining
an effective diversity management program? How should this percentage compare with other
major budget items?
c02.indd 74 10/08/10 3:56 PM
Hitt_FM.indd xxivHitt_FM.indd xxiv 8/17/10 2:48 PM8/17/10 2:48 PM
http://www.learnaslead.com/index.php
Preface xxv
Human Resource Management
Applications
This new feature at the end of each chapter highlights the
importance of OB concepts to human resource management
and how managers can use these concepts to more effective-
ly manage human capital in the organization. Students will
learn various ways in which managers can use management-
development programs, compensation programs, andselection
processes.
Human Resource Management Applications
The Human Resource Management (HRM) function plays a key role in a fi rm’s capability to
manage diversity. Often diversity offi cers and initiatives are housed within HRM departments. The
following are several activities that an HRM department can use to manage diversity.
A major function of HRM departments is developing, conducting, and evaluating training pro-
grams. Diversity training programs are integral to any diversity management effort. HRM depart-
ments are also likely to evaluate the effectiveness of these programs.
In many organizations, employee recruitment is centralized through the HRM department. Thus,
they are concerned with advertising to, locating, and attracting potential associates from groups
traditionally underrepresented in the organization.
Employee selection may also be centralized through the HRM department. In order to facilitate
an organization’s diversity goals, the HRM department must make certain that methods used to
hire associates (e.g., interviews, job knowledge test, personality tests) are not biased against certain
group members.
An important aspect of many diversity programs is an organizational diversity climate audit,
which surveys associates to determine their feeling of inclusion and satisfaction with diversity initia-
tives. This audit is often the responsibility of the HRM department.
c02.indd 75 10/08/10 3:56 PM
building your human capital
What’s Your DQ (Diversity Quotient)?
How well do you handle diversity? Your ability to be fl exible, work with many different types of
people, and deal with ambiguous situations will be crucial to a successful career in the twenty-fi rst
century. The following assessment will allow you to determine whether you have had the experience
necessary to help in successfully navigating a diverse work environment.
Use the following scale to answer the questions below:
1 point = never
2 points = once or twice
3 points = three or four times
4 points = four or more times
In the last month, how often did you …?
1. See a foreign movie.
2. Speak a language other than your fi rst language.
3. Visit an art or history museum.
4. Have a conversation with someone who was of a different race.
5. Have a conversation with someone who was from a different country.
6. Attend a social event where at least half of the people differed from you in race or ethnic
background.
7. Visit a church that was of a religion different from yours.
c02.indd 75 10/08/10 3:56 PM
Building Your Human Capital
To help students better know themselves and develop
needed skills in organizational behavior, a personal
assessment instrument is included in each chapter. This
includes information on scoring and interpreting the
results. Assessments, for example, are focused on ap-
proaches to diffi cult learning situations, the propensity
to be creative, skill at managing with power, and the
ability to tolerate change.
“The Building Your Human Capital segment is
unique. Students need to recognize the importance
of the topics for developing their personal skills.
This section does a good job in forwarding that
idea.”
(Ceasar Douglas, Florida State University)
an organizational behavior moment
Project “Blow Up”
Big State University (BSU) is proud of the success of its inter-
national executive MBA (EMBA) program. The program is
designed to bring together promising middle- and higher-level
managers from around the globe for an exceptional learning ex-
perience. BSU’s EMBA program has been ranked very highly by
the business press. Alumni praise the program for its excellent
faculty, networking opportunities, and exposure to colleagues
from around the world. Students in the program can either at-
tend weekend classes on BSU’s campus or participate through
distance-learning technology from campuses around the world.
One of the defi ning features of the program is the fi rst-year
team project. Students are randomly assigned to fi ve-member
teams. Each team has a faculty advisor, and each must develop a
business plan for a startup company. A major part of the business
plan involves developing a marketing strategy. The teams begin
the project during orientation week and fi nish at the end of the
next summer. Each team must turn in a written report and a busi-
ness plan and make an hour-long presentation to the other stu-
dents and faculty as well as several executives from well-respected
multinational companies. Students must earn a passing grade on
c02.indd 76 10/08/10 3:56 PM
An Organizational Behavior Moment
The applied, hypothetical case at the end of each chap-
ter gives students an opportunity to apply the knowl-
edge they have gained throughout the chapter. Each
case concludes with questions. Teaching suggestions
are included in the instructor’s resources.
“The case was a good illustration of what life as
a manger is like and it lends itself to a discussion
of what might keep a manager from being highly
involved.”
(Deborah Butler, Georgia State University)
Hitt_FM.indd xxvHitt_FM.indd xxv 8/17/10 2:48 PM8/17/10 2:48 PM
xxvi Preface
SUPPLEMENTS
Instructor’s Resource Guide
The Instructor’s Resource Guide includes an Introduction with sample syllabi, Chapter Outlines, Chapter Objectives,
Teaching Notes on how to integrate and assign special features within the text, and suggested answers for all quiz and
test questions found in the text. The Instructor’s Resource Guide also includes additional discussion questions and as-
signments that relate specifi cally to the cases, as well as case notes, self-assessments, and team exercises. The Instructor’s
Resource Guide can be accessed on the Instructor portion of the Hitt website at http://www.wiley.com/college/hitt.
Test Bank
This robust Test Bank consists of true/false (approximately 60 per chapter), multiple choice (approximately 60 per chap-
ter), short-answer (approximately 25 per chapter), and essay questions (approximately 5 per chapter). Further, it is specifi –
cally designed so that questions will vary in degree of diffi culty, ranging from straightforward recall to more challenging
application questions to ensure student mastery of all key concepts and topics. The organization of test questions also
offers instructors the most fl exibility when designing their exams. A Computerized Test Bank provides even more fl ex-
ibility and customization options to instructors. The Computerized Test Bank requires a PC running Windows. This
electronic version of the Test Bank includes all the questions from the Test Bank within a test-generating program that
allows instructors to customize their exams and also to add their own test questions in addition to what is already avail-
able. Both the Test Bank and Computerized Test Bank are available for viewing and download on the Instructor portion
of the Hitt Website at http://www.wiley.com/college/hitt.
Power Point Presentations
These PowerPoint Presentations provide another visual enhancement and learning aid for students, as well as additional
talking points for instructors. Each chapter’s set of interactive PowerPoint slides includes lecture notes to accompany each
slide. Each presentation includes roughly 30 slides with illustrations, animations, and related web links interspersed ap-
propriately. The PowerPoint Presentations can be accessed on the Instructor portion of the Hitt website at http://www.
wiley.com/college/hitt
team exercise
What Is It Like to Be Different?
One reason people have a diffi cult time dealing with diversity in others or understanding why it is
important to value and respect diversity is that most people spend most of their lives in environ-
ments where everyone is similar to them on important dimensions. Many people have seldom been
in a situation in which they felt they didn’t belong or didn’t know the “rules.” The purpose of this
exercise is to have you experience such a situation and open up a dialogue with others about what
it feels like to be different and what you can personally learn from this experience to become better
at managing diversity in the future.
STEP 1: Choose an event that you would not normally attend and at which you will likely be in
the minority on some important dimension. Attend the event.
• You can go with a friend who would normally attend the event, but not one who will also
be in a minority.
• Make sure you pick a place where you will be safe and where you are sure you will be wel-
comed, or at least tolerated. You may want to check with your instructor about your choice.
• Do not call particular attention to yourself. Just observe what is going on and how you feel.
Some of you may fi nd it easy to have a minority experience, since you are a minority group
member in your everyday life. Others may have a more diffi cult time. Here are some examples of
events to consider attending:
• A religious service for a religion totally different from your own.
• A sorority or fraternity party where the race of members is mostly different from your own.
• A political rally where the politics are different from your own.
c02.indd 78 10/08/10 4:36 PM
Team Exercise
These experiential exercises expand the student’s
learning through activities and engage students in
team building skills. Teaching suggestions are includ-
ed in the instructor’sresources.
“The Exercise at the end of the chapter seemed like
a great way to get students involved and to help
them understand the material.”
(Sharon Purkiss,
California State University at Fullerton)
Hitt_FM.indd xxviHitt_FM.indd xxvi 8/17/10 2:48 PM8/17/10 2:48 PM
http://www.wiley.com/college/hitt
http://www.wiley.com/college/hitt
http://www.wiley.com/college/hitt
http://www.wiley.com/college/hitt
Preface xxvii
Lecture Notes
Lecture Notes provide an outline of the chapter and knowledge objectives, highlighting the key topics/concepts presented
within each chapter. Power-Point slides have been integrated, where relevant, and the lecture notes suggest to instructors
when it’s best to show the class each slide within a particular chapter’s PowerPoint Presentation.
Web Quizzes
Online quizzes with questions varying in level of diffi culty have been designed to help students evaluate their individual
comprehension of the key concepts and topics presented within each chapter. These web quizzes are available at http://www.
wiley.com/college/hitt. Each chapter’s quiz includes 10 questions, including true/false and multiple choice questions. These
review questions, developed by the Test Bank author, Melinda Blackman, have been created to provide the most effective and
effi cient testing system for students as they prepare for more formal quizzes and exams. Within this system, students have the
opportunity to “practice” responding to the types of questions they’ll be expected to address on a quiz or exam.
Prelecture and Postlecture Quizzes
The Prelecture and Postlecture Quizzes can be found exclusively in WileyPLUS. These quizzes consist of multiple-choice
and true/false questions which vary in level of detail and diffi culty while focusing on a particular chapter’s key terms and
concepts. This resource allows instructors to quickly and easily evaluate their students’ progress by monitoring their com-
prehension of the material both before and after each lecture.
The prelecture quiz questions enable instructors to gauge their students’ comprehension of a particular chapter’s content
so they can best determine what to focus on in their lecture.
The postlecture quiz questions are intended to be homework or review questions that instructors can assign to stu-
dents after covering a particular chapter. The questions typically provide hints, solutions or explanations to the students,
as well as page references.
Personal Response System (PRS)
Personal Response System or “Clicker” questions have been designed for each chapter to spark additional in-class dis-
cussion and debate. These questions are drawn from the Test Bank and the web quizzes. For more information on PRS
content, please contact your local Wiley sales representative.
Organizational Behavior Lecture Launcher Video
Video clips from the BBC and CBS News, ranging from 2 to 10 minutes in length tied to the current news topics in orga-
nizational behavior are available on DVD. These video clips provide an excellent starting point for lectures. An instructor’s
manual for using the lecture launcher is available on the Instructor’s portion of the Hitt website. For more information
on the OB Lecture Launcher, please contact your local Wiley sales representative.
Business Extra Select Online Courseware system
This program (available at http://www.wiley.com/college/bxs) provides instructors with millions of content resources
from an extensive database of cases, journals, periodicals, newspapers, and supplemental readings. This courseware system
lends itself extremely well to the integration of real-world content within organizational behavior to enable instructors to
convey the relevance of the course content to their students.
Companion Website
The text’s website at www.wiley.com/college/hitt contains myriad resources and links to aid both teaching and learning,
including the web quizzes described above.
Hitt_FM.indd xxviiHitt_FM.indd xxvii 8/17/10 2:48 PM8/17/10 2:48 PM
http://www.wiley.com/college/hitt
http://www.wiley.com/college/hitt
http://www.wiley.com/college/bxs
www.wiley.com/college/hitt
xxviii Preface
ACKNOWLEDGMENTS
We thank the many people who helped us develop this book. We owe a debt of gratitude to the following people
whoreviewed this book through its development and revision, providing us with helpful feedback. Thanks to those
professors who provided valuable feedback for the third edition: Lon Doty, San Jose State University; Don Gibson,
Fairfi eldUniversity; Richard J. Gibson, Embry-Riddle Aeronautical University; Aden Heuser, Ohio State University;
Arlene Kreinik, Western Connecticut State University; Lorianne D. Mitchell, East Tennessee State University; Wendy
Smith, University of Delaware; and Hamid Yeganeh, Winona State University. Also, thanks to those professors who
reviewed the book in its prior editions and helped us hone its approach and focus: Syed Ahmed, Florida International
University; Johnny Austin, Chapman University; Rick Bartlet, Columbus State Community College; Melinda Blackman,
California State University–Fullerton; Fred Blass, Florida State University; H. Michael Boyd, Bentley College;Regina
Bento, University of Baltimore; Ralph Brathwaite, University of Hartford; David Bush, Villanova University; Mark
Butler, San Diego State University; Steve Buuck, Concordia University; Jay Caulfi eld, Marquette University; William Clark,
Leeward CommunityCollege; Marie Dasborough, University of Miami; Michelle Duffy, University of Kentucky;Michael
Ensby, Clarkson University; Cassandra Fenyk, Centenary College; Meltem Ferendeci-Ozgodek, Bilkent University; Dean
Frear, Wilkes University; Sharon Gardner, College of New Jersey; James Gelatt, University of Maryland–University
College; John George, Liberty University; Lucy Gilson, University of Connecticut-Storrs; Mary Giovannini, Truman
StateUniversity; Yezdi Godiwalla, University of Wisconsin–Whitewater; Elaine Guertler, Lees-McRae College; Carol
Harvey, Assumption College; David Hennessy, Mt. Mercy College; Kenny Holt, Union University; Janice Jackson, West-
ern NewEngland College; Paul Jacques, Western Carolina University; William Judge, University of Tennessee–Knoxville;
BarbaraKelley, St. Joseph’s University; Molly Kern, Baruch College; Robert Ledman, Morehouse College; James Maddox,
FriendsUniversity; Bill Mellan, Florida Sothern College; Lorianne Mitchell, East Tennessee State University; Edward
Miles, Georgia State University; Atul Mitra, University of Northern Iowa; Christine O’Connor, University of Ballarad;
Regina O’Neill, Suffolk University; Laura Paglis, University of Evansville; Ron Piccolo, University of Central Florida;
Chris Poulson, California State Polytechinal University–Pomana; Sharon Purkiss, California State University-Fullerton;
David Radosevich, Montclair State University; William Reisel, St. John’s University; Joe Rode, Miami University of
Ohio; Pam Roffol-Dobies, University of Missouri–Kansas City; Sammie Robinson, Illinoise Wesleyan University; Bob
Roller, Letourneau University; Sophie Romack, John Carroll University; William Rudd, Boise State College; Joel Rudin,
Rowan University; Jane Schmidt-Wilk, Maharishi University of Management; Mel Schnake, Valdosta State University;
Holly Schroth, University of California–Berkeley; Daniel Sherman, University of Alabama–Huntsville; Randy Sleeth,
Virginia Commonwealth University; Shane Spiller, Morehead State University; John Stark, California State University–
Bakersfi eld; Robert Steel, University of Michigan–Dearborn; David Tansik, University of Arizona; Tom Thompson, Uni-
versity of Maryland–University; Edward Tomlinson, John Carroll University; Tony Urban, Rutgers University–Camden;
Fred Ware, Valdosta State University College; and Joseph Wright, Portland Community College. We also greatly appreci-
ate the guidance and support we received from the excellent Wiley team consisting of George Hoffman, Lise Johnson,
Karolina Zarychta, Sarah Vernon, and Sandra Dumas. We also acknowledge and thank former members of the editorial
team who made contributions to this edition: Jayme Heffl er, Kim Mortimer, and Jennifer Conklin. Our colleagues at
Texas A&M University, University of Houston, and Tulane University have also provided valuable support by providing
intellectual input through discussions and debates. There are many people over the years that have contributed to our
own intellectual growth and development and led us to write this book. For all of your help and support, we thank you.
Finally, we owe a debt of gratitude to our many students from whom we have learned and to the students who have used
this text and provided feedback directly to us and through their instructors. Thank you.
MAH
CCM
AC
Hitt_FM.indd xxviiiHitt_FM.indd xxviii 8/17/10 2:48 PM8/17/10 2:48 PM
O P E N I N GC A S ES T U D Y
WHOLE FOODS,
whole people
In 1980, Mackey developed a
partnership with Craig Weller and
Mark Skiles, merging SaferWay
with Weller’s and Skiles’s Clarksville
Natural Grocer to create the Whole
Foods Market. Its first store opened
in 1980 with 12,500 square feet
and 19 employees. This was a
very large health food store rela-
tive to others at that time. There
was a devastating flood in Austin
within a year of its opening and
the store was heavily damaged.
Much of its inventory was ruined
and its equipment was damaged.
The total losses were approximately
$400,000, and the company had
no insurance. Interestingly, custom-
ers and neighbors helped the staff
of the store to repair and clean up
the damage. Creditors, vendors, and
investors all partnered to help the
store reopen only 28 days after the
flood. With their assistance, Whole
Foods survived this devastating natu-
ral disaster.
Whole Foods started to expand
in 1984 when it opened its first store
outside of Austin. The new store was
located in Houston, followed by an-
other store in Dallas and one in
New Orleans. It also began acquir-
ing other companies that sold natu-
ral foods, which helped to increase
its expansion into new areas of the
United States. In 2007, it expanded
into international markets by opening
its first Whole Foods branded store
W
hole Foods Market is the largest
natural food retailer in the world.
With operations located primarily
in the United States and also in Canada and
the United Kingdom, Whole Foods sells natural
and organic food products that include produce,
meat, poultry, seafood, grocery products, baked
and prepared goods, many drinks such as beer
and wine, cheese, floral products, and pet prod-
ucts. The origin of the company dates to 1978
when John Mackey and his girlfriend used
$45,000 in borrowed funds to start a small nat-
ural food store then named SaferWay. The store
was located in Austin, Texas. John and his girl-
friend lived in the space over the store (without
a shower) because they were “kicked out” of
their apartment for storing food products in it.
Opening Case.indd 1Opening Case.indd 1 12/08/10 10:59 AM12/08/10 10:59 AM
2Whole Foods, Whole People
O P E N I N GC A S ES T U D Y
in London, England. (In 2004, it
acquired a small natural foods com-
pany in the United Kingdom, Fresh
& Wild, but did not use the Whole
Foods brand until opening its new
store in London.) It also acquired one
of its major U.S. competitors, Wild
Oats, in 2007. It now has more than
54,000 employees in about 280
stores with annual sales of $7.95 bil-
lion. Thus, Whole Foods has become
a major business enterprise and the
most successful natural and organic
food retailer in the world.
MANAGING HUMAN CAPITAL
Whole Foods Market has done
a number of things right, thereby
achieving considerable success. Yet,
many people believe that one of the
best things it has done is to implement
an effective people-management sys-
tem. Each Whole Foods store em-
ploys approximately 40 to as many
as 650 associates. All of the associ-
ates are organized into self-directed
teams; associates are referred to as
team members. Each of the teams
is responsible for a specific prod-
uct or service area (e.g., prepared
foods, meats and poultry, customer
service). Team members report to a
team leader, who then works with
store management, referred to as
store team leaders. The team mem-
bers are a critically important part of
the Whole Foods operation. Individu-
als are carefully selected and trained
to be highly knowledgeable in their
product areas, to offer friendly serv-
ice, and to make critical decisions
related to the types and quality of
products offered to the public. Thus,
they operate much differently than
most “employees” in retail grocery
outlets. These team members work
together with their team leader to
make a number of decisions with re-
gard to their specific areas, and they
contribute to store level decisions as
well. Some observers have referred
to this approach as “workplace de-
mocracy.” In fact, many of the team
members are attracted to Whole
Foods because of the discretion they
have in making decisions regarding
product lines and so on. Of course,
there are other attractions such as
the compensation. For example, the
company’s stock option program
involves employees at all levels. In
fact, 94 percent of the stock options
offered by the company have been
presented to nonexecutive members,
including front-line team members.
The company pays competitive
wages and pays 100 percent of the
health insurance premium for all as-
sociates working at least 30 hours
per week, which includes 89 percent
of its workforce. Although the annual
deductible is high ($2,500), each
associate receives a grant of up to
$1,800 annually in a Personal Well-
ness Account to be used for health
care out-of-pocket costs. All of the
benefit options are voted on by the
associates in the company. Current
programs include options for dental,
vision, disability, and life insurance
in addition to the full medical cover-
age for full-time associates.
Whole Foods follows a demo-
cratic model in the selection of new
associates. For example, potential
new team members can apply for
any one of the 13 teams that oper-
ate in most Whole Foods Markets.
Current team members participate in
the interview process and actually
vote on whether to offer a job to
prospective colleagues. A candidate
is generally given a four-week trial
period to determine whether he or
she has potential. At the end of that
trial period, team members vote on
whether to offer a permanent job to
the candidate. The candidate must
receive a two-thirds majority positive
vote from the unit team members in
order to be hired.
Teams also receive bonuses if
they perform exceptionally well. They
set goals relative to prior perform-
ance and must achieve those goals
to attain a bonus. Exceptionally high-
performing teams may earn up to $2
an hour more than their current wage
base.
The top management of Whole
Foods believes that the best philoso-
phy is to build a shared identity
with all team members. They do so
by involving them in decisions and
encouraging their participation at
all levels in the business. They em-
power employees to make decisions
and even allow them to participate
in the decision regarding the benefit
options, as noted above. All team
members have access to full informa-
tion on the company. It is referred
to as Whole Foods’ open-book pol-
icy. In this open-book policy, team
members have access to the firm’s
financial records, which include com-
pensation information for all associ-
ates and even the top management
team and the CEO. Therefore, the
firm operates with full transparency
regarding its associates. This ap-
proach emphasizes the company’s
core values of collaboration and
decentralization. The company at-
tracts people who share those core
Opening Case.indd 2Opening Case.indd 2 12/08/10 10:59 AM12/08/10 10:59 AM
3Whole Foods, Whole People
O P E N I N GC A S ES T U D Y
values and tries to reward a highly
engaged and productive workforce.
The company also limits the pay
of top executives to no more than
19 times the lowest paid associate
in the firm. While this amount has
been increased over time in order to
maintain competitive compensation
for managers, it is still well below in-
dustry averages for top management
team members. And, in recent times,
John Mackey, the CEO, announced
that he no longer will accept a sal-
ary above $1 annually or the stock
options provided to him. Thus, his
salary was reduced from $1 million
to $1 per year. The money saved
from his salary is donated to a fund
to help needy associates.
The outcomes of this unique
system for managing human capital
have been impressive. For example,
Whole Foods’ voluntary turnover is
much lower than the industry aver-
age. The industry average is almost
90 percent annually, but Whole
Foods’ data show that it has a vol-
untary turnover rate of approximately
26 percent. In addition, Whole
Foods was ranked number 22 in the
top 100 best companies to work for
by Fortune magazine in 2009. It has
been on the top 100 best companies
to work for list for the past 12 years,
and its ranking has been as high as
number 5 (in 2007) but has always
been among the best in the top 100.
In addition to its flat organization
structure (few layers of management
between associates and top man-
agers) and decentralized decision
making (e.g., selection of new associ-
ates), the company believes that each
employee should feel a stake in the
success of the company. In fact, this
is communicated in its “Declaration of
Interdependence.” The Declaration
of Interdependence suggests that the
company has five core values. They
are listed in Table 1.
The company attempts to support
team member excellence and happi-
ness through its empowering work
environment in which team members
work together to create the results.
In such an environment, they try to
create a motivated work team that
achieves the highest possible produc-
tivity. There is an emphasis on indi-
viduals taking responsibility for their
success and failure and seeing both
as opportunities for personal and or-
ganizational growth.
The company develops self-di-
rected work teams and gives them
significant decision-making author-
ity to resolve problems and build a
department and product line to sat-
isfy and delight the customers. The
company believes in providing open
and timely information and in being
highly transparent in all of its opera-
tions. It also focuses on achieving
progress by continuously allowing
associates to apply their collective
creativity and intellectual capabilities
to build a highly competitive and
successful organization. Finally, the
company emphasizes a shared fate
among all stakeholders. This is why
there are no special privileges given
to anyone, not even to top manag-
ers. It is assumed that everybody
works together to achieve success.
SOCIAL AND COMMUNITY
RESPONSIBILITIES
Whole Foods Market takes pride in
being a responsible member of its
community and of society. For exam-
ple, it emphasizes the importance of
sustainable agriculture. In particular,
the firm tries to support organic farm-
ers, growers, and the environment by
a commitment to using sustainable
agriculture and expanding the market
for organic products. In this regard,
the Whole Foods Market launched
a program to loan approximately
$10 million annually to help inde-
pendent local producers around the
country to expand. It holds seminars
and teaches producers how to move
their products onto grocery shelves
and how to command and receive
premium prices for their products.
These seminars and related activities
have been quite popular. As an ex-
ample, its first seminar held in Colo-
rado a few years ago attracted 130
growers, which was almost twice
as many as expected. Overall, the
Whole Foods Market does business
TABLE 1 Whole Foods’ Declaration of Interdependence
(Five Core Values)
1. Selling the highest-quality natural and organic food products avail-
able.
2. Satisfying and delighting customers.
3. Supporting team member excellence and happiness.
4. Creating wealth through profi ts and growth.
5. Caring about communities and the environment.
Opening Case.indd 3Opening Case.indd 3 12/08/10 10:59 AM12/08/10 10:59 AM
4Whole Foods, Whole People
O P E N I N GC A S ES T U D Y
with more than 2,400 independent
growers.
Whole Foods Market also sup-
ports its local communities in other
ways. For example, the company
promotes active involvement in local
communities by giving a minimum of
5 percent of its profits each year to
a variety of community and nonprofit
organizations. These actions encour-
age philanthropy and outreach in
the communities that Whole Foods
serves.
Whole Foods Market also tries
to promote positive environmental
practices. The company emphasizes
the importance of recycling and re-
using products and reducing waste
wherever possible. Furthermore,
Whole Foods was the first retailer to
build a supermarket that met environ-
mental standards of the Leadership
in Energy and Environmental De-
sign Green Building Rating System
(LEED). It was the largest corporate
purchaser of wind credits in the his-
tory of the United States when it pur-
chased enough to offset 100 percent
of its total electricity use in 2006.
Finally, Whole Foods announced a
new initiative a few years ago to cre-
ate an animal compassion standard
that emphasizes the firm’s belief in
the needs of animals. The company
developed standards for each of the
species that are used for foods and
sold through their supermarkets.
Whole Foods launched a pro-
gram to encourage higher wages
and prices paid to farmers in poor
countries, while simultaneously pro-
moting environmentally safe prac-
tices. In fact, the company donates
a portion of its proceeds to its Whole
Planet Foundation, which in turn
provides microloans to entrepreneurs
in developing countries.
Very few, if any, major cor-
porations, including competing su-
permarket chains, have established
programs that rival those of the
Whole Foods Market to meet social
and community responsibilities.
SOME BUMPS IN THE ROAD
While the Whole Foods Market has
been a highly successful company,
it still has experienced some prob-
lems along the way. Obviously, it
has produced a concept that has
been imitated by other natural foods
companies and a number of com-
peting supermarkets as well. Yet, in
general, Whole Foods has been able
to maintain its competitive advantage
and market leadership, partly by be-
ing the first to the market and partly
because of its practices, which con-
tinue to generate a strong reputation
and a positive company image. Yet,
a number of firms have developed
competing products and are making
headway in selling organic foods,
including some regular large super-
market chains. Even Wal-Mart has
begun to offer organic foods in its
grocery operations. In order to main-
tain its leadership and to continue to
command a premium price, Whole
Foods Market must continuously dif-
ferentiate its products and its image
so that people will buy from it rather
than from competitors.
The top management of the
Whole Foods Market has been
strongly opposed to unionization.
The belief is that the company pays
workers well and treats them with
dignity and respect and that a union
is likely to interfere in its relationships
with associates. Mackey, the CEO of
the company, suggests that it is a
campaign to “love the worker, not a
union.” Yet, the first union for Whole
Foods was voted in at its Madison,
Wisconsin, store. The vote by the
Madison associates was 65 to 54 in
favor of organizing a union. When
this vote was announced, Mackey re-
ferred to it as a sad day in the his-
tory of the company. He suggested
that the associates had made a mis-
take and believed that they would
eventually realize the error of their
ways. However, the Whole Foods
Market executives have been able to
fend off union efforts at other stores,
including a campaign launched in
2009 that the company referred to
as “union awareness training.”
Another problem became
evident in 2007, when it was an-
nounced that Mackey had, for a few
years, posted on a Yahoo! financial
message board anonymous online
critiques of competitors and self-
congratulating statements about the
Whole Foods Market. These com-
ments were made using a pseudo-
nym so no one knew that he was the
CEO of Whole Foods. This action
was strongly criticized by analysts
and others, and several questioned
the ethics of his actions. Given that
Whole Foods has emphasized its
ethical approach to business and
suggested that it conducts fair and
open operations, such actions could
be potentially harmful to the Whole
Foods Market image and reputation.
In fact, the company launched an
investigation of his actions. In ad-
dition, the Securities and Exchange
Commission (SEC) investigated
some of the postings to Internet
Opening Case.indd 4Opening Case.indd 4 12/08/10 10:59 AM12/08/10 10:59 AM
5Whole Foods, Whole People
O P E N I N GC A S ES T U D Y
chat rooms by Mackey in which
he used a pseudonym. The concern
was that he may have released in-
formation that should not have been
provided to the market. The Whole
Foods’ Board completed its investi-
gation and reaffirmed its support for
Mackey. In addition, the SEC inves-
tigated the incident but concluded
that no enforcement action would
be taken against the company or
the CEO.
FIRM PERFORMANCE AND THE
FUTURE
Whole Foods Market has performed
well over the past several years, sus-
taining significant growth in sales
and profits. Its stock price has also
generally performed well. However,
during the period 2005–2008, some
analysts argued that the stock was
overvalued, partly because they did
not believe that Whole Foods’ growth
rate and returns could be sustained.
Undoubtedly, being able to maintain
the growth rate will be difficult as the
competition in its natural and organic
foods grows and as the number of
markets and opportunities narrows,
particularly in the United States. This
is especially of concern given the
changed behaviors caused by the
recent economic recession. Yet, some
analysts are bullish on Whole Foods’
stock. The price of its stock doubled
early in 2009; according to some
analysts, these outcomes portend the
future because Whole Foods’ busi-
ness model seems to be strong in
the face of a challenging economic
environment. The company is highly
profitable and continues to outper-
form its direct competitors.
Mackey has stated on several
occasions that he does not make de-
cisions on the basis of Wall Street’s
reactions. He argues that investors
should not invest in his stock for the
short term. Rather, they should look
for long-term value increases be-
cause he will make decisions in the
best interest of the shareholders for
the long term. Perhaps this approach
will provide better returns over time,
but only time will tell. Clearly, Whole
Foods Market has been a very posi-
tive force in dealing with its associ-
ates through its highly unique means
of managing human capital. It also
has built a strong positive reputa-
tion and differentiated its products
in the eyes of consumers. Yet, there
are some challenges with which the
firm must deal, such as growing
competition and potential unioniza-
tion. While the future likely remains
bright, further evaluation will be
needed to determine whether there
will be continued growth and posi-
tive returns for all stakeholders of the
Whole Foods Market.
Source: Whole Foods Market logo used
with permission.
1. 100 best companies to work for: Whole Foods Market 2009.
Fortune, at http://money.cnn.com. accessed on June 15.
2. S. Cendrowski. 2009. What about Whole Foods? Fortune,
July 20: 26.
3. Declaration of interdependence. 2007. Whole Foods Market
website, at http://www.wholefoodsmarket.com, April 29.
4. C. Dillow. Innovating toward health care reform, the Whole
Foods way. 2009. Fast Company.com, at http://fastcom-
pany.com, August 12.
5. P.J. Erickson & L. Gratton. 2007. What it means to work
here. Harvard Business Review, March: 85 (3): 104–112.
6. J.P. Fried. 2007. At Whole Foods, a welcome sign for
immigrants seeking jobs. New York Times, at http://www.
nytimes.com, April 29.
7. S. Hammer & T. McNicol. 2007. Low-cow compensation.
Business 2.0, May: 62.
8. M. Hogan. 2007. Whole Foods: A little too rich? Business-
Week, at http://www.businessweek.com, July 21.
9. P. Huetlin. 2007. Flagship Whole Foods opens in London.
BusinessWeek, at http://www.businessweek.com, July 5.
10. L. Hunt. 2005. Whole Foods Market, Inc. At http://www.
marketbusting.comlcasestudies, March 30.
11. D. Kesmodel & J. Eig. 2007. Unraveling rahodeb: Agrocer’s
brash style takes unhealthy turn. Wall Street Journal Online,
at http://oniine.wsj.com, July 30.
12. N.S. Koehn & K. Miller. 2007. John Mackey and Whole
Foods Market. Harvard Business School Case #9-807-111,
May 14.
13. J. Mackey. 2007. I no longer want to work for money. Fast
Company, at http://www.fastcompany.com, February.
14. A. Nathans. 2003. Love the worker, not the union, a store
says as some organize. New York Times, at http://www.
nytimes.com, May 24.
15. Our core values. 2009. Whole Foods Market website, at
http://www.wholefoodsmarket.com, April 29.
16. K. Richardson & D. Kesmodel. 2007. Why Whole Foods
investors may want to shop around. Wall Street Journal
Online, at http://online.wsj.com, November 23.
17. C. Rohwedder. 2007. Whole Foods opens new front. Wall
Street Journal Online, at http://online.wsj.com, June 6.
18. S. Smith. 2009. Something stinks at Whole Foods. Counter-
punch, at http://www.counterpunch.org, May 8–10.
19. J. Sonnenfeld. 2007. What’s rotten at Whole Foods. Business
Week, at http://www.businessweek.com, July 17.
REFERENCES
Opening Case.indd 5Opening Case.indd 5 12/08/10 10:59 AM12/08/10 10:59 AM
http://money.cnn.com
http://www.wholefoodsmarket.com
http://fastcom-pany.com
http://fastcom-pany.com
http://www.nytimes.com
http://www.nytimes.com
http://www.businessweek.com
http://www.businessweek.com
http://www.marketbusting.comlcasestudies
http://www.marketbusting.comlcasestudies
http://oniine.wsj.com
http://www.fastcompany.com
http://www.nytimes.com
http://www.nytimes.com
http://www.wholefoodsmarket.com
http://online.wsj.com
http://online.wsj.com

Home


http://www.businessweek.com
6Whole Foods, Whole People
O P E N I N GC A S ES T U D Y
20.B. Steverman. 2009. Wal-Mart vs. Whole foods. Business-
Week, at http://www.businessweek.com, May 14.
21.S. Taub. 2008. Whole Foods “blogging” probe dropped
by SEC. CFO, at http://www.cfo.com, April 28.
22.S. Thurm. 2007. Whole Foods CEO serves up heated word
for FTC. Wall Street Journal Online, at http://online.swj.
com, June 27.
23.Welcome to Whole Foods Market. 2009. Whole Foods Mar-
ket website, http://www.wholefoodsmarket.com, August 30.
24.J.E. Wells & T. Haglock. 2005. Whole Foods Market, Inc.
Harvard Business School Case #9-705-476, June 9.
25.Whole Foods closes buyout of Wild Oats. 2007. New York
Times, at http://www.nytimes.com, August 29.
26.Whole Foods Market soars to #5 spot on Fortune’s “100
Best Companies to Work For” list. Whole Foods Market
website, at http://www.wholefoodsmarket.com, January 9.
27.Whole Foods Market. 2007. Wikipedia, at http://www.
wikipedia.com, September 2.
28.Whole Foods promotes local buying. 2007. New York
Times, at http://www.nytimes.com, April 29.
WHOLE FOODS CASE DISCUSSION QUESTIONS
Chapter 1
1. Describe how Whole Foods uses human capital as a
source of competitive advantage.
2. Identify the aspects of high-involvement management
contained in Whole Foods’ approach to managing its
associates.
Chapter 2
1. Compared to other companies in the service sector,
is Whole Foods more or less likely to experience dis-
crimination problems? Explain your answer.
2. How could Whole Foods’ democratic model of selec-
tion interfere with the development or continuance of
a diverse workforce? What should it do to prevent
difficulties?
Chapter 3
1. How do you think that globalization will affect Whole
Foods over time? Please explain several ways it could
affect the company operations.
2. In what ways can national culture affect the manage-
ment of human capital? Will Whole Foods have to
adapt its democratic approach to selecting new team
members or the benefits it provides to its associates
as it expands further into international markets?
Chapter 4
1. To what extent do you think that training and as-
sociate learning would be more important for Whole
Foods than for other grocery stores?
2. What type of perceptual problems on the part of as-
sociates and the public may have resulted from the
scandal regarding John Mackey’s blog activities?
Chapter 5
1. Given the nature of Whole Foods’ jobs and the way
in which associates are selected, what type of person-
ality traits are important for Whole Foods’ associates
to possess?
2. Compared to the industry average, Whole Foods
has a low turnover rate and is consistently ranked
as a great place to work. Why do you think Whole
Foods’ associates are so satisfied and committed to
the organization?
Chapter 6
1. Are Whole Foods’ team members likely to experience
problems with procedural and/or distributive justice?
Explain.
2. Which of the major motivational practices are empha-
sized by Whole Foods in its management system? For
example, do they include meaningful rewards, tying
rewards to performance, designing enriched jobs, pro-
viding feedback, or clarifying expectations and goals?
Chapter 7
1. Based on the demand–control and effort–reward mod-
els of stress, are Whole Foods’ team members likely
to experience a great deal of stress? What about its
executives?
2. Does Whole Foods need a wellness program? Why
or why not?
Chapter 8
1. Is John Mackey a transformational leader? Why or
why not?
2. Based on contingency theories of leadership, what
approach to leadership should be used by Whole
Foods’ team leaders?
Chapter 9
1. Whole Foods’ open-book policy allows all associ-
ates to have full access to all information about the
company and its executives. Would this degree of
open communication work as well in other compa-
nies? Why or why not? What impact do you think
this degree of transparency has on the attitudes and
behavior of Whole Foods’ associates?
Opening Case.indd 6Opening Case.indd 6 12/08/10 10:59 AM12/08/10 10:59 AM
http://www.businessweek.com
http://www.cfo.com
http://online.swj.com
http://online.swj.com
http://www.wholefoodsmarket.com
http://www.nytimes.com
http://www.wholefoodsmarket.com
http://www.wikipedia.com
http://www.wikipedia.com
http://www.nytimes.com
7Whole Foods, Whole People
O P E N I N GC A S ES T U D Y
2. What ethical issues arise from John Mackey’s use of
a pseudonym to post opinions, information, and cri-
tiques on blog sites?
Chapter 10
1. What decision styles does John Mackey appear to
use? Do these fit his situation?
2. Which group decision-making pitfalls appear most
likely within Whole Foods’ teams, and which decision-
making techniques would you recommend to counter
those pitfalls?
Chapter 11
1. What policies and procedures does Whole Foods en-
act that allow it to develop successful associate teams?
2. What impact do you think that the process of allowing
team members to vote on hiring new members has on
the dynamics and performance of the Whole Foods
teams?
Chapter 12
1. Whole Foods’ “Declaration of Interdependence” states
that two of the company’s core values are “creating
wealth through profits and growth“ and “caring about
our communities and the environment.” Often, these
two values are in conflict for many companies. How
does Whole Foods resolve this conflict?
2. Whole Foods has been opposed to the unionization
of its associates. However, associates in a Madison,
Wisconsin, store voted to become unionized. What
type of conflicts or power struggles may have caused
this to occur?
Chapter 13
1. Analyze the effects of the democratic approach to
store operations and hiring new associates on store
performance.
2. What does the transparency about company finan-
cial data and associate and managers’ compensation
communicate about Whole Foods’ culture? How does
the Declaration of Interdependence reflect aspects of
Whole Foods’ culture?
Chapter 14
1. Analyze how Whole Foods has managed change
over the years since it started.
2. Whole Foods now faces a significant amount of
competition. How should it respond to the changes
in the competitive landscape of its industry? What
future challenges do you envision for Whole Foods’
market?
Opening Case.indd 7Opening Case.indd 7 12/08/10 10:59 AM12/08/10 10:59 AM
This page intentionally left blank
the strategic lens
This book describes the rich and impor-
tant concepts that make up the fi eld of
organizational behavior. We have based
the book on cutting-edge research as well
as current practices in organizations.
Beyond this, the book is unique in pre-
senting these concepts through a strategic
lens. That is, in each chapter, we explain
the strategic importance of the primary
concepts presented in the chapter. Our
discussions emphasize how managers
can use knowledge of these concepts to
improve organizational performance.
In Part I, we develop and explain
the strategic lens for organizational be-
havior. To begin, we describe in Chapter
1 the concept of competitive advantage
and how behavior in an organization
affects the organization’s ability to
gain and maintain an advantage over
its competitors. Gaining and maintain-
ing a competitive advantage is critical for
organizations to perform at high levels
and provide returns to their stakeholders
(including owners). We emphasize the
importance and management of human
capital for high performance and describe
the high-involvement organization and
how to manage associates to achieve it.
Chapter 2 examines the criti-
cal topic of organizational diversity.
Given the demographic diversity in the
United States, all organizations’ work-
forces are likely to become increasingly
diverse. Thus, it is important to under-
stand diversity and how to manage it
effectively in order to gain a competitive
advantage. This chapter explains how
these outcomes can be achieved.
Chapter 3 discusses managing
organizations in a global environment.
International markets offer more op-
portunities but also are likely to present
greater challenges than domestic mar-
kets. Understanding the complexities of
managing in international markets is a
necessity. It is especially important to
understand how to manage diverse cul-
tures and operations in varying types of
institutional environments.
The three chapters of Part I pro-
vide the setting for exploring the topics
covered in the chapters that follow.
PART 1
ORGANIZATIONAL
BEHAVIOR
A GLOBAL CONTEXT
ORGANIZATIONAL
BEHAVIOR
A STRATEGIC APPROACH
ORGANIZATIONAL
DIVERSITY
THE STRATEGIC LENS
INDIVIDUAL PROCESSES
LEARNING AND PERCEPTION
PERSONALITY, INTELLIGENCE, ATTITUDES, AND EMOTIONS
WORK MOTIVATION
STRESS AND WELL-BEING
GROUPS, TEAMS, AND SOCIAL PROCESSES
LEADERSHIP
COMMUNICATION
DECISION MAKING BY INDIVIDUALS AND GROUPS
GROUPS AND TEAMS
CONFLICT, NEGOTIATION, POWER, AND POLITICS
THE ORGANIZATIONAL CONTEXT
ORGANIZATIONAL STRUCTURE AND CULTURE
ORGANIZATIONAL CHANGE AND DEVELOPMENT
c01.indd 9c01.indd 9 12/08/10 10:43 AM12/08/10 10:43 AM
This page intentionally left blank
a strategic approach
to organizational
behavior
exploring behavior in action
Strategic Use of Human Capital:
A Key Element of Organizational Success
I
n their book, The New American Workplace, James O’Toole and Edward Lawler described the existence of high-in-
volvement, high-performance companies that spanned many industries. Examples of such companies are Nucor, W.L.
Gore & Associates, Proctor & Gamble, and the Men’s Wearhouse, among others. For example, Proctor & Gamble
adopted high-involvement work practices at some of its manufacturing facilities, including empowerment of work teams
to allocate the tasks among their members, establish their own work schedules, recruit new members to their team and
even to select the methods used to accomplish their tasks. In addition, P&G invests in building human capital, and much
of the training is done by P&G managers instead of
human resource management or training specialists. In
fact, P&G views work life as a career-long learning and
development process. P&G has a different “college”
for educating its workforce in the knowledge and skills
needed for their current and future jobs. The company
also carefully screens all candidates in the hiring pro-
cess. The company received approximately 400,000
applications in 2009 for entry-level management posi-
tions and hired fewer than 2,000 (less than one-half of
one percent).
The Men’s Wearhouse is another company ben-
efi ting from high-involvement work practices. George
Zimmer, founder and chief executive offi cer (CEO)
of the Men’s Wearhouse, described his company’s
approach in managing the people who carry out day-
to-day work:
We give people the space they need to be creative, set
goals, defi ne strategies, and implement a game plan. We
call it “painting our own canvas.” Our people like that
freedom and the underlying trust behind it.
?knowledge objectives
After reading this chapter, you should be able to:
1. Defi ne organizational behavior and explain the
strategic approach to OB.
2. Provide a formal defi nition of organization.
3. Describe the nature of human capital.
4. Discuss the conditions under which human capi-
tal is a source of competitive advantage for an
organization.
5. Describe positive organizational behavior and
explain how it can contribute to associates’ pro-
ductivity.
6. Explain the fi ve characteristics of high-involvement
management and the importance of this approach
to management.
1
c01.indd 11c01.indd 11 12/08/10 10:43 AM12/08/10 10:43 AM
12
Sources: “Fulfi llment at Work,” Men’s Wearhouse, September 27, 2009, at http://www.menswearhouse.com; R. Crockett. 2009.
“How P&G Finds and Keeps a Prized Workforce,” BusinessWeek, Apr. 9, at http://www.businessweek.com; “Fortune 100 Best
Companies to Work For 2009,” CNNMoney, Feb. 2, 2009, at http://www.money.cnn.com; J. O’Toole and E. E. Lawler, III.
2007. “A Piece of Work,” Fast Company, Dec. 19, at http://www.fastcompany.com; M. Cianciolo. 2007. “Tailoring Growth at
Men’s Wearhouse: Fool by theNumbers,” The Motley Fool, May 23 at http://www.fool.com; C.A. O’Reilly and J. Pfeffer. 2000.
Hidden Value: How Great Companies Achieve Extraordinary Results with Ordinary People (Boston: Harvard Business School Press);
G. Zimmer. 2005. “Building Community through Shared Values, Goals, and Experiences,” at http://www.menswearhouse.
com/home_page/common_threads; G.Zimmer. 2005. “Our Philosophy,” at http://www.menswearhouse.com/home_page/
common_threads.
©iStockphoto
Under this philosophy, individuals are given sub-
stantial discretion in choosing work methods and goals.
Training is both quantitatively and qualitatively greater at
the Men’s Wearhouse than at the vast majority of retail-
ers. Such training provides the base for effective use of
discretion by individuals.
Reward systems that value
individual and team pro-
ductivity help to encour-
age the type ofbehavior
that isdesired. Responsi-
bility and accountability
complement the system.
The base for the sys-
tem of discretion and
accountability is a core
set of workplace beliefs,
including the following:
1. Work should be
fulfi lling.
2. Workplaces should be fearless and energized.
3. Work and family life should be balanced.
4. Leaders should serve followers.
5. Employees should be treated like customers.
6. People should not be afraid to make mistakes.
The success of the Men’s Wearhouse should pro-
mote frequent attempts to imitate its practices, but this
has not been the case. Instead, confronted with diffi cult
industry conditions, managers in many retailing fi rms
have attempted to minimize costs through low compensa-
tion and little training. They have implemented supervi-
sion and surveillance systems designed to tightly control
employees. Many companies make assumptions about
their workforce, but their actions do not allow the human
potential existing in their workforce.
Yet, some of the highest-performing companies treat
their associates in a different way. The leadership of these
companies believe that
valuing people is crucial
for business success. They
believe they get more out
of their employees by
providing them power
and autonomy, and the
results support this belief.
These companies con-
tinue to grow, have low
labor costs and achieve
high profi ts while paying
high compensation be-
cause of the productivity
of their workforce. For ex-
ample, Starbucks provides a much larger and more costly
benefi ts package to its workforce than most other retail-
ers. Starbucks can do this not because of the “premium”
it charges for its products but because of its productive,
customer-oriented associates who produce a premium for
the company. The bottom line is that companies that allow
associates to participate in major decisions, invest heavily
in training, and provide profi t-sharing programs to their
associates have a much more productive workforce and
enjoy the many benefi ts that are derived from it. They are
often among the Best 100 Companies to Work For and
are among the top fi nancial performers in industry. They
perform well because they gain the most value from their
human capital.
c01.indd 12c01.indd 12 12/08/10 10:43 AM12/08/10 10:43 AM
http://www.menswearhouse.com
http://www.businessweek.com
http://www.money.cnn.com
http://www.fastcompany.com
http://www.fool.com
http://www.menswearhouse.com/home_page/common_threads
http://www.menswearhouse.com/home_page/common_threads
http://www.menswearhouse.com/home_page/common_threads
http://www.menswearhouse.com/home_page/common_threads
Basic Elements of Organizational Behavior 13
The examples of Men’s Wearhouse,
Proctor & Gamble, and Starbucks show
the powerful difference that a fi rm’s
human capital can make. Faced with
less-than-favorable industry character-
istics and a labor pool that many fi nd
unattractive in the retail fi eld, Men’s
Wearhouse and Starbucks have suc-
ceeded in part by paying careful atten-
tion to human behavior. Any fi rm can
sell men’s clothing and coffee, but it
requires special management to effec-
tively embrace and use to advantage
the complexities and subtleties of hu-
man behavior. From the motivational
and leadership practices of managers
to the internal dynamics of employee-
based teams to the values that provide
the base for the organization’s culture,
successful fi rms develop approaches
that unleash the potential of their peo-
ple (human capital).
In the current highly competitive
landscape, the ability to understand,
appreciate, and effectively leverage hu-
man capital is critical in all industries.
A strategic approach to organizational
behavior is focused on these issues. In
this chapter, we introduce the concept
of organizational behavior and explain
how to view it through a strategic lens
in order to enhance organizational per-
formance.
To introduce the strategic ap-
proach to organizational behavior, or
OB, we address several issues. First,
we defi ne organizational behavior and
discuss its strategic importance for or-
ganizational performance. Next, we
explore the concept of human capital
and its role in organizations. We then
discuss how human capital most likely
contributes to a competitive advantage
for an organization. An explanation of
high-involvement management follows.
This form of management is helpful in
developing and using human capital
and is becoming increasingly impor-
tant as fi rms search for ways to maxi-
mize the potential of all of their people
(managers and nonmanagers). In the fi –
nal section of the chapter, we describe
the model and plan for the concepts
explained in this book.
the strategic importance ofOrganizational Behavior
Basic Elements of Organizational Behavior
Important resources for businesses and other types of organizations include technologies,
distribution systems, fi nancial assets, patents, and the knowledge and skills of people.
Organizational behavior involves the actions of individuals and groups in an organi-
zational context. Managing organizational behavior focuses on acquiring, developing,
and applying the knowledge and skills of people. The strategic OB approach rests on
the premise that people are the foundation of an organization’s competitive advantages.1
An organization might have exceptionally high-quality products and services, excellent
customer service, best-in-class cost structure, or some other advantage, but all of these
are outcomes of the capabilities of the organization’s people—its human capital. If orga-
nized and managed effectively, the knowledge and skills of the people in the organization
drive sustainable competitive advantage and long-term fi nancial performance.2 Thus,
the strategic approach to OB involves organizing and managing the people’s knowledge
and skills effectively to implement the organization’s strategy and gain a competitive
advantage.
Individual, interpersonal, and organizational factors determine the behavior and the
ultimate value of people in an organization; these factors are shown in Exhibit 1-1. For
individuals, factors such as the ability to learn, the ability to be self-managing, techni-
cal skills, personality characteristics, and personal values are important. These elements
represent or are related to important capabilities. At the interpersonal level, factors such
organizational behavior
The actions of individuals
and groups in an
organizational context.
managing organizational
behavior
Actions focused on
acquiring, developing, and
applying the knowledge
and skills of people.
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.
c01.indd 13c01.indd 13 8/13/10 6:01 PM8/13/10 6:01 PM
14 Chapter 1 A Strategic Approach to Organizational Behavior
Exhibit 1-1 Factors and Outcomes of a Strategic Approach to Organizational
Behavior
Interpersonal Factors
(leadership, communication,
decision-making skill, intra-
and intergroup dynamics,
communication)
Individual Factors
(learning ability,
personality, values,
motivation, stress)
Organizational Factors
(culture, work environments,
adaptability)
Organizational Success
Productivity
of Individuals
and Groups
Satisfaction
of Individuals
and Groups
as quality of leadership, communication within and between groups, and confl ict within
and between groups are noteworthy. These elements infl uence the degree to which the
capabilities of individuals are unleashed and fully utilized within an organization. Finally,
at the organizational level, the culture and policies of the organization are among the most
important factors, as they infl uence whether the talents and positive attitudes of individu-
als are effectively leveraged to create positive outcomes.
The factors discussed above interact to produce the outcomes of productivity, satis-
faction, and organizational success. Productivity refers to the output of individuals and
groups, whereas satisfaction relates to the feelings that individuals and groups have about
their work and the workplace. Organizational success is defi ned in terms of competitive
advantage and ultimately fi nancial performance. In essence, then, a strategic approach to
organizational behavior requires understanding how individual, interpersonal, and orga-
nizational factors infl uence the behavior and value of the people in an organization, where
value is refl ected in productivity, satisfaction, and ultimately the organization’s competi-
tive advantages and fi nancial success.
The Importance of Using a Strategic Lens
Studying organizational behavior with a strategic lens is valuable for managers and aspir-
ing managers at all levels of the organization, as well as for the workers who complete the
basic tasks. For example, effective senior managers spend much of their time talking with
insiders and outsiders about vision, strategy, and other major issues crucial to the direc-
tion of the organization.3 Senior leaders make the strategic decisions for the fi rm.4 Skills in
c01.indd 14c01.indd 14 12/08/10 10:43 AM12/08/10 10:43 AM
The Importance of Using a Strategic Lens 15
conceptualizing, communicating, and understanding the perspectives of others are critical
for these discussions, and these skills are addressed by strategic OB. Senior managers also
spend time helping middle managers to defi ne and redefi ne their roles and to manage
confl ict, because middle managers are often central to the organization’s communication
networks.5 Skills in listening, confl ict management, negotiating, and motivating are cru-
cial for these activities. Finally, senior managers invest effort in shaping the internal norms
and informal practices of the organization (that is, creating and maintaining the culture).
Skill in interpersonal infl uence is an important part of this work. The strategic approach
to OB addresses each of these issues.
In recent times, senior managers have commonly been referred to as strategic leaders.6
However, exercising strategic leadership is not a function of one’s level in the organization;
rather, it is a matter of focus and behavior. Strategic leaders think and act strategically,
and they use the skills noted above to motivate people and build trusting relationships
to help implement the organization’s strategy. Although their primary tasks differ from
senior managers, middle and lower-level managers also can act as strategic leaders in the
accomplishment of their tasks.7
Effective middle managers spend much of their time championing strategic ideas with
senior managers and helping the fi rm to remain adaptive.8 They also play an important
role in implementing the organization’s strategy. They serve as champions of the strategy
and work with other middle managers and lower-level managers to build the processes
and set them in motion to implement the strategy. Skills in networking, communicat-
ing, and infl uencing are important for these aspects of their work. Middle managers also
spend time processing data and information for use by individuals at all levels of the fi rm,
requiring skills in analysis and communication. When delivering the strategic initiatives
to lower-level managers, skills in communicating, motivating, understanding values, and
managing stress are among the most important. A strategic approach to OB addresses each
of these aspects of managerial work.
Effective lower-level managers spend a great deal of their time coaching the fi rm’s
associates—our term for the workers who carry out the basic tasks.9 Skills in teaching,
listening, understanding personalities, and managing stress are among the most impor-
tant for performing these activities. Lower-level managers also remove obstacles for as-
sociates and deal with personal problems that affect their work. Skills in negotiating and
infl uencing others are critical for removing obstacles, whereas skills in counseling and
understanding personalities are important for dealing with personal problems. Finally,
lower-level managers expend effort to design jobs, team structures, and reward systems.
Skills in analysis, negotiating, and group dynamics are among the most important for
these activities. The strategic approach to OB addresses each of these aspects of manage-
rial work.
Lower-level managers will be more effective when they understand the organiza-
tion’s strategy and how their work and that of their associates fi t into the strategy. Much
of what they do is required to implement the strategy. It is also helpful for these manag-
ers to take a longer-term view. If they do not take a strategic approach, many of these
managers are likely to focus on short-term problems. In fact, they may emphasize re-
solving problems without examining how they can prevent them in the future. Taking a
strategic approach enables them to use their skills to prevent problems, implement the
strategy effectively, and complete their current tasks effi ciently while remaining focused
on the future.
associates
The workers who carry
out the basic tasks.
c01.indd 15c01.indd 15 12/08/10 10:43 AM12/08/10 10:43 AM
16 Chapter 1 A Strategic Approach to Organizational Behavior
Despite the relevance of formal study in OB, some people believe that managers can
be successful solely on the basis of common sense. If this were true, fewer organizations
would have diffi culty unleashing the potential of people, and there would be less dissatis-
faction and unhappiness with jobs. Also, if this were true, absenteeism and turnover rates
would be lower. The truth is that fully leveraging the capabilities of people involves subtle-
ties that are complex and diffi cult to manage. 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.
Without meaningful working knowledge of OB, managers’ efforts to be successful
resemble those of the drunkard and his keys. According to this classic story, the drunkard
dropped his keys by the car but could not fi nd them because it was very dark there. So,
instead of bringing light to the appropriate area, he looked under a nearby streetlight
where he could see better!10
Managers in today’s fast-paced organizations cannot afford to adopt the drunkard’s
approach when working with associates and each other, especially not in a challenging
economic environment with signifi cant competition. They must avoid looking for an-
swers where it is easiest to see. Managers are often unsuccessful when they fail to develop
the insights and skills necessary for working with others effectively.
In closing our discussion regarding the importance of understanding organizational
behavior, we focus on the fi ndings of two research studies. In both studies, the investiga-
tors examined the impact of formal business education on skills in information gathering,
quantitative analysis, and dealing with people.11 Signifi cantly, they found that business
education had positive effects on these important skills, including the interpersonal skills of
leadership and helping others to grow. These fi ndings suggest that understanding a strategic
approach to OB can add value to our managerial knowledge and skills. There is no substi-
tute for experience, but formal study can be very helpful in providing important insights
and guidance.
Foundations of a Strategic Approach to
Organizational Behavior
Insights from several disciplines inform our understanding of OB. The fi eld builds on
behavioral science disciplines, including psychology, social psychology, sociology, eco-
nomics, and cultural anthropology. A strategic approach to OB, however, differs from
these disciplines in two important ways. First, it integrates knowledge from all of these
areas to understand behavior in organizations. It does not address organizational phe-
nomena from the limited perspective of any one discipline. Second, it focuses on be-
haviors and processes that help to create competitive advantages and fi nancial success.
Unlike basic social science disciplines, where the goal is often to understand human and
group behavior, the goal of the strategic OB approach is to improve the performance of
organizations.
One might ask the following questions: Can taking courses in psychology, social
psychology, sociology, economics, and cultural anthropology provide the knowledge
needed to be an effective manager or to successfully accept the responsibility of working
as a key member of an organization? Is it necessary to take a course in organizational
behavior?
c01.indd 16c01.indd 16 12/08/10 10:43 AM12/08/10 10:43 AM
The Importance of Using a Strategic Lens 17
Acquiring knowledge directly from other disciplines can inform the study of organi-
zational behavior. Knowledge from other disciplines, however, is not a substitute for the
unique understanding and insights that can be gained from studying OB from a strategic
perspective. As noted earlier, a strategic approach to OB integrates useful concepts from
other disciplines while emphasizing their application in organizations.
Gaining an effective working knowledge of organizational behavior helps those who
want to become successful managers. The following points summarize this important fi eld
of study:
1. There are complexities and subtleties involved in fully leveraging the capabilities
of people. Common sense alone does not equip the manager with suffi cient
understanding of how to leverage human capabilities.
2. Managers must avoid the allure of seeking simple answers to resolve
organizational issues. A working knowledge of OB helps managers gain
the confi dence required to empower associates and work with them to fi nd
creative solutions to problems that arise. The complexity of organizational life
requires that managers and associates perform at high levels to contribute to
organizational success and to achieve personal growth.
3. The strategic approach to OB integrates important behavioral science knowledge
within an organizational setting and emphasizes application. This knowledge
cannot be obtained from information derived independently from other
specialized fi elds (psychology, economics, and the like).
Defi nition of an Organization
As we have already emphasized, OB is focused on organizations and what happens inside
them. This is important, because organizations play an important role in modern society.
Several commentators from Harvard University expressed it this way: “Modern societies
are not market economies; they are organizational economies in which companies are the
chief actors in creating value and advancing economic progress.”12 But what is an organi-
zation? Below we provide a formal defi nition of this term.
Although it is sometimes diffi cult to defi ne the term organization precisely, most peo-
ple agree that an organization is characterized by these features:13
• Network of individuals
• System
• Coordinated activities
• Division of labor
• Goal orientation
• Continuity over time, regardless of change in individual membership
Thus, we defi ne an organization as a collection of individuals, whose members may
change over time, forming a coordinated system of specialized activities for the purpose of
achieving specifi c goals over an extended period of time.
A prominent type of organization is the business organization, such as Intel,
Microsoft, or Procter & Gamble. There are other important types of organizations as well.
Public-sector organizations (e.g., government organizations), for example, have a major
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.
c01.indd 17c01.indd 17 12/08/10 10:43 AM12/08/10 10:43 AM
18 Chapter 1 A Strategic Approach to Organizational Behavior
FPO
EXPERIENCING ORGANIZATIONAL BEHAVIOR
BusinessWeek has ranked Apple as the most innovative company for the past several
years (2007–2009). And, largely
because of Apple’s successful
innovations, Steve Jobs
has been chosen by
Fortune as the CEO
of the decade
(2000–2009).
How hasApple
achieved this
lofty status? The
following state-
ment by Apple
CEO, Steve Jobs
explains, “Inno-
vation has noth-
ing to do with how
many R&D dollars you
have. When Apple came up
with the Mac, IBM was spending at
least 100 times more on R&D. It’s not
about money. It’s about the people you
have, how they’re led, and how much
you get it.” In the early 1990s, Apple
redesigned its workplace for the R&D
associates, providing them both with
private offi ces and also common areas
where they could gather and share
ideas,engage in teamwork, and gen-
erally discuss their research. A former
manager at Apple notes that Apple’s
success is based on empowering its
associates, delegating authority and
responsibility down in the organiza-
tion, and allowing the people a lot of
freedom.
The results are obvious. Busi-
nessWeek describes Apple as the
creative king. For example, to launch
the iPod, Apple’s immensely success-
ful portable music player, it integrated
seven different innovations. It was
able to create these inno-
vations because of
the innovation cul-
ture created at
Apple and the
high-quality
s c i e n t i s t s
and engi-
neers it has
a t t r a c t e d
to the com-
pany. Apple
managers en-
courage and
nurture a sense of
community in which
a passion for creative de-
signs and innovation exists. Apple’s
designs have been described as more
elegant, functional for customers, and
effective than those developed by
competitors. In short, Apple sets the
standard in design. Apple and other
innovative companies are the stars
today and in the future. For example,
Apple’s iPhone has changed the stan-
dard in the wireless communications
industry.
Apple is very careful in the hir-
ing process by recruiting people who
share its values and are passionate
about what they do. In addition, they
provide substantial training to build
their skills and to emphasize the im-
portance of working as a team. Yet,
associates are valued as individuals;
for example, staff associates in the
Apple retail stores have personal
business cards. This approach also
suggests caring and quality to cus-
tomers, not typical of most retail
organizations.
Steve Jobs is a critical compo-
nent of Apple’s success, as suggested
by his selection as the CEO of the
decade. His vision and ability to see
opportunities in future markets where
others see only challenges has helped
Apple rise above competitors and
perform better than most other busi-
nesses in the world. Yet, his vision is
only as good as the creativity and
productivity of Apple’s managers
and associates. Warren Bennis states
it this way, “The real test of exem-
plary leadership … [is in] develop-
ing a deep, talented bench who …
can unite a company and unleash
creativity in their own way.” Michael
Hawley, professional pianist and
computer scientist, says that he thinks
“of Apple as a great jazz orchestra.”
Hawley suggested that Apple has a
talented staff and that the conductor’s
job is largely nominal at this stage.
Creating Innovation: Leading and Managing
the Human Capital at Apple
©
Justin Sullivan/Getty Images, Inc.
© Justin Sullivan/Getty Images, Inc.
c01.indd 18c01.indd 18 12/08/10 10:43 AM12/08/10 10:43 AM
The Role of Human Capital in Creating Competitive Advantage 19
It involves continuing to attract highly
talented members and adding energy
in places where they are needed.
Apple’s performance in the fi rst
decade of the 21st century has been
exceptional. Sales of each of its major
products have increased dramatically
(several of those products were devel-
oped and introduced to the market in
this decade). And the market value of
the company increased by over $250
billion during the decade. Thus, Ap-
ple’s passion for innovation and the
power of its human capital portends
a very bright future for the company.
Sources: A. Lashinsky. 2009. “The Decade of Steve: How Apple’s Imperious, Brilliant CEO Transformed American
Business,” Fortune, Nov. 23, pp. 93–100; “The 50 Most Innovative Companies,” BusinessWeek, at http://bwnt.busi-
nessweek.com/interactive_reports/innovative_50_2009, Nov. 16, 2009; S. Lohr. 2009. “One Day You’re Indispen-
sible, the Next Day …,” New York Times, athttp://www.nytimes.com, Jan. 18; A. Frankel. 2007. “Magic Shop,”
Fast Company, at http://www.fastcompany.com, Dec. 19; J. Scanton. 2007. “Apple Sets the Design Standard,”
BusinessWeek.com, at http://www.businessweek.com, Jan. 8; B. Helm. 2005. “Apple’s Other Legacy: TopDesigners,”
BusinessWeek.com, www.businessweek.com, Sept. 6; R. Enderle. 2004. “Apple’s Competitive Advantage,” TechNews-
World, at http://www.technewsworld.com/story, Mar. 8.
presence in most countries. Although we focus primarily on business fi rms in this book,
the strategic approach to OB applies to the public sector as well as the not-for-profi t sec-
tor. For example, we can discuss motivating associates in the context of business fi rms, but
motivating people is important in all types of organizations. Some organizations may have
more motivational problems than others, but the knowledge of how to motivate workers
is critical for managers in all types of situations.
As explained in the Experiencing Organizational Behavior feature, Apple has achieved
signifi cant success because of its innovations. In turn, Apple’s innovations are due to the
quality associates working in design, its innovation culture, and the way managers lead
by empowering the associates to be creative and develop innovations. Apple’s strategic
leaders (exemplifi ed by its CEO, Steve Jobs) are willing to take risks, and they nurture the
innovation culture. But it also requires strategic leadership to implement Apple’s innova-
tion strategy throughout the company. As noted in the quote by Apple CEO Steve Jobs,
the basic component of Apple’s innovation is its human capital. Thus, Apple invests sig-
nifi cant resources and energy into attracting, holding, and leading effectively high-quality
human capital.
The Role of Human Capital in Creating
Competitive Advantage
We have already noted the importance of human capital and competitive advantage to
strategic OB. We now examine these concepts more closely.
The Nature of Human Capital
An organization’s resource base includes both tangible and intangible resources. Prop-
erty, factories, equipment, and inventory are examples of tangible resources. Historically,
these types of resources have been the primary means of production and competition.14
This is less true today because intangible resources have become critically important
c01.indd 19c01.indd 19 12/08/10 10:43 AM12/08/10 10:43 AM
http://bwnt.busi-nessweek.com/interactive_reports/innovative_50_2009
http://bwnt.busi-nessweek.com/interactive_reports/innovative_50_2009
http://www.nytimes.com
http://www.fastcompany.com
http://www.businessweek.com
www.businessweek.com
http://www.technewsworld.com/story
20 Chapter 1 A Strategic Approach to Organizational Behavior
for organizations to successfully compete in the global economy. Intangible resources,
including the reputation of the organization, trust between managers and associates,
knowledge and skills of associates, organizational culture, brand name, and relationships
with customers and suppliers, are the organization’s nonphysical economic assets that
provide value.15 Such assets are often deeply rooted in a company’s history and experi-
ences, for they tend to develop through day-to-day actions and accumulate over time.16
On a comparative basis, it is more diffi cult to quantify the value of intangible resources
than that of tangible resources, but the importance of intangible resources continues to
increase nonetheless.
Human capital is a critical intangible resource. As a successful business executive re-
cently stated, “Burn down my buildings and give me my people, and we will rebuild the
company in a year. But leave my buildings and take away my people . . . and I’ll have a
real problem.”17 As we highlighted in the opening case, human capital is the sum of the
skills, knowledge, and general attributes of the people in an organization.18 It represents
capacity for today’s work and the potential to exploit tomorrow’s opportunities. Human
capital encompasses not only easily observed skills, such as those associated with oper-
ating machinery or selling products, but also the skills, knowledge, and capabilities of
managers and associates for learning, communicating, motivating, building trust, and
effectively working on teams. It also includes basic values, beliefs, and attitudes.
Human capital does not depreciate in value as it is used, but rather, it is commonly
enhanced through use. Contrast this with tangible resources—for example, manufac-
turing equipment—whose productive capacity or value declines with use. In economic
terms, we can say that human capital does not suffer from the law of diminishing returns.
In fact, increasing returns are associated with applications of knowledge because knowl-
edge tends to expand with use.19 In other words, we learn more as we apply knowledge.
Knowledge, then, is “infi nitely expansible” and grows more valuable as it is shared and
used over time.20
Knowledge has become a critical resource for many fi rms.21 Knowledge plays a key
role in gaining and sustaining an advantage over competitors. Firms that have greater
knowledge about their customers, markets, technologies, competitors, and themselves
can use this knowledge to gain a competitive advantage. Because most knowledge in
organizations is held by the managers and associates, it is important to acquire and
hold a highly knowledgeable workforce to perform well.22 Because of the importance of
knowledge and human capital, fi rms need to invest in continuous development of their
human capital. The goal is to enhance organizational learning and build the knowledge
and skills in the fi rm. In short, fi rms try to acquire and enrich their human capital.23
The importance of human capital and knowledge is explained in the Experiencing
Organizational Behavior on innovation. Apple is able to be a leader in innovation largely
because of its high-quality human capital and the manner in which it empowers its associ-
ates working in design. These associates developed and designed the highly successful iPod
and iPhone, for which major sales have been achieved.
The Concept of Competitive Advantage
A competitive advantage results when an organization can perform some aspect of
its work better than competitors can or when it can perform the work in a way that
competitors cannot duplicate.24 By performing the work differently from and better than
human capital
The sum of the skills,
knowledge, and general
attributes of the people
in an organization.
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.
c01.indd 20c01.indd 20 12/08/10 10:43 AM12/08/10 10:43 AM
The Role of Human Capital in Creating Competitive Advantage 21
competitors, the organization offers products/services that are more valuable for the cus-
tomers.25 For example, Apple developed and marketed the iPod, which took signifi cant
market share from Sony’s previously highly successful Walkman MP3 players. Its iPhone
did the same in the wireless communications market. As noted by the statement by Steve
Jobs, Apple’s CEO, the primary difference in Apple’s ability to create innovation is its
people and how they are led.
Human Capital as a Source of Competitive Advantage
Although human capital is crucial for competitive advantage, not all organizations have
the human resources needed for success. The degree to which human capital is useful for
creating true competitive advantage is determined by its value, rareness, and diffi culty to
imitate.26
Value
In a general sense, the value of human capital can be defi ned as the extent to which indi-
viduals are capable of handling the basic work of an organization. Lawyers with poor legal
training do not add value to a law fi rm because they cannot provide high-quality legal
services. Similarly, individuals with poor skills in painting and caulking do not add value
to a house-painting company.
More directly, human capital value can be defi ned as the extent to which individuals
are capable of producing work that supports an organization’s strategy for competing in
the marketplace.27 In general, business fi rms emphasize one of two basic strategies. The
fi rst involves creating low-cost products or services for the customer while maintaining
acceptable or good quality.28 Buyers at the Closeout Division of Consolidated Stores,
Inc., for example, scour the country to purchase low-cost goods. Their ability to fi nd such
goods through manufacturers’ overruns and discontinued styles is crucial to the success of
Closeout, the largest U.S. retailer of closeout merchandise. The buyers’ skills allow the di-
vision to sell goods at below-discount prices.29 The second strategy involves differentiating
products or services from those of competitors on the basis of special features or superior
quality and charging higher prices for the higher-value goods.30 Ralph Lauren designers,
for example, create special features for which customers are willing to pay a premium.31
Human capital plays an important role in the development and implementation
of these strategies. For example, top managers are generally highly valuable resources
for the fi rm. Their human capital as perceived by investors coupled with the strate-
gic decisions that they make affect the investors’ decisions about whether to invest
in the fi rm.32 Yet, most senior managers’ knowledge and skills become obsolete very
quickly because of the rapidly changing competitive landscape. Thus, these managers
must invest time and effort to continuously enrich their capabilities in order to main-
tain their value to the fi rm.33 Overall, managers must expend considerable effort to
acquire quality human capital and demonstrate to the fi rm’s external constituencies its
value.34
Rareness
Human capital rareness is the extent to which the skills and talents of an organiza-
tion’s people are unique in the industry.35 In some cases, individuals with rare skills are
human capital value
The extent to which individuals
are capable of producing
work that supports an
organization’s strategy for
competing in the marketplace.
human capital rareness
The extent to which the
skills and talents of an
organization’s people are
unique in the industry.
c01.indd 21c01.indd 21 12/08/10 10:43 AM12/08/10 10:43 AM
22 Chapter 1 A Strategic Approach to Organizational Behavior
hired into the organization. Corporate lawyers with relatively rare abilities to reduce
the tensions of disgruntled consumers, programmers with the unusual ability to pro-
duce thousands of lines of code per day with few errors, and house painters who are
exceptionally gifted can be hired from the outside. In other cases, individuals develop
rare skills inside the organization.36 Training and mentoring programs assist in these
efforts.
Sales associates at Nordstrom, an upscale retailer, have several qualities that are
relatively rare in the retailing industry. First, they tend to be highly educated. Nord-
strom explicitly targets college graduates for its entry-level positions. College graduates
are willing to accept these positions because of their interest in retailing as a career,
because managers are commonly drawn from the ranks of successful salespeople, and
because Nordstrom’s strong incentive-based compensation system provides fi nancial
rewards that are much higher than the industry average. Second, sales associates at
Nordstrom have both the willingness and the ability to provide “heroic service.” This
type of service at times extends to delivering merchandise to the homes of custom-
ers, changing customers’ fl at tires, and paying for customers’ parking. Nordstrom’s
culture, which is based on shared values that support exceptional customer service, is
an important driver of heroic service. Some believe that Nordstrom’s culture is more
important to the company’s performance than are its strategy and structure and even
its compensation system.37
Imitability
Human capital imitability is the extent to which the skills and talents of an organiza-
tion’s people can be copied by other organizations.38 A competing retailer, for example,
could target college graduates and use a promotion and compensation system similar to
Nordstrom’s. If many retailers followed this approach, some of the skills and talents at
Nordstrom would be attracted to its competitors in the industry.
The skills and talents most diffi cult to imitate are usually those that are complex
and learned inside a particular organization. Typically, these skills involve tacit knowl-
edge,39 a type of knowledge that people have but cannot articulate. Automobile design-
ers at BMW, the German car manufacturer, cannot tell us exactly how they develop
and decide on effective body designs. They can describe the basic process of styling
with clay models and with CAS (computer-aided styling), but they cannot fully ex-
plain why some curves added to the auto body are positive while others are not. They
just know. They have a feel for what is right.40 As a result, those fi rms that manage
their knowledge effectively can make their skills and capabilities diffi cult to imitate by
competitors.41
The culture of an organization represents shared values, which in turn partially deter-
mine the skills and behaviors that associates and managers are expected to have.42 In some
cases, organizational culture promotes the development and use of diffi cult-to-imitate
skills and behavior. Southwest Airlines, for example, is thought to have a culture that en-
courages people to display spirit and positive attitudes that are valuable, rare, and diffi cult
to duplicate at other airlines. Spirit and attitude result from complex interactions among
people that are challenging to observe and virtually impossible to precisely describe. As-
sociates and managers know the spirit and attitude are there. They cannot, however, fully
explain how they work to create value for customers.43
human capital
imitability
The extent to which the
skills and talents of an
organization’s people can be
copied by other organizations.
c01.indd 22c01.indd 22 12/08/10 10:43 AM12/08/10 10:43 AM
The Role of Human Capital in Creating Competitive Advantage 23
Overall Potential for Competitive Advantage
For human capital to be the basis for sustainable competitive advantage, it must satisfy
all three conditions discussed earlier: it must be valuable for executing an organization’s
strategy, it must be rare in the industry, and it must be diffi cult to imitate. An organization
that hires individuals with valuable but common skills does not have a basis for competi-
tive advantage, because any organization can easily acquire those same skills. As shown in
Exhibit 1-2, the human capital in such an organization can contribute only to competitive
parity; that is, it can make the organization only as good as other organizations but not
better. An organization that hires individuals with valuable and rare skills, or an organiza-
tion that hires individuals with valuable skills and then helps them to develop additional
rare skills, has the foundation for competitive advantage, but perhaps only in the short
run. The organization may not have the foundation for long-term competitive advantage
because other organizations may be able to copy what the organization has done. For long-
term advantage through people, an organization needs human capital that is valuable,
rare, and diffi cult to imitate.44
Although the value, rareness, and low imitability of skills and talents are crucial
for competitive advantage, alone they are not enough. These three factors determine
the potential of human capital. To translate that potential into actual advantage, an or-
ganization must leverage its human capital effectively.45 An organization may have highly
talented, uniquely skilled associates and managers, but if these individuals are not moti-
vated or are not given proper support resources, they will not make a positive contribu-
tion. Thus, sustainable competitive advantage through people depends not only on the
skills and talents of those people, but also on how they are treated and deployed.46 In
the next section, we discuss a general approach for effectively developing and leveraging
Valuable?
No
Yes
Yes
Yes
Rare?

No
Yes
Yes
Performance
Below normal
Normal
Above normal
Above normal
Difficult
to
Imitate?
Supported by
Effective
Management?
Are human resources in the firm . . .


No
Yes
Competitive
Implications
Competitive
Disadvantage
Competitive Parity
Temporary
Competitive
Advantage
Sustained
Competitive
Advantage
Exhibit 1-2 Human Capital and Competitive Advantage
Source: Adapted from J. Barney and P. Wright. 1999. “On Becoming a Strategic Partner,” Human Resource Man-
agement, 37: 31–46.
c01.indd 23c01.indd 23 12/08/10 10:43 AM12/08/10 10:43 AM
24 Chapter 1 A Strategic Approach to Organizational Behavior
MANAGERIAL ADVICE
Originally, businesses were con-cerned with the explosion in social networking tools used
by people inside their organization
(and externally as well). The concerns
focused on staff members spending time
on personal networking to the exclusion
of completing tasks on their jobs. Thus,
managers feared the loss of productiv-
ity. Yet, they began to realize the poten-
tial for the social networking tools such
as Twitter and others. Some of the so-
cial networking tools are more person-
alized (i.e., Facebook is better suited to
individualized interests, perhaps). But,
Twitter holds special promise to further
business-related goals.
Twitter has been promoted to
build brand names, enhance internal
relationships among those who need
to coordinate their tasks, and in build-
ing a broad sense of community within
the organization. Twitter can help
managers to obtain broad inputs for
making decisions and to gain associ-
ates’ commitment to decisions made.
It can also be used to support or even
change the organization’s culture.
Twitter (and other social networking
tools) is also useful to build and main-
tain relationships with customers/cli-
ents. It may even be useful in attracting
new customers for the organizations’
products and services. Managers and
associates can use Twitter to serve as
brand ambassadors. Companies such
as Dell, Whole Foods, JetBlue, Star-
bucks, Popeyes, and Home Depot use
Twitter to further business goals. For
example, JetBlue offers Twitter-based
customer service. Whole Foods uses
Twitter to communicate with custom-
ers, learning more about their tastes
and interests, posting news about new
food podcasts and inviting them to
upcoming company events. Many of
these companies monitor what is said
about them on Twitter. It is a way of
monitoring their brand equity with the
public and especially with customers.
The social networking sites are
popular means of accessing the Inter-
net. For example, more than 150 mil-
lion people use Facebook and about
50 percent of them use it daily. Face-
book achieved more than 1 billion vis-
its monthly in 2009. Facebook is used
in more than 170 countries, suggesting
that social networking is cross cultural
and is a global phenomenon. Recent
research by Nielsen shows that Face-
book is more popular than e-mail as
a communications tool. Social network-
ing now accounts for approximately
10 percent of all time spent on the Inter-
net. Twitter use in 2009 was more than
1,000 percent higher than in 2008.
The top three social networking tools
are Facebook, MySpace, and Twitter.
Thus, companies are trying to har-
ness the power of social networking to
facilitate the productivity of managers
and associates and to promote their busi-
ness brands and goods and services in
the marketplace. Social networking tools
can help to enhance the capabilities of
their human capital.
Leveraging Human Capital with Twitter
and Other Social Networking Tools:
Managing the Tweets
Sources: L. Safko. 2009. “The twitter about twitter.” Fast Company, June 13, at http://www.fastcompany.com; M. Colin
& D. MacMillan. 2009. “Managing the tweets,” BusinessWeek, June 1, pp 20–21; A. Yee. 2009. “Social network
rankings—Who’s hot and who’s not,” Ebizq, April 13, at http://www.ebizq.net; C.D. Marcan. 2009. “10 Twitter tips for
the workplace,” PCWorld, April 12, at http://www.pcworld.com; L. King. 2009. “Put twitter to work,” PCWorld, March
29, at http://www.pcworld.com; M. Gotta. 2009. “Twitter in the workplace,” March 6, at http://mikeg.typepad.com;
J.F.Rayport. 2009. “Social networks are the new web portals,” BusinessWeek, January 21, at http://www.businessweek.
com; J. Owyang. 2009. “A collection of social network stats for 2009,” January 11, at http://www.web-strategist.com;
L.Watrous. 2008. “The role of twitter in business,” November 19, at http://www.brighthub.com; A. Smarty. 2008. “16
Examples of huge brands using twitter for business,” October 7, at http://www.searchenginejournal.com; R. King. 2008.
“How companies use twitter to bolster their brands,” BusinessWeek, September 6, at http://www.businessweek.com.
©AP/Wide World Photos
c01.indd 24c01.indd 24 12/08/10 10:43 AM12/08/10 10:43 AM
http://www.fastcompany.com
http://www.ebizq.net

PCWorld

PCWorld


http://mikeg.typepad.com
http://www.businessweek.com
http://www.businessweek.com
http://www.web-strategist.com
http://www.brighthub.com
http://www.searchenginejournal.com
http://www.businessweek.com
Positive Organizational Behavior 25
human capital. As a prelude, we explore a unique new tool that can be used for leverag-
ing human capital in the workplace, microblogging as a social networking tool in the
Managerial Advice feature.
As suggested in the Managerial Advice, companies are trying to harness the poten-
tial power of social networking tools to facilitate the human capital in the organization
and to increase its productivity. Because of the critical nature of human capital to gain-
ing and maintaining competitive advantages, the countries and companies operating
in them must invest heavily in attracting the best available talent and in developing
managers’ and associates’ capabilities. It is also critical that their capabilities be fully
used. Thus, social networking tools can help to use the skills and capabilities of the
organization’s human capital.
The previous arguments and research underscore the strategic value of human capi-
tal.47 Because of the potential value of human capital to an organization, the way it is man-
aged is critical. We next discuss positive organizational behavior.
Positive Organizational Behavior
Positive organizational behavior grew out of positive organizational psychology, which de-
veloped to avoid focusing on trying to “fi x” what was wrong with people. Rather, positive
organizational behavior focuses on nurturing individuals’ greatest strengths and help-
ing people use them to their and the organization’s advantage.48 Positive OB suggests that
people will likely perform best when they have self-confi dence, are optimistic (hope), and
are resilient.49
People are healthier and more productive if they have a strong self-effi cacy with
regard to the work that they are doing. Thus, managers should try to build associates’
self-effi cacy for the tasks assigned to them. Yet, we know from research that the effects of
self-effi cacy are perhaps more important on average in the United States than in many
other countries.50 In addition to the self-effi cacy of individual associates, recent research
suggests the importance of the effi cacy of teams’ performance. To the extent that a team
believes that it can accomplish its assigned tasks, the team’s performance is likely to be
higher.51
Leaders who practice positive organizational behavior build stronger ties with their
associates and peers.52 Research suggests that more than 25 percent of associates ex-
pressdistrust in their leaders.53 Rebuilding trust after it has dissolved represents a
signifi cant challenge.54 Alternatively, leaders are able to rebuild trust by developing
positive psychological capital among their associates. And when positive psychologi-
cal capital exists within units and organizations, individuals tend to be more highly
motivated and persist longer in trying to achieve goals. Therefore, such units perform
at higher levels.55
Individuals who are managed in a positive manner and who take a personally positive
approach to outperform the other candidates often are healthier mentally and physically.
These people are likely to have a positive self-concept, lead life with a purpose, and have
quality relationships with other people. Such people tend to be healthier, happier, and
more productive and thus usually experience less stress on the job.56 As such, managers
should help their associates to develop positive emotions in themselves and others. It
helps them to develop the means and implement them so as to achieve success within the
organization.57
positive organizational
behavior
An approach to managing
people that nurtures each
individual’s greatest
strengths and helps people
use them to their and the
organization’s advantage.
c01.indd 25c01.indd 25 12/08/10 10:43 AM12/08/10 10:43 AM
26 Chapter 1 A Strategic Approach to Organizational Behavior
Providing leadership that encourages and nurtures positive emotions often requires
the application of emotional intelligence (EI). Persons with strong EI have self-awareness,
possess good social skills, display empathy, have strong motivation, and regulate their own
behavior without the oversight of others (discussed in more depth in Chapter 5).58 Lead-
ers using EI build trusting relationships with their associates, exhibit optimism, and build
associates’ effi cacy by providing the training needed and empowering them to complete
the task without direct oversight.59 The leadership approach using positive OB resembles
high-involvement management, which we discuss next.
High-Involvement Management
High-involvement management requires that senior, middle, and lower-level managers
all recognize human capital as the organization’s most important resource. Sometimes
referred to as “high-performance management” or “high-commitment management,” the
high-involvement management approach involves carefully selecting and training as-
sociates and giving them signifi cant decision-making power, information, and incentive
compensation.60 Combining decision power with important tactical and strategic infor-
mation provides associates with the ability to make or infl uence decisions about how to
complete tasks in ways that create value for the organization. Associates are closer to the
day-to-day activities than are others in the organization, and empowering them through
high-involvement management allows them to use their unique knowledge and skills.61 In
general, empowerment can increase the likelihood that associates will provide maximum
effort in their work, including a willingness to: (1) work hard to serve the organization’s
best interests, (2) take on different tasks and gain skills needed to work in multiple capaci-
ties, and (3) work using their intellect as well as their hands.62
Key Characteristics of High-Involvement Management
Five key characteristics of high-involvement management have been identifi ed. We sum-
marize these characteristics in Exhibit 1-3 and examine them further in the following
discussion.
Selective Hiring
Sound selection systems are the fi rst crucial characteristic of the high-involvement ap-
proach. An organization must select the right people if managers are to delegate authority
and information to associates. Efforts to generate a large pool of applicants and to assess
applicants through rigorous evaluations, including multiple rounds of interviews with
managers and peers, are important in the selection process.63 These efforts help to identify
the most promising candidates while promoting the development of commitment on the
part of the individuals chosen. Individuals selected in the course of thorough processes
often respect the integrity of the organization.
Another important part of the selection process involves examining applicants’ fi t
with the organization’s culture and mission; selecting new hires solely on the basis of
technical skills is a mistake. In situations where most or all of the required technical skills
can be taught by the organization, it is quite acceptable to pay less attention to existing
skills and more attention to cultural fi t (along with the person’s ability to learn the needed
high-involvement
management
Involves carefully selecting and
training associates and giving
them signifi cant decision-
making power, information,
and incentive compensation.
c01.indd 26c01.indd 26 12/08/10 10:43 AM12/08/10 10:43 AM
High-Involvement Management 27
EXHIBIT 1-3 Dimensions of High-Involvement Management
Aspect Description
Selective HiringLarge pools of applicants are built through advertising, word of mouth, and internal
recommendations. Applicants are evaluated rigorously using multiple interviews, tests,
and other selection tools. Applicants are selected on the basis not only of skills but also
of fi t with culture and mission.
Extensive TrainingNew 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 PowerAssociates 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 SharingAssociates 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 newsletters.
Incentive CompensationAssociates are compensated partly on the basis of performance. Individual
performance, team performance, and business performance all may be considered.
skills).64 This is the approach taken by the Men’s Wearhouse. A number of studies show
the impact of cultural fi t on satisfaction, intent to leave the organization, and job per-
formance.65 For example, a study of newly hired auditors in the largest accounting fi rms
in the United States found that lack of fi t with the organizational culture caused dissatis-
faction and lower commitment among these auditors.66 Furthermore, work context can
affect the creative output of individuals so that individuals wishing to use their creative
capabilities are attracted to organizations with cultures that promote the expression of
creativity in work.67 Finally, research suggests that careful selection of new associates
leads to the provision of better customer service that in turn produces higher fi nancial
performance for the fi rm.68
Extensive Training
Training is the second vital component of high-involvement management. Without proper
education and training, new hires cannot be expected to perform adequately.69 And even
when new hires are well trained for a position, it is important to help them build skills and
capabilities beyond those needed in their present position. Furthermore, socialization into
the norms of the organization is an important part of initial training. For existing associ-
ates, ongoing training in the latest tools and techniques is crucial.
Although valid calculations of return on investment for training are diffi cult to make,
several studies reinforce the value of training. One study involving 143 Fortune 1000
c01.indd 27c01.indd 27 12/08/10 10:43 AM12/08/10 10:43 AM
28 Chapter 1 A Strategic Approach to Organizational Behavior
companies reported that training signifi cantly affected productivity, competitiveness, and
employee satisfaction. (Training included job skills, social skills, quality/statistical analysis,
and cross-training in different jobs.)70
Decision Power
The third key dimension of high-involvement management is decision-making
power—providing associates with the authority to make some important decisions
while inviting them to infl uence other decisions. For example, in a mass-production
fi rm, such as Dell Computer, a single associate might have the authority to stop an
entire production line to diagnose and address a quality problem. The associate might
also have the authority, in conjunction with co-workers, to contact a supplier about
quality problems, to schedule vacation time, and to discipline co-workers behaving in
inappropriate ways. Beyond this decision-making authority, an associate might have
signifi cant input to capital expenditure decisions, such as a decision to replace an aging
piece of equipment.
In many cases, decision power is given to teams of associates. In fact, self-managed
or self-directed teams are a central part of most high-involvement systems.71 With regard
to our mass-production example, such a team might include the individuals working on
a particular production line, or it might include individuals who complete similar tasks
in one part of a production line. The tellers in a particular branch bank can operate as a
team, the nurses in a particular hospital unit on a particular shift could be a team, and
junior brokers in an investment banking fi rm might act as a formal team in a particular
area. Teams working in high-involvement contexts often achieve the outcomes desired by
the organization.72
Many studies of decision-making power have been conducted over the years. In gen-
eral, these studies support giving associates bounded authority and infl uence. The study of
Fortune 1000 fi rms discussed earlier assessed the impact of associates’ holding signifi cant
decision power. As with training, the executives in the 143 fi rms reported a positive effect
on productivity, competitiveness, and employee satisfaction.73 Another recent study of
empowering associates found that it enhanced knowledge sharing within and the effi cacy
of teams that in turn increased performance.74
Information Sharing
The fourth characteristic of high-involvement management is information sharing. In
order for associates to make effective decisions and provide useful inputs to decisions
made by managers, they must be properly informed. Furthermore, sharing informa-
tion among team members promotes collaboration, coordination and high team per-
formance.75 Examples of information that could be shared include the fi rm’s operating
results and business plan, costs of materials, costs of turnover and absenteeism, potential
technologies for implementation, competitors’ initiatives, and results and roadblocks in
supplier negotiations. At AES, a Virginia-based power company, so much information
had been shared with associates that the Securities and Exchange Commission (SEC)
identifi ed every employee of the fi rm as an insider for stock-trading purposes. This was
unusual; typically, only those at the top of a fi rm have enough information to be consid-
ered insiders by the SEC.
c01.indd 28c01.indd 28 12/08/10 10:43 AM12/08/10 10:43 AM
High-Involvement Management 29
Incentive Compensation
The fi fth and fi nal dimension of high-involvement management is incentive compensa-
tion. This type of compensation can take many forms, including the following:
• Individual piece-rate systems, where associates are compensated based on the
amount produced or sold
• Individual incentive systems, where associates receive bonuses based on short-
or long-term performance
• Knowledge or skill-based pay, where associates are paid based on the amount
of knowledge or number of skills they acquire
• Profi t sharing, where associates earn bonuses based on company profi ts
• Gain sharing, where associates share in a portion of savings generated from
employee suggestions for improvement
In the study of Fortune 1000 fi rms mentioned earlier, executives indicated that incen-
tive pay positively affected productivity and competitiveness.76
Evidence for the Effectiveness of
High-Involvement Management
Considering the fi ve aspects of high-involvement management as a coherent system,
research evidence supports the effectiveness of the approach. One study, for example,
found this approach to have a positive effect on the performance of steel mini-mills.77 In
this study, 30 U.S. mini-mills were classifi ed as having a control orientation or a com-
mitment orientation. Under the control orientation, employees were forced to comply
with detailed rules, had little decision-making authority or infl uence, received limited
training and information, and had no incentive compensation. Under the commitment
orientation, which closely resembled the high-involvement approach described above,
employees had strong training; information on quality, costs, productivity, and usage
rates of materials; incentive pay; the authority to make decisions regarding workfl ow
scheduling and new equipment; and input into strategic decisions. The mills with com-
mitment systems had lower rates of unused materials, higher productivity, and lower
associate turnover.
In another study, 62 automobile plants around the world were classifi ed as using tra-
ditional mass production or fl exible production.78 Under the traditional mass-production
system, employees did not participate in empowered teams, whereas employees under the
fl exible approach participated in such teams. Companies that used the fl exible system also
offered employees more cross-training in different jobs and opportunities for incentive
compensation. Furthermore, these companies displayed fewer symbols of higher status
for managers (no reserved parking, no separate eating areas, and so on). The plants with
fl exible production had 47.4 percent fewer defects and 42.9 percent greater productivity
than those with traditional production systems.
In a third study, fi rms were drawn from many different industries, ranging from bio-
technology to business services.79 Firms placing strong value on their people had a 79 per-
cent probability of surviving for fi ve years after the initial public offering (IPO), whereas
fi rms placing low value on their people had a 60 percent probability of surviving fi ve years.
c01.indd 29c01.indd 29 12/08/10 10:43 AM12/08/10 10:43 AM
30 Chapter 1 A Strategic Approach to Organizational Behavior
Other studies have shown that high-involvement
systems promote stronger relationships in the work-
place and provide environments where associates and
managers feel empowered. As such, they have higher
jobsatisfaction and productivity. In turn, they service
the organization’s customers effectively to promote high
customer satisfaction.80
Demands on Managers
When a high-involvement approach has all of the charac-
teristics identifi ed above, associates are fully and properly
empowered. High-involvement managers place signifi –
cant value on empowerment because empowered associ-
ates have the tools and support required to create value for
the organization. But managers implementing high-involvement approaches must take
specifi c and calculated actions to promote empowerment. We turn now to a discussion
of the demands a high-involvement approach places on managers.
Because they believe strongly in empowering associates, high-involvement managers
constantly seek to identify situations in which responsibility can be delegated. The intent
is to move decision making to the lowest organization level at which associates have the
information and knowledge required to make an effective decision. Managing through
encouragement and commitment rather than fear and threats, high-involvement manag-
ers respect and value each associate’s skills and knowledge. In addition, effective managers
understand that cultural differences in a diverse workforce challenge them to empower
people in ways that are consistent with their uniqueness as individuals.81 Listening care-
fully to associates and asking questions of them in a genuine attempt to understand their
perspectives demonstrates managerial respect and facilitates attempts to be culturally sen-
sitive. People who feel respected for their values as well as for their skills and knowledge are
motivated to act in a prudent and forthright manner in completing their assigned work.
Over time, empowered, respected associates increase their confi dence in their ability to
help create value for the organization.
Trust between managers and associates is critical in a high-involvement organization.
Managers must trust associates not to abuse their decision power. For their part, associates
must trust managers not to punish them for mistakes when they are trying to do the right
thing for the organization. Furthermore, research has shown that trust between associates
and those formally responsible for their behavior has a positive effect on the organization’s
fi nancial performance. Thus, effective managers invest effort in building and maintaining
trust. In so doing, they dramatically increase their credibility with associates.82 Confi dent
in their abilities as well as their associates’ abilities, high-involvement managers recognize
that they don’t have all the knowledge necessary for the organization to be successful. As
a result, they work with their peers and associates to fi nd solutions when problems arise.83
Managers employing a high-involvement approach to management of their associates ex-
hibit many of the characteristics of a transformational leader (this leadership approach is
discussed in more depth in Chapter 8).84
High-involvement managers think continuously about how human capital can be
used as the foundation for competitive advantage. Is there another way to use our people’s
skills and knowledge to further reduce costs or to more crisply differentiate the products
©iStockphoto
c01.indd 30c01.indd 30 12/08/10 10:43 AM12/08/10 10:43 AM
Organization of the Book 31
we produce? How can the creativity of our empowered associates be used to create more
value for the organization? How can we use information our associates gather through
their work with people outside our organization (such as customers and suppliers) to make
certain we are currently doing things that will allow us to shape the competitive advan-
tages needed to be successful tomorrow? Finding answers to these questions and others
that are unique to a particular organization can lead to long-term success.
As suggested in the Experiencing Organizational Behavior feature, fi rms use their
core strengths to provide value to customers. And core strengths are commonly based
on human capital, which is clearly the case with Pixar. Pixar’s managers and associ-
ates have been critical to the production of ten major animated fi lm successes. Pixar
largely exhibits the characteristics of a high-involvement organization. It empowers its
associates with considerable authority to determine their work projects, schedule, and
how they will complete most of their work. Pixar hires top talent and gains the most
from their capabilities. The freedom it provides its associates, the development of their
skills and the culture promoting a happy, trusting and collaborative atmosphere retain
their services for Pixar over the long term. It has been described as the “corporation of
the future.”85 Pixar’s success suggests why there is now global competition for the best
human capital.86 The Pixar experience suggests the importance of human capital for
all organizations in order to compete effectively in the highly complex and challenging
global economy they face in the current environment.
Organization of the Book
Our objective in this book is to provide managers, aspiring managers, and even individual
contributors with the knowledge they need to perform effectively in organizations, es-
pecially in today’s high-involvement organizations. Essentially, the book offers readers a
working knowledge of OB and its strategic importance. The book has 14 chapters divided
into four parts. The titles of the parts and the topics of the chapters are presented in
Exhibit 1-4, which graphically depicts the model for the book.
As suggested in the exhibit, the strategic approach to OB emphasizes how to manage
behavior in organizations to achieve a competitive advantage. The book unfolds in a logical
sequence. In Part I, The Strategic Lens, we explain the strategic approach to OB(Chapter
1) and then discuss the importance of managing diversity in organizations (Chapter 2)
and describe how organizations must operate in a global context (Chapter 3). In Part II,
Individual Processes, we focus on the individual as the foundation of an organization’s
human capital, emphasizing the development of a sound understanding of individuals and
how they affect each other and the organization’s success. Topics considered include learn-
ing and perception (Chapter 4), personality (Chapter 5), motivation (Chapter 6), and stress
(Chapter 7). In Part III, Groups, Teams, and Social Processes, we examine the effects of
interpersonal processes on individual and organizational outcomes. Specifi c interpersonal
processes include leadership (Chapter 8), communication (Chapter 9), decision making
(Chapter 10), group dynamics (Chapter 11), and confl ict (Chapter 12). Finally, in Part IV,
The Organizational Context, we examine several organization-level processes and phenom-
ena. Using insights from the book’s fi rst three parts, we study organizational design and
culture (Chapter 13) and organizational change (Chapter 14). Overall, the book takes you
on an exciting journey through managerial opportunities and problems related to behavior
in organizations.
c01.indd 31c01.indd 31 12/08/10 10:43 AM12/08/10 10:43 AM
32 Chapter 1 A Strategic Approach to Organizational Behavior
EXPERIENCING ORGANIZATIONAL BEHAVIOR
P ixar is one of the most success-ful and unique organizations in its industry and perhaps
anywhere. It has produced ten major
movie hits, and they are all highly
creative and computer animated. The
highly acclaimed movies include Toy
Story, A Bug’s Life, Monsters Inc, Find-
ing Nemo, The Incredibles, Cars, and
Wall . E, among others. In fact, all of
Pixar’s movies have been successful,
which is an incredible feat. And they
developed these movies in a highly
unique way, not in the tradition of Hol-
lywood. A typical movie involves a
number of free agents in key positions
brought together for a single, albeit
major, movie project. Yet, all of Pixar’s
movies are developed and produced
totally by its in-house staff.
Pixar’s success is due to the in-
credible talent of its managers and
associates and how it manages its
human capital. It begins with a thor-
ough recruiting and careful selection
process. The fi rm searches for people
who are innovative with good com-
munication skills. In fact, the people
in charge of hiring like to fi nd people
who have failed but overcame the
failure. Randy Nelson, the person in
charge of recruiting, explains the rea-
son why these people are attractive to
Pixar, “the core skill of innovators is
error recovery not failure avoidance.”
But identifying and hiring top human
capital is only the fi rst step on the
road to success. Managing this tal-
ent in ways that allow the people to
reach their potential and to be highly
productive in their tasks is highly criti-
cal to Pixar’s success.
Pixar leaders build teams of peo-
ple and expect them to work together
to produce their end product. Every-
one is expected to participate. When
they have problems to solve, they do
it as a team. In fact, all 200 to 250
members of a production group are
encouraged and expected to offer
their ideas. Essentially,
the company produces
team innovations. Pixar
University was created,
and all members of the
organization (artists,
software programmers,
accountants, security
guards) are encouraged
to take courses up to
four hours per week. PU
offers 110 different courses, essen-
tially a complete curriculum on making
fi lms. In these courses, they also learn
to collaborate and to trust each other.
In addition, they build new capabili-
ties and sometimes discover new pas-
sions.
The culture of Pixar emphasizes
teamwork, honesty, communication,
collaboration in an environment where
people can have fun and pursue their
passions. Interdisciplinary learning is
encouraged, creativity is rewarded,
and intensity is prized. Taking risks
is valued. One analyst claimed that
Pixar’s culture “out-Googled Google.”
The end results of the top human capi-
tal and effective management of it has
been a string of hit movies. And the
success has been aided by the abil-
ity of Pixar not only to attract and de-
velop highly talented staff but also to
keep it. Turnover at Pixar is less than
fi ve percent annually.
George Lucas, the legendary fi lm-
maker (creator of Star Wars) founded
Pixar in the 1970s. He sold it to Steve
Jobs in the late 1980s for $10 million.
Jobs sold Pixar to Walt Disney in 2006
for $7.4 billion. When one considers
that the major assets of this company
are a building, some computer equip-
ment, and about 400 people, one can
understand the potential value of ex-
cellent human capital and managing
that talent to gain the most from it.
Pixar: An Organization of Happy,
Innovative People
Sources: G. Adams. 2009. “Pixar: The real toon army,” The Independent, September 23, at http://license.icopyright.net;
C. Kuang. 2009. “Pixar’s approach to HR,” Fast Company, February 8, at http://www.fastcompany.com; E. Catmull.
2008. “How Pixar fosters collective creativity,” Harvard Business Review, September, at http://hbr.harvardbusiness.org;
W.C. Taylor. 2008 “Bill Taylor: Pixar’s blockbuster secrets,” BusinessWeek, July 8, at http://www.businessweek.com;
C. Hawn. 2008. “Pixar’s Brad Bird on fostering innovation,” The GigaOM Network, April 17, at http://www.gigaom.
com; T. Balf. 2007. “Out of juice? Recharge!” Fast Company, December 18, at http://www.fastcompany.com; M. Greer.
2006. “Pixar U and whistling while you work,” The Motley Fool, November 16, at http://www.fool.com.
© CARS (2006) Directed byJohn Lasseter, Photo provided by Buena
VistaPictures/Photofest
c01.indd 32c01.indd 32 12/08/10 10:43 AM12/08/10 10:43 AM
http://license.icopyright.net
http://www.fastcompany.com
http://hbr.harvardbusiness.org
http://www.businessweek.com
http://www.gigaom.com
http://www.gigaom.com
http://www.fastcompany.com
http://www.fool.com
What This Chapter Adds to Your Knowledge Portfolio33
What This Chapter Adds to Your
Knowledge Portfolio
In this chapter, we have examined the strategic importance of organizational behavior to the success
of individuals and organizations. In addition, we have discussed the nature of human capital and
the circumstances under which it can be the source of competitive advantage for an organization.
Finally, we have explored the high-involvement approach to management. To summarize, we have
covered the following points:
• The strategic approach to organizational behavior involves knowledge and application of how
individual, interpersonal, and organizational factors infl uence the behavior and value of an
organization’s people, where value is represented by productivity, satisfaction, and ultimately
the organization’s competitive advantages and fi nancial success.
Exhibit 1-4 Managing Organizational Behavior for Competitive Advantage
The Strategic Lens
A Strategic
Approach to
Organizational
Behavior
Organizational
Diversity
Organizational
Behavior in a
Global Context
Individual
Processes
Learning
and Perception
Personality, Intelligence,
Attitudes, and Emotions
Stress and
Well-Being
Motivation
The Organizational
Context
Organizational
Design and Culture
Organizational
Change
Groups, Teams, and
Social Processes
Leadership
Communication
Groups and Teams
Decision Making
Conflict, Negotiation,
Power, and Politics
c01.indd 33c01.indd 33 12/08/10 10:43 AM12/08/10 10:43 AM
34 Chapter 1 A Strategic Approach to Organizational Behavior
• 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 subject matter
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 fi elds, however, in two important
ways. First, it integrates knowledge from these fi elds,
rather than taking the narrow view of any one of
them. Second, it focuses on behaviors and processes
that help to create competitive advantages and
fi nancial success for the organization. Other fi elds
often adopt the goal of understanding individual and group behavior without also
understanding how such knowledge can contribute to enhancing the performance of
organizations.
• An organization is formally defi ned as a collection of individuals, whose members may
change over time, formed into a coordinated system of specialized activities for the purpose
of achieving certain goals over some extended period of time.
• 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 in the current global economy, 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 set the stage 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-confi dence, are optimistic (hope),
and are resilient. People are healthier and more productive if they have a strong self-effi cacy
with regard to the work that they are doing. Individuals who are managed in a positive
manner and who take a personally positive approach to outperform the other candidates
often are healthier mentally and physically.
• High-involvement management is an important method for developing and leveraging
human capital. This approach has fi ve key components: (1) selective hiring, (2) extensive
?back to the knowledge objectives
1. What is organizational behavior? Why is it important
for managers and aspiring managers to study OB us-
ing a strategic approach? Can the study of a fi eld such
as psychology substitute for a strategic approach to
organizational behavior? Why or why not?
2. What is an organization? What are the defi ning char-
acteristics of an organization?
3. What is human capital? Be specifi c.
4. How does human capital provide the basis for competi-
tive advantage?
5. What is positive organizational behavior and how can
it contribute to associates’ productivity?
6. What are the fi ve characteristics of high-involvement
management? What evidence exists to support the ef-
fectiveness of this approach?
c01.indd 34c01.indd 34 12/08/10 10:43 AM12/08/10 10:43 AM
Building Your Human Capital 35
training, (3) decision power, (4) information sharing, and (5) incentive compensation.
Collectively, these fi ve 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, fi nancial success, and competitiveness.
Key Terms
organizational behavior, p. 13
managing organizational
behavior, p. 13
strategic OB approach, p. 13
associates, p. 15
organization, p. 17
human capital, p. 20
competitive advantage, p. 20
human capital value, p. 21
human capital rareness, p. 21
human capital imitability, p. 22
positive organizational
behavior, p. 25
high-involvement
management, p. 26
Human Resource Management Applications
Recruitment and selection are critical Human Resource Management (HRM) functions because they
provide the human capital necessary to accomplish the work in the organization. The examples of
Apple and Pixar show the importance of human capital to an organization’s success. Organizations
employing high-involvement management use selective hiring practices.
Training is an HRM function designed to help managers and associates increase their knowledge
and to develop new skills and abilities. Pixar University provides a good example of how extensive
training contributes to organization performance. Training may be especially critical to help manag-
ers build the capabilities to understand and apply the techniques of high-involvement management
(e.g., empowering associates).
Compensation is an HRM function that is important to the high-involvement management ap-
proach. In high-involvement management, often some of the managers’ and associates’ compensa-
tion is based on their performance and that of the organization. They may also be paid to acquire
additional knowledge and skills (incentive compensation).
building your human capital
Career Style Inventory
Different people approach their careers in different ways. Some, for example, attempt to obtain
as much power as possible in order to control personal and organizational outcomes. Others em-
phasize hard work and cooperative attitudes. The questionnaire that follows is designed to assess
your tendencies, as well as your beliefs about the approaches of most managers. Following the
questionnaire, we describe four distinct approaches to careers, some of which are more useful in
high-involvement organizations than others.
Instructions
A number of descriptive paragraphs appear below. They describe sets of beliefs or perceptions that
vary among individuals. The paragraphs are divided into four sections: Life Goals, Motivation, Self-
Image, and Relations with Others. Please evaluate each paragraph as follows:
1. Read the paragraph. Taking the paragraph as a whole (using all of the information in
the paragraph, not just one or two sentences), rate the paragraph on a scale from “not
characteristic of me” (1) to “highly characteristic of me” (7). If you are currently a full-time
c01.indd 35c01.indd 35 12/08/10 10:43 AM12/08/10 10:43 AM
36 Chapter 1 A Strategic Approach to Organizational Behavior
student, rate each paragraph on the basis of how you believe you would feel if you were
working full-time in an organization. If you are a part-time student with a career, rate each
paragraph on the basis of how you actually feel.
1 2 3 4 5 6 7
Not
characteristic
of me
Somewhat
characteristic
of me
Generally
characteristic
of me
Highly
characteristic of
me
2. In addition, rate each paragraph in terms of the way you would like to be, regardless of how
you are now. Rate each on a scale from “would not like to be like this” (1) to “would very
strongly like to be like this” (7).
1 2 3 4 5 6 7
I would
not like to be
like this
I would
somewhat like
to be like this
I would
generally like
to be like this
I would very
strongly like
to be like this
3. Finally, rate each paragraph in terms of how descriptive it is of most managers,
from “not at all characteristic of most managers” (1) to “very characteristic of most
managers” (7). In providing this assessment, think about managers with whom you
have worked, managers you have read about or heard about, and managers you have
seen in videos.
1 2 3 4 5 6 7
Not at all
characteristic of
most managers
Somewhat
characteristic of
most managers
Generally
characteristic of
most managers
Very
characteristic of
most managers
Questionnaire
Please be as honest, realistic, and candid as possible in your self-evaluations. Try to accurately de-
scribe yourself, not represent what you think others might want you to say or believe. In general,
individuals do not have high scores on every question.
A. Life Goals
1. I equate my personal success in life with the development and success of the organization
for which I work. I enjoy a sense of belonging, responsibility, and loyalty to an
organization. If it were best for my organization, I would be satisfi ed with my career if I
progressed no higher than a junior- or middle-management level.
How characteristic is this of you (1–7)?________
How much would you like to be like this (1–7)?________
How characteristic is this of most managers (1–7)?________
2. I have two major goals in life: to do my job well and to be committed to my family.
I believe strongly in the work ethic and want to succeed by skillfully and creatively
accomplishing goals and tasks. I also want to be a good family person. Work and family are
equally important.
c01.indd 36c01.indd 36 12/08/10 10:43 AM12/08/10 10:43 AM
Building Your Human Capital 37
How characteristic is this of you (1–7)?________
How much would you like to be like this (1–7)?________
How characteristic is this of most managers (1–7)?________
3. My goal in life is to acquire power and prestige; success for me means being involved in a
number of successful, diverse enterprises. I generally experience life and work as a jungle;
like it or not, it’s a dog-eat-dog world, and there will always be winners and losers. I want to
be one of the winners.
How characteristic is this of you (1–7)?________
How much would you like to be like this (1–7)?________
How characteristic is this of most managers (1–7)?________
4. I tend to view life and work as an important game. I see my work, my relations with others,
and my career in terms of options and possibilities as if they were part of a strategic game
that I am playing. My main goal in life is to be a winner at this game while helping others
to succeed as well.
How characteristic is this of you (1–7)?________
How much would you like to be like this (1–7)?________
How characteristic is this of most managers (1–7)?________
B. Motivation
1. My interest in work is in the process of building something. I am motivated by problems
that need to be solved; the challenge of work itself or the creation of a quality product gets
me excited. I would prefer to miss a deadline rather than do something halfway—quality is
more important to me than quantity.
How characteristic is this of you (1–7)?________
How much would you like to be like this (1–7)?________
How characteristic is this of most managers (1–7)?________
2. I like to take risks and am fascinated by new methods, techniques, and approaches. I want
to motivate myself and others by pushing everyone to the limit. My interest is in challenge,
or competitive activity, where I can prove myself to be a winner. The greatest sense of
exhilaration for me comes from managing a team of people and gaining victories. When
work is no longer challenging, I feel bored and slightly depressed.
How characteristic is this of you (1–7)?________
How much would you like to be like this (1–7)?________
How characteristic is this of most managers (1–7)?________
3. I like to control things and to acquire power. I want to succeed by climbing the corporate
ladder, acquiring positions of greater power and responsibility. I want to use this power to
gain prestige, visibility, and fi nancial success and to be able to make decisions that affect
many other people. Being good at “politics” is essential to this success.
How characteristic is this of you (1–7)?________
How much would you like to be like this (1–7)?________
How characteristic is this of most managers (1–7)?________
4. My interest in work is to derive a sense of belonging from organizational membership and
to have good relations with others. I am concerned about the feelings of people with whom
I work, and I am committed to maintaining the integrity of my organization. As long as the
organization rewards my efforts, I am willing to let my commitment to my organization
take precedence over my own narrow self-interest.
How characteristic is this of you (1–7)?________
How much would you like to be like this (1–7)?________
How characteristic is this of most managers (1–7)?________
c01.indd 37c01.indd 37 12/08/10 10:43 AM12/08/10 10:43 AM
38 Chapter 1 A Strategic Approach to Organizational Behavior
C. Self-Image
1. I am competitive and innovative. My speech and my thinking are dynamic and come in
quick fl ashes. I like to emphasize my strengths and don’t like to feel out of control. I have
trouble realizing and living within my limitations. I pride myself on being fair with others;
I have very few prejudices. I like to have limitless options to succeed; my biggest fears are
being trapped or being labeled as a loser.
How characteristic is this of you (1–7)?________
How much would you like to be like this (1–7)?________
How characteristic is this of most managers (1–7)?________
2. My identity depends on being part of a stable, noteworthy organization. I see myself as a
trustworthy, responsible, and reasonable person who can get along with almost anyone. I’m
concerned about making a good impression on others and representing the organization
well. I may not have as much toughness, aggressiveness, and risk-taking skills as some, but I
make substantial contributions to my organization.
How characteristic is this of you (1–7)?________
How much would you like to be like this (1–7)?________
How characteristic is this of most managers (1–7)?________
3. My sense of self-worth is based on my assessment of my skills, abilities, self-discipline, and
self-reliance. I tend to be quiet, sincere, and practical. I like to stay with a project from
conception to completion.
How characteristic is this of you (1–7)?________
How much would you like to be like this (1–7)?________
How characteristic is this of most managers (1–7)?________
4. I tend to be brighter, more courageous, and stronger than most of the people with whom I
work. I see myself as bold, innovative, and entrepreneurial. I can be exceptionally creative at
times, particularly in seeing entrepreneurial possibilities and opportunities. I am willing to
take major risks in order to succeed and willing to be secretive if it will further my own goals.
How characteristic is this of you (1–7)?________
How much would you like to be like this (1–7)?________
How characteristic is this of most managers (1–7)?________
D. Relations with Others
1. I tend to dominate other people because my ideas are better. I generally don’t like to
work closely and cooperate with others, I would rather have other people working for
me, following my directions. I don’t think anyone has ever really helped me freely; either
I controlled and directed them, or they were expecting me to do something for them in
return.
How characteristic is this of you (1–7)?________
How much would you like to be like this (1–7)?________
How characteristic is this of most managers (1–7)?________
2. My relations with others are generally good. I value highly those people who are
trustworthy, who are committed to this organization, and who act with integrity in the
things that they do. In my part of the organization, I attempt to sustain an atmosphere
of cooperation, mild excitement, and mutuality. I get “turned off ” by others in the
organization who are out for themselves, who show no respect for others, or who get so
involved with their own little problems that they lose sight of the “big picture.”
How characteristic is this of you (1–7)?________
How much would you like to be like this (1–7)?________
How characteristic is this of most managers (1–7)?________
c01.indd 38c01.indd 38 12/08/10 10:43 AM12/08/10 10:43 AM
Building Your Human Capital 39
3. At times, I am tough and dominating, but I don’t think I am destructive. I tend to classify
other people as winners and losers. I evaluate almost everyone in terms of what they can do
for the team. I encourage people to share their knowledge with others, trying to get a work
atmosphere that is both exciting and productive. I am impatient with those who are slower
and more cautious, and I don’t like to see weakness in others.
How characteristic is this of you (1–7)?________
How much would you like to be like this (1–7)?________
How characteristic is this of most managers (1–7)?________
4. My relations with others are generally determined by the work that we do. I feel more
comfortable working in a small group or on a project with a defi ned and understandable
structure. I tend to evaluate others (both peers and managers) in terms of whether they help
or hinder me in doing a craftsman-like job. I do not compete against other people as I do
against my own standards of quality.
How characteristic is this of you (1–7)?________
How much would you like to be like this (1–7)?________
How characteristic is this of most managers (1–7)?________
When you have evaluated each paragraph, follow the instructions below and “score” the
questionnaire.
Scoring Key for Career Style Inventory
To calculate scores for each of the four primary career orientations, add up your scores for indi-
vidual paragraphs as shown below. For example, to obtain your “characteristic of me” score for the
orientation known as “craftsperson,” add your “characteristic of me” scores for paragraph 2 under
Life Goals, paragraph 1 under Motivation, paragraph 3 under Self-Image, and paragraph 4 under
Relations with Others.
Scores can range from 4 to 28. A score of 23 or higher can be considered high. A score of 9 or
lower can be considered low.
Characteristic Would like to Characteristic
of me be like this of most managers
Craftsperson Orientation
Life Goals—Paragraph 2
Motivation—Paragraph 1
Self-Image—Paragraph 3
Relations with Others—Paragraph 4
TOTAL scores for Craftsperson
Company Orientation
Life Goals—Paragraph 1
Motivation—Paragraph 4
Self-Image—Paragraph 2
Relations with Others—Paragraph 2
TOTAL scores for Company Man/Woman
Jungle Fighter Orientation
Life Goals—Paragraph 3
Motivation—Paragraph 3
Self-Image—Paragraph 4
Relations with Others—Paragraph 1
TOTAL scores for Jungle Fighter
c01.indd 39c01.indd 39 12/08/10 10:43 AM12/08/10 10:43 AM
40 Chapter 1 A Strategic Approach to Organizational Behavior
Strategic Game Orientation
Life Goals—Paragraph 4
Motivation—Paragraph 2
Self-Image—Paragraph 1
Relations with Others—Paragraph 3
TOTAL scores for Gamesman/
Gameswoman
Descriptions of the Four Primary Career Orientations
• The Craftsperson, as the name implies, holds traditional values, including a strong work ethic,
respect for people, concern for quality, and thrift. When talking about work, such a person
tends to show an interest in specifi c projects that have a defi ned structure. He or she sees
others, peers as well as managers, in terms of whether they help or hinder the completion of
work in a craftsman-like way.
The virtues of craftspersons are admired by almost everyone. In high-involvement
organizations, craftspersons are valuable because they respect people and work hard and smart.
On the downside, they can become overly absorbed in perfecting their projects, which can slow
them down and harm their leadership on a broader stage.
• The Jungle Fighter lusts for power. He or she experiences life and work as a jungle where
“eat or be eaten” is the rule and the winners destroy the losers. A major part of his or
her psychic resources is budgeted for a personal department of defense. Jungle fighters
tend to see their peers as either accomplices or enemies and their associates as objects to
be used.
There are two types of jungle fi ghters: lions and foxes. The lions are the conquerors who,
when successful, may build an empire. The foxes make their nests in the corporate hierarchy
and move ahead by stealth and politicking. The most gifted foxes rise rapidly by making use
of their entrepreneurial skills. In high-involvement organizations, jungle fi ghters can cause
many problems. They tend not to value people. Leveraging human capital may take place,
but only in limited ways for the purpose of self-gain.
• The Company Man or Woman bases personal identity on being part of a protective organization.
He or she can be fearful and submissive, seeking security even more than success. These are
not positive attributes for high-involvement organizations. On the other hand, the company
man or woman is concerned with the human side of the company, interested in the feelings
of people, and committed to maintaining corporate integrity. The most creative company
men and women sustain an atmosphere of cooperation and stimulation, but they tend to lack
the daring to lead in competitive and innovative organizations.
• The Strategic Gamesman or Gameswoman sees business life in general, and his or her career
in particular, in terms of options and possibilities, as if he or she were playing a game.
Such a person likes to take calculated risks and is drawn to new techniques and methods.
The contest is invigorating, and he or she communicates enthusiasm, energizing peers
and associates like the quarterback on a football team. Unlike the jungle fi ghter, the
gamesman or gameswoman competes not to build an empire or to pile up riches, but to
gain the exhilaration of victory. The main goal is to be known as a winner, along with the
rest of the team.
The character of a strategic gamesman or gameswoman, which might seem to be a
collection of near paradoxes, is very useful in a high-involvement organization. Such a person
is cooperative but competitive, detached and playful but compulsively driven to succeed, a
team player but a would-be superstar, a team leader but often a rebel against bureaucratic
hierarchy, fair and unprejudiced but contemptuous of weakness, tough and dominating
c01.indd 40c01.indd 40 12/08/10 10:43 AM12/08/10 10:43 AM
An Organizational Behavior Moment 41
After earning a business degree with a major in marketing, Ann
Wood went to work for Norwich Enterprises as a research ana-
lyst in the Consumer Products Division. While working, she
also attended graduate school at night, receiving her MBA in
three years. Within a year of reaching that milestone, Ann was
promoted to manager of market research. Ann became assistant
director of marketing after another three years. After a stay of
slightly less than 24 months in that position, Ann was appointed
director of marketing for the Consumer Products Division. In
this new role, she leads many more people than in her previous
roles—85 in total across three different groups: market research,
marketing strategy and administration, and advertising and pub-
lic relations.
Ann felt good this morning, ready to continue working on
several important projects that Anil Mathur, Norwich’s executive
vice president for marketing, had assigned to her. Ann felt that
she was on a fast track to further career success and wanted to
continue performing well. With continuing success, she expected
an appointment in Norwich’s international business operations
in the near future. Ann was pleased about this prospect, as in-
ternational experience was becoming a prerequisite at Norwich
for senior-level managerial positions—her ultimate goal. Several
problems, however, were brought to her attention on what she
thought was going to be a good day at the offi ce.
As Ann was entering the building, Joe Jackson, the current
manager of the market research group, stopped her in the hall
and complained that the company’s intranet had been down
about half of the night. This technical problem had prevented
timely access to data from a central server, resulting in a delay in
the completion of an important market analysis. Ann thought
that immediately jumping in to help with the analysis would
be useful in dealing with this matter. She had promised Anil
that the analysis would be available to him and other upper-
level managers this morning. Now it would have to be fi nished
on a special priority basis, delaying work on other important
projects.
Joe also told Ann that two of his analysts had submitted their
resignations over the last 24 hours. Ann asked, “Why are we hav-
ing so much trouble with turnover?” The manager responded, “The
market is tight for smart analysts who understand our product lines.
We’ve been having problems hiring anyone with the skills we need,
much less people who have any loyalty. Maybe we should offer
higher starting salaries and more attractive stock options if we expect
to have much hope of keeping the people we need.” Ann asked Joe
to develop a concrete proposal about what could be done to reduce
turnover, promising to work with him to resolve the issue.
Just as she reached her offi ce, Ann’s phone rang. It was
Brooke Carpenter, the manager of market strategy and adminis-
tration. “I’m glad you’re here, Ann. I need to talk to you now. I’m
on my way.” As Brooke came through the door, Ann could tell
that he was quite upset. He explained that two of his people had
discovered through searches on the Internet that the average pay
for their type of work was 7 percent higher than what they were
currently earning. Sharing this information with co-workers had
created an unpleasant environment in which people were concen-
trating on pay instead of focusing on tasks to be completed. Ann
had a conference call coming in a few minutes, stopping her from
dealing with the matter further, but she asked Brooke to set up
a time when the two of them could meet with his people to talk
about their concerns.
After her conference call, Ann spent the rest of her morning
dealing with e-mails that were primarily related to dissatisfaction
with her department’s work. Most of these concerned the delays
that other Norwich units were experiencing in receiving outputs
from her department. The problem was complicated by the in-
ability to retain workers.
Ann had just returned from lunch when her phone rang.
“Ann, it’s Brooke. Can you meet with us at 2:30 this afternoon? I
know that this is short notice, but we really do need to talk with
my people.” Although the time was inconvenient, given that Anil
expected his analysis today, Ann knew that dealing with issues
concerning Brooke’s associates was also important. Plus, she be-
lieved that Anil’s report was about to be fi nished by the research
group, taking that immediate problem off her plate.
The meeting with Brooke and his people lasted almost an
hour. Not surprisingly, other concerns surfaced during the con-
versation. Ann thought to herself that this was to be expected.
Her managerial experience indicated that complaints about pay
an organizational behavior moment
All in a Day’s Work
but not destructive. Balancing these issues is important in a team-oriented organization,
where associates and managers at all levels are expected to work together for personal and
organizational success.
Source: Adapted from Experiences in Management and Organizational Behavior, 4th ed. (New York: John Wiley &
Sons, 1996). Original instrument developed by Roy J. Lewicki.
c01.indd 41c01.indd 41 12/08/10 10:43 AM12/08/10 10:43 AM
42 Chapter 1 A Strategic Approach to Organizational Behavior
often masked concerns about other issues. She learned that people
weren’t satisfi ed with the technology made available to them to
do their work or Norwich’s commitment to training and devel-
opment. Young and eager to advance, Brooke’s associates wanted
assurances from Ann that Norwich would spend more money and
time to develop their skills. Ann agreed to the importance of skill
development—both for associates and for Norwich. She said that
she would examine the matter and provide feedback to them. “It
may take some time, but my commitment to you is that I’ll work
hard to make this happen. While I can’t promise much about the
pay structure overnight, I’ll also investigate this matter to become
more informed. Brooke and I will work on this together so you
can have direct access to what is going on.” Ann wanted to deal
with these issues, knowing that their resolution had the potential
to help both associates and the company reach their goals.
Ann then spent a couple of hours dealing with still moree-mail
messages, a few phone calls, and other requests that reached her desk
during the day. Anil received the report he needed and seemed to
be satisfi ed. Although she had been busy, Ann felt good as she left
for home around 8:30 that night. Nothing came easily, she thought.
Discussion Questions
1. Describe the people-related problems or issues Ann Wood
faced during the day. Did she handle these effectively? If not,
what do you believe she should have done?
2. Is Ann Wood a high-involvement manager? If so, provide
evidence. If not, how well do you think she’ll perform in her
new job as head of marketing?
3. Assume that Ann Wood wants her managers and associates
to be the foundation for her department’s competitive ad-
vantages. Use the framework summarized in Exhibit 1-2 (in
the chapter text) to assess the degree to which Ann’s people
are a source of competitive advantage at this point in time.
team exercise
McDonald’s: A High-Involvement Organization?
One experience most people in North America and Europe have shared is that of dining in the ham-
burger establishment known as McDonald’s. In fact, someone has claimed that thirtieth-century ar-
cheologists may dig into the ruins of our present civilization and conclude that twenty-fi rst-century
religion was devoted to the worship of golden arches.
Your group, Fastalk Consultants, is known as the shrewdest, most insightful, and mostoverpaid
management consulting fi rm in the country. You have been hired by the president of McDonald’s
to make recommendations for improving the motivation and performance of personnel in their
franchise operations. Some of the key activities in franchise operations are food preparation, order-
taking and dealing with customers, and routine clean-up operations.
The president of McDonald’s must always be concerned that his company’s competitors, such
as Burger King, Wendy’s, Jack in the Box, Dunkin’ Donuts, various pizza establishments, and others,
have the potential to make heavy inroads into McDonald’s market. Thus, he hired a separate mar-
ket research fi rm to investigate and compare the relative merits of the sandwiches, french fries, and
drinks served by McDonald’s and the competitors and asked the market research fi rm to assess the
advertising campaigns of the competitors. Hence, you will not be concerned with marketing issues,
except as they may affect employee behavior. The president wants you to evaluate the organization’s
franchises to determine their strengths and weaknesses of how they manage their associates hoping
their work will be productive. He is very interested in how the restaurants’ management approach
compares to high-involvement management and the impact on theirapproach on McDonald’s.
The president has established an unusual contract with you. He wants you and your colleagues
in the fi rm to make recommendations based on your observations as customers. He does not want
you to do a complete analysis with interviews, surveys, or behind-the-scenes observations.
STEPS
1. Assemble into groups of four to fi ve. Each group will act as a separate Fastalk consulting team.
2. Think about your past visits to McDonald’s. What did you see and experience? How was the
food prepared and served? What was the process? Did the employees seem to be happy with
c01.indd 42c01.indd 42 12/08/10 10:43 AM12/08/10 10:43 AM
Endnotes 43
their work? Did they seem to be well trained and well suited for the work? Did the supervisor
act as a coach or a superior? Your instructor may ask you to visit a McDonald’s in preparation
for this exercise and/or to research the organization via the Internet or school library.
3. Assess McDonald’s on each dimension of high-involvement management.
4. Develop recommendations for the president of McDonald’s.
5. Reassemble as a class. Discuss your group’s assessments and recommendations with the rest of
the class, and listen to other groups’ assessments. Do you still assess McDonald’s in the same
way after hearing from your colleagues in the class?
6. The instructor will present additional points for consideration.
Source: Adapted from Experiences in Management and Organizational Behavior, 4th ed. (New York: John Wiley &
Sons, 1996). Original version developed by D.T. Hall and F.S. Hall.
Endnotes
1. Wang, H.C., He, J. & Mahoney, J.T. 2009. Firm-specifi cknowledge
resources and competitive advantage: The roles ofeconomic- and
relationship-based employee governance mechanisms. Strategic
Management Journal, 30: 1265–1285.
2. Holcomb, T.R., Holmes, R.M. & Connelly, B.L., 2009. Mak-
ing the most of what you have: Managerial ability as a source of
resource value creation. Strategic Management Journal, 30: 457–
485; Athey, R. 2008. It’s 2008: Do you know where your talent is?
Connecting people to what matters. Journal of Business Strategy,
29 (4): 4–14; ; Barney, J.B. 1991. Firm resources and sustained
competitive advantage. Journal of Management, 17: 99–120; Hitt,
M.A., & Ireland, R.D. 2002. The essence of strategic leadership:
Managing human and social capital. Journal of Leadership and
Organizational Studies, 9: 3–14.
3. Ling, Y., Simsek, Z., Lubatkin, M.H. & Veiga. J.F. 2008. Trans-
formational leadership’s role in promoting corporate entrepre-
neurship: Examining the CEO=TMT interface, Academy of
Management Journal, 51: 557–576; Kor, Y.Y. 2006. Direct and
interaction effects of top management team and board composi-
tions on R&D investment strategy. Strategic Management Journal,
27: 1081–1099; Heifetz, R.A., & Laurie, D.L. 1997. The work
of the leader. Harvard Business Review, 75(1): 124–134; Ireland,
R.D., & Hitt, M.A. 1999. Achieving and maintaining strategic
competitiveness in the 21st century: The role of strategic leader-
ship. Academy of Management Executives, 13(1): 43–57.
4. Adegbesan, J.A. 2009. On the origins of competitive advantage:
Strategic factor markets and heterogeneous resource complemen-
tarity. Academy of Management Review, 34: 463–475; Elbanna,
S., & Child, J. 2007. Infl uences on strategic decision effective-
ness:Development and test of an integrative model. Strategic
Management Journal, 28: 431–453.
5. Cocks, G. 2009. High performers down under: Lessons from
Australia’s winning companies. Journal of Business Strategy,
30 (4): 17–22; Pappas, J.M., & Woolridge, B. 2007. Middle
managers divergent strategic activity: An investigation of multiple
measures of network centrality. Journal of Management Studies, 44:
323–341.
6. Finklestein, S., Hambrick, D.C., & Cannella, A.A. 2008. Strategic
leadership: Top executives and their effects on organizations. New York:
Oxford University Press.
7. Hitt, M.A., Black, S., & Porter, L. 2008. Management. Upper
Saddle River, NJ: Prentice Hall.
8. Pappas & Woolridge. Middle managers divergent strategic ac-
tivity; Huy, Q.N. 2001. In praise of middle managers. Harvard
Business Review, 76(8): 73–79; Sethi, D. 1999. Leading from the
middle. Human Resource Planning, 22(3): 9–10.
9. Manz, C., & Neck, C.P. 2007. Mastering self leadership. Upper
Saddle River, NJ: Prentice Hall.
10. Faris, G.F. 1969. The drunkard’s search in behavioral science.
Personnel Administration, 32(1): 11–18.
11. Boyatzis, R.E., Baker, A., Leonard, L., Rhee, K., & Thompson,
L. 1995. Will it make a difference? Assessing a value-added, out-
come-oriented, competency-based professional program. In R.E.
Boyatzis, S.S. Cowan, & D.A. Kolb (Eds.), Innovation in professional
education: Steps on a journey from teaching to learning. SanFrancisco:
Jossey-Bass; Kretovics, M.A. 1999. Assessing the MBA: What
do our students learn? The Journal of ManagementDevelopment,
18: 125–136.
12. Ghoshal, S., Bartlett, C.A., & Moran, P. 1999. A new manifesto
for management. Sloan Management Review, 40(3): 9–20.
13. Etzioni, A. 1964. Modern organizations. Englewood Cliffs, NJ:
Prentice Hall.
14. Dess, G.G., & Picken, J.C. 1999. Beyond productivity: How
leading companies achieve superior performance by leveraging their
human capital. New York: AMACOM.
15. Sirmon, D.G., & Hitt, M.A. 2009. Contingencies within dy-
namic managerial capabilities: Interdependent effects of resource
investment and deployment on fi rm performance. Strategic Man-
agement Journal, 30: 1375–1394; Six, F., & Sorge, A. 2008. Creat-
ing a high-trust organization: An exploration into organizational
policies that stimulate interpersonal trust building. Journal of
Management Studies, 45: 857–884; Dickson, G.W., & DeSanctis,
G. 2001. Information technology and the future enterprise. Upper
Saddle River, NJ: Prentice Hall.
c01.indd 43c01.indd 43 12/08/10 10:43 AM12/08/10 10:43 AM
44 Chapter 1 A Strategic Approach to Organizational Behavior
16. Hitt, M.A., Ireland, R.D., & Hoskisson, R.E. 2011. Strategic
management: Competitiveness and globalization. Mason, OH:
South-Western Cengage Learning.
17. Nelson, M.C. 2000. Facing the future: Intellectual capital of our
workforce. Vital Speeches of the Day, December 15: 138–143.
18. Dess & Picken, Beyond productivity; Hitt, Ireland, & Hoskisson,
Strategic management.
19. Day, J.D., & Wendler, J.C. 1998. The new economics of the or-
ganization. The McKinsey Quarterly, 1998 (1): 4–17.
20. Dess & Picken, Beyond productivity.
21. McGee, J., & Thomas, H. 2007, Knowledge as a lens on the
jigsaw puzzle of strategy. Management Decision, 45: 539–563.
22. Dragoni. L., Tesluk, P.E., Russell, J.A. & Oh, I.-S. 2009.
Understanding managerial development: Integrating developmen-
tal assignments, learning orientation, and access to developmental
opportunities in predicting managerial competencies, Academy
of Management Journal, 52: 731–743; McGee, J., & Thomas,
H. 2007, Knowledge as a lens on the jigsaw puzzle of strategy.
Management Decision, 45: 539–563.
23. Salk, J., & Lyles, M.A. 2007. Gratitude, nostalgia and what
now? Knowledge acquisition and learning a decade later. Jour-
nal ofInternational Business Studies, 38: 19–26; Gupta, A.K.,
Smith, K.G., & Shalley, C.E. 2006. The interplay between
exploration and exploitation. Academy of Management Journal,
49: 693–706.
24. Porter, M.E. 1980. Competitive strategy. New York: Free Press;
Porter, M.E. 1985. Competitive advantage. New York: Free Press.
25. Sirmon, D.G., Hitt, M.A., & Ireland, R.D. 2007. Managing fi rm
resources in dynamic environments to create value: Looking in-
side the black box. Academy of Management Review, 32: 273–292.
26. Our discussion of the value, rare, and nonimitable terms draws
signifi cantly from: Barney, J.B., & Wright, P.M. 1998. On be-
coming a strategic partner: The role of human resources in gain-
ing competitive advantage. Human Resource Management, 37:
31–46.
27. Barney, J.B., & Clark, D.N. 2007. Resource-based theory:Creating
and sustaining competitive advantage. New York: OxfordUniversity
Press; Barney, Firm resources and sustainedcompetitive advan-
tage; Barney & Wright, On becoming a strategic partner; Lepak,
D.P., & Snell, S.A. 1999. The human resourcearchitecture:
Toward a theory of human capital allocation anddevelopment.
Academy of Management Review, 24: 31–48.
28. Porter, Competitive strategy.
29. Hitt, Ireland, & Hoskisson, Strategic management.
30. Porter, Competitive strategy.
31. Hitt, Ireland, & Hoskisson, Strategic management.
32. Smith, W.S. 2009. Vitality in business: Executing a new strategy
at Unilever. Journal of Business Strategy, 30 (4): 31–41;Higgins,
M.C., & Gulati, R. 2006. Stacking the deck: The effects of
top management backgrounds on investor decisions. Strategic
Management Journal, 27: 1–25.
33. Henderson, A.D., Miller, D., & Hambrick, D.C. 2006. How
quickly do CEOs become obsolete? Industry dynamism, CEO
tenure, and company performance. Strategic Management Journal,
27: 447–460.
34. Ployhart, R.E. 2006. Staffi ng in the 21st century: New challenges
and strategic opportunities. Journal of Management, 32: 868–897.
35. Newbert, S.L. 2007. Empirical assessments of the resource-based
view of the fi rm: An assessment and suggestions for future re-
search. Strategic Management Journal, 28: 121–146; Barney &
Wright, On becoming a strategic partner; Lepak & Snell, The
human resource architecture.
36. Laamanen, T. & Wallin, J. 2009. Cognitive dynamics of capabil-
ity development paths. Journal of Management Studies, 46: 950–
981.
37. Pfeffer, J. 1994. Competitive advantage through people: Unleashing
the power of the work force. Boston: Harvard Business School Press.
38. Barney & Wright, On becoming a strategic partner.
39. Ibid.
40. Bangle, C. 2001. The ultimate creativity machine: How BMW
turns art into profi t. Harvard Business Review, 79(1): 47–55.
41. Bogner, W.C., & Bansal, P. 2007. Knowledge management as
the basis of sustained high performance. Journal of Management
Studies, 44: 165–188.
42. Tsui, A.S., Wang, H., & Xin, K.R. 2006. Organizational culture
in China: An analysis of culture dimensions and culture types.
Management and Organization Review, 2: 345–376.
43. Pfeffer, Competitive advantage.
44. Barney & Wright, On becoming a strategic partner.
45. Sirmon, D.G., Gove, S. & Hitt, M.A. 2008. Resource man-
agement in dyadic competitive rivalry: The effects of resource
bundling and deployment. Academy of Management Journal, 51:
918–935; Sirmon, Hitt, & Ireland, Managing fi rm resources in
dynamic environments to create value.
46. Sirmon & Hitt, Contingencies within dynamic managerial capa-
bilities; Bowman, C., & Swart, J. 2007. Whose human capital?
The challenge of value capture when capital is embedded. Journal
of Management Studies, 44: 488–505.
47. Collins, C.J., & Smith, K.G. 2006. Knowledge exchange and
combination: The role of human resource practices in the per-
formance of high-technology fi rms. Academy of Management
Journal, 49: 544–560; Reed, K.K., Lubatkin, M., & Srinivasan,
N. 2006. Proposing and testing an intellectual capital-based
view of the fi rm. Journal of Management Studies, 43: 867–893.
48. West, B.J., Patera, J.L. & Carsten, M.K. 2009. Team-level posi-
tivity: Investigating positive psychological capacities and team
level outcomes. Journal of Organizational Behavior, 30: 249–
267; Luthans, F. 2002. The need for and meaning of positive
organizational behavior. Journal of Organizational Behavior, 23:
695–706.
49. Avey, J.B. Luthans, F. & Smith, R.M. 2010. Impact of psy-
chological capital on employee well-being over time. Journal of
Occupational Health Psychology,15: 17–28.
50. Luthans, F. 2006. The impact of effi cacy on work attitudes across
cultures. Journal ofWorld Business, 41: 121–132.
51. Gibson, C.B., & Earley, P.C. 2007. Collective cognition in
action: Accumulation, interaction, examination, and accom-
modation in the development and operation of group effi cacy
beliefs in the workplaces. Academy of Management Review, 32:
438–458.
c01.indd 44c01.indd 44 12/08/10 10:43 AM12/08/10 10:43 AM
Endnotes 45
52. Walumbwa, F.O., Luthans, F, Avey, J.B. & Oke, A. 2009. Au-
thentically leading groups: The mediating role of collective
psychological capital and trust. Journal of Organizational Behavior,
30: 1–21.
53. Keyton, J. & Smith, F.L. 2009. Distrust in leaders: Dimensions,
patterns and emotional intensity. Journal ofLeadership and Or-
ganizational Studies, 16: 6–18; Luthans, F. & Avolio, B.J. 2009.
The point of positive organizational behavior. Journal of Organi-
zational Behavior, 30: 291–307.
54. Gillespie, N., & Dietz, G. 2009. Trust repair after an
organization-level failure. Academy of Management Review, 34:
127–145.
55. Gooty, J., Gavin, M. Johnson, P.D., Frazier, M.L., & Snow, D.B.
2009. In the eyes of the beholder: Transformational leadership,
positive psychological capital and performance. Journal ofLeader-
ship and Organizational Studies, 15: 353–367.
56. Cooper, C.L., Quick, J.C. & Schabracq, M.J. 2010. Epilogue.
In C.L. Cooper, J.C. Quick & M.J. Schabracq (Eds.), Work
and health psychology: The handbook. Hoboken, NJ: John Wiley
& Sons; Quick, J.C., Macik-Frey, M., & Cooper, C.L. 2007.
Managerial dimensions of organizational slack. Journal of Man-
agement Studies, 44: 189–205.
57. Fineman, S. 2006. On being positive: Concerns and counter-
points. Academy of Management Review, 31: 270–291.
58. Goleman, D. 2004. What makes a leader? Harvard Business
Review, 82 (January): 82–91.
59. McKee, A., & Massimillian, D. 2006. Resonant leadership: A
new kind of leadership for the digital age. Journal of Business Strat-
egy, 27(5): 45–49.
60. The fi ve aspects of high-commitment management that are used
in this book are the most commonly mentioned aspects. See,
for example, the following: Arthur, J.B. 1994. Effects of human
resource systems on manufacturing performance and turnover.
Academy of Management Journal, 37: 670–687; Becker, B., &
Gerhart, B. 1996. The impact of human resource management
on organizational performance: Progress and prospects. Academy
of Management Journal, 39: 779–801; Guthrie, J.P. 2001. High-
involvement work practices, turnover, and productivity: Evi-
dence from New Zealand. Academy of Management Journal, 44:
180–190; MacDuffi e, J.P. 1995. Human resource bundles and
manufacturing performance: Organizational logic and fl exible
production systems in the world auto industry. Industrial and La-
bor Relations Review, 48: 197–221; Pfeffer, The human equation;
Pfeffer, J., & Veiga, J.F. 1999. Putting people fi rst for organiza-
tional success. Academy of Management Executive, 13(2): 37–48.
61. Zatzick, C.D., & Iverson, R.D. 2006. High-involvement
management and workforce reduction: Competitive advan-
tage or disadvantage. Academy of Management Journal, 49:
999–1015.
62. Takeuchi, R, Chen, G. & Lepak, D.P., 2009. Through the
looking glass of a social system: Cross-level effects of high-
performance work systems on employees’ attitudes. Personnel
Psychology, 62: 1–29; Baron, J.N., & Kreps, D.M. 1999. Strategic
humanresources: Frameworks for general managers. New York: John
Wiley & Sons.
63. Ployhart, Staffi ng in the 21st century; Pfeffer, The human
equation; Pfeffer & Veiga, Putting people fi rst for organizational
success.
64. Ibid.
65. For example, see Erdogan, B., Liden, R.C., & Kraimer, M.L.
2006. Justice and leader-member exchange: The moderating role
of organizational culture, Academy of Management Journal, 49:
395–406.
66. O’Reilly, C.A., Chatman, J., & Caldwell, D.F. 1991. People and
organizational culture: A profi le comparison approach to assess-
ing person-organization fi t. Academy of Management Journal, 34:
487–516.
67. Perry-Smith, J.E. 2006. Social yet creative: The role of social
relationships in facilitating individual creativity. Academy of
Management Journal, 49: 85–101.
68. Van Iddekinge, C.H., Ferris, G., Perrewe, P., Perryman, A., Blass,
F.R. & Thomas, D. 2009. Effects of selection and training on
unit-level performance over time: A latent growth modelling
approach. Journal of Applied Psychology, 94: 829–843.
69. Ng, T.W.H., & Feldman, D.C. 2009. How broadly does edu-
cation contribute to job performance? Personnel Psychology, 62:
89–134.
70. Lawler, E.E., Mohrman, S.A., & Benson, G. 2001. Organizing
for high performance: Employee involvement, TQM, reengineering,
and knowledge management in the Fortune 1000. San Francisco:
Jossey-Bass.
71. Manz & Neck, Mastering self leadership; Pfeffer, The human
equation; Pfeffer & Veiga, Putting people fi rst for organizational
success.
72. Hulsheger, U.R., Anderson, N. & Salgado, J.F. 2009. Team-level
predictors of innovation at work: Acomprehensive meta-analysis
spanning three decades of research. Journal of Applied Psychology,
94: 1126–1145.
73. Lawler, Mohrman, & Benson, Organizing for high performance.
74. Srivastava, A., Bartol, K.M., & Locke, E.A., 2006. Empowering
leadership in management teams: Effects on knowledge sharing,
effi cacy and performance. Academy of Management Journal, 49:
1239–1251.
75. Mesmer-Mangus, J.R. & DeChurch, L.A. 2009. Informa-
tion sharing and team performance: A meta-analysis, Journal of
Applied Psychology, 94: 535–546.
76. Lawler, Mohrman, & Benson, Organizing for high performance.
77. Arthur, Effects of human resource systems on manufacturing
performance and turnover.
78. MacDuffi e, Human resource bundles and manufacturing
performance.
79. Welbourne, T.M., & Andrews, A.O. 1996. Predicting the
performance of initial public offerings: Should human resource
management be in the equation? Academy of Management Journal,
39: 891–919.
80. Gittell, J.H., Seidner, R., & Wimbush, J. 2010. A relational
model of how high-performance work systems work. Organi-
zation Science, 21: 490–506; Liao, H., Toya, K., Lepak, D.P.
& Hong, Y. 2009. Do they see eye to eye? Management and
employee perspectives of high-performance work systems and
c01.indd 45c01.indd 45 12/08/10 10:43 AM12/08/10 10:43 AM
46 Chapter 1 A Strategic Approach to Organizational Behavior
infl uence processes on service quality. Journal of Applied Psychol-
ogy, 94: 371–391.
81. Kirkman, B.L., Chen, G., Farh, J.-L., Chen, Z.X., & Lowe, K.B.
2009. Individual power distance orientation and follower reac-
tions to transformational leaders: A cross-level, cross- cultural ex-
amination. Academy of Management Journal, 52: 744–764.
82. Davis, J.H., Schoorman, F.D., Mayer, R.C., & Tan, H.H. 2000.
The trusted general manager and business unit performance: Em-
pirical evidence of a competitive advantage. Strategic Management
Journal, 21: 563–576; Mayer, R.C., Davis, J.H., & Schoorman,
F.D. 1995. An integrative model of organizational trust. Academy
of Management Review, 20: 709–734.
83. Guaspari, J. 2001. How to? Who cares! Across the Board, May/
June: 75–76.
84. Gong, Y., Huang, J.-C. & Farh, J.-L. 2009. Employee learning
orientation, transformational leadership, and employee creativity:
The mediating role of employee creative self-effi cacy. Academy of
Management Journal, 52: 765–778.
85 Taylor, W.C., 2008. Bill Taylor: Pixar’s blockbuster secrets.
BusinessWeek, at http://www.businessweek.com, July 10.
86 Lewin, A.Y., Massini, S. & Peeters, C. 2009. Why are compa-
nies offshoring innovation? The emerging global race for talent.
Journal of International Business Studies, 40: 901–925.
c01.indd 46c01.indd 46 12/08/10 10:43 AM12/08/10 10:43 AM
http://www.businessweek.com
?knowledge objectives
After reading this chapter, you should be able to:
1. Defi ne organizational diversity and distinguish
between affi rmative action and diversity manage-
ment.
2. Distinguish among multicultural, plural, and mono-
lithic organizations.
3. Describe the demographic characteristics of the
U.S. population and explain their implications for
the composition of the workplace.
4. Discuss general changes occurring in the United
States that are increasing the importance of man-
aging diversity effectively.
5. Understand why successfully managing diversity
is extremely important for high-involvement work
organizations.
6. Discuss the various roadblocks to effectively man-
aging a diverse workforce.
7. Describe how organizations can successfully man-
age diversity.
2
organizational
diversity
exploring behavior in action
Diversity in the Los Angeles Fire Department
M
elissa Kelley had a rich background in fi refi ghting. Early in life, she learned from her grandfather, who worked
as a fi refi ghter. In college, she learned through coursework as a fi re-science major. After college, she spent fi ve
years learning and honing her skills as a fi refi ghter with the California Department of Forestry.
Armed with her experiences and passion for the
work, she joined the Los Angeles Fire Department in
2001. Although aware of possible discrimination and
harassment against women in the department, she did
not hesitate to join when presented with the opportu-
nity. In her words, “I was willing to overlook … the
dirty jokes, the porn, the … mentality. … I just wanted
to be part of the team.” To her, only two simple rules ap-
plied: “Do not touch me. Do not hurt me on purpose.”
According to media accounts, the fi rst of her rules
was violated early in her career with the LAFD. Soon
after joining the department, a male colleague entered
her bed at the fi rehouse. He then attempted to kiss and
touch her. She resisted and the colleague left, but for
several weeks following the incident he clucked like a
chicken whenever she was present.
During a routine training exercise later in her career,
the second rule came into sharp focus. While the rule
probably was not violated explicitly, it is relevant none-
theless to the events that occurred. Following a fi re call,
Ms. Kelley engaged in the “Humiliator” drill, a drill that
involves lifting and positioning a heavy ladder, climb-
ing the ladder with a large saw, and using the saw to cut
through metal bars in a window. Although she had previ-
ously demonstrated the abilities needed for the drill, on
that particular day she dropped the ladder onto her head,
c02.indd 47c02.indd 47 12/08/10 10:44 AM12/08/10 10:44 AM
48
Sources: S. Banks. 2006. “Firehouse Culture an Ordeal for Women,” Los Angeles Times, Dec. 3, p. A.1; S. Glover. 2007. “Rising Star
Caught in Turmoil at the LAFD,” Los Angeles Times, Feb. 12, B.1; D. Hernandez. 2006. “Bringing Diversity to the Force,” Los Angeles
Times, Feb. 6, B.4; J. Kandel. 2006. “Hostile Acts,” The IRE Journal 29, no. 4: 22; LAFD, “Core Values,” 2007, at http://www.joinlafd.
org/CoreValues.htm; L. Richardson. 2006. “Audit Faults Fire Dept.,” Los Angeles Times, Jan. 27, p. B.4; L. Richardson. 2006. “L.A. Fire
Captain Alleges Gender Bias,” Los Angeles Times, Sept. 28, p. B.4. “Lesbian fi refi ghter in L.A. wins $6.2 mil. in discrimination case.”
Jet, July 30, 2007, at FindArticles.com. http://fi ndarticles.com/p/articles/mi_m1355/is_4_112/ai_n27328045.
resulting in her helmet becoming stuck between two of its
rungs. She immediately felt pain and could not lift her arm
to free herself, saying in a later interview: “In my head I’m
thinking, I’m dying. My arm is messed up. My back is hurt-
ing. My legs are going to give out if I don’t get this ladder off
me.” She continued to struggle with the ladder while showing
obvious signs of pain. One
colleague apparently tried to
help but was stopped. Oth-
ers reportedly cursed at the
struggling fi refi ghter. In the
end, Ms. Kelley was taken to
a local hospital where multi-
ple injuries were discovered.
She subsequently had to be
reassigned as a dispatcher. In
refl ecting on the events of
that day, she summed up the
situation this way: “Those
were my teammates. They
would help a dog pinned
under a ladder. But they wouldn’t help me.”
Ms. Kelley’s experiences are not unique. Alicia Mathis,
a captain who joined the LAFD in 1989, also reports being
approached in bed at a fi rehouse. She fi led a complaint
with the California Department of Fair Employment and
Housing. Ruthie Bernal settled a lawsuit related to sexual
advances that were followed by harsh treatment when the
advances were rejected. Interestingly, Ms. Bernal reports
that such advances and subsequent harsh treatment oc-
curred in three different situations involving three differ-
ent fi refi ghters. Beyond sexual advances, other inappropri-
ate acts have been reported, including mouthwash bottles
being fi lled with inappropriate substances, unfl attering
female training experiences being captured on video and
circulated among male colleagues, sexual materials being
delivered, and disproportionately diffi cult training/testing
being applied. In a survey released by the City Controller,
80 percent of women reported discrimination as an issue.
Beyond gender-based problems, race also has played
a role in the Los Angeles Fire Department. In a racially
charged incident that took place a few years ago, an African
American fi refi ghter ate dog food that had been put into his
spaghetti at a fi rehouse. The nature of this incident remains
a matter of controversy, as some claim it was harmless horse-
play. Even so, because of a history of racial discrimination
and harassment, it sparked outrage and a lawsuit. In the
survey just mentioned, 87 percent of African Americans re-
ported discrimination as an
issue. Hispanics have also
reported problems.
The overall effects of
these gender and racial is-
sues have been signifi cant.
Beyond the loss of talented
individuals and the reduced
opportunity to attract tal-
ented women and minori-
ties, the LAFD has had to
pay millions of dollars to
settle lawsuits. For example,
Brenda Lee was recently
awarded more than $6.2
million in a discrimination, harassment, and retaliation
case against the LAFD and her former supervisor for being
harassed because she is African American, female, and gay.
Job satisfaction also has been affected for some indi-
viduals of both genders and all races. In addition, turmoil
at the top of the organization has been signifi cant, as mul-
tiple fi re chiefs have been fi red because of the discrimi-
nation and harassment. Has the ultimate mission of the
organization been compromised? The mission is to “pre-
serve life and property, promote public safety and foster
economic growth. …” Given the loss of talent, reduced
satisfaction for some, and turmoil at the top, the effective
pursuit of the mission has not been helped.
The news is not all bad, however. City and fi re depart-
ment offi cials have taken steps to remedy the situation.
Surveys designed to stay abreast of the problems have been
conducted, as noted earlier. Events such as “Black History
Month Recruitment Exposition and Family Carnival”
have been held. A new fi re chief committed to a positive
culture has been hired. The fi rst female African American
fi re captain has been installed.
©iStockphoto
c02.indd 48c02.indd 48 12/08/10 10:44 AM12/08/10 10:44 AM
http://www.joinlafd.org/CoreValues.htm
http://www.joinlafd.org/CoreValues.htm
http://findarticles.com/p/articles/mi_m1355/is_4_112/ai_n27328045
As the LAFD case shows, negative re-
actions to diversity can have harmful
effects on an organization. These re-
actions, including discrimination and
harassment of various forms, often lead
to lawsuits, turnover, reduced satisfac-
tion, and performance issues. In the
most effective organizations, associates
and managers understand the value of
diversity and capitalize on it to improve
performance. Moreover, associates and
managers cannot escape diverse work-
groups and organizations. Differences
in gender, race, functional background,
and so on are all around us. The United
States is a particularly diverse country
with respect to race and ethnicity, and
current demographic trends indicate
that its population will become even
more diverse.
LAFD’s legal troubles, fi nancial
settlement costs, and public embar-
rassment have led to renewed efforts
to change the culture. The changing
nature of the fi refi ghter’s job, where
80 percent of fi re calls no longer in-
volve structural or brush fi res, probably
has helped in this process.1 Many or-
ganizations, however, have not needed
public embarrassment or changing jobs
to motivate diversity efforts. Many orga-
nizations, particularly large ones, have
voluntarily adopted diversity manage-
ment programs aimed at recruiting,
retaining, and motivating high-quality
associates from all demographic back-
grounds. Most Fortune 500 companies,
for example, have diversity manage-
ment programs.2 A full 78 percent of
organizations with 10,000 or more
employees report having a diversity
strategy, as compared with 44 percent
of companies with 100 to 999 em-
ployees and 31 percent in companies
with fewer than 100 workers. Over 79
percent of human resource managers
at Fortune 1000 companies said they
believed that successfully managing di-
versity improves their organizations.3
Diversity, if properly managed,
can help a business build competitive
advantage. For example, hiring and
retaining managers and associates
from various ethnicities can help an or-
ganization better understand and serve
an existing diverse customer base. Di-
versity among associates also might
help the organization attract additional
customers from various ethnic groups.
Diverse backgrounds and experiences
incorporated into a work team or task
force can help the organization more
effectively handle an array of com-
plex and challenging problems. Kevin
Johnson, Co-President of Platforms and
Services at Microsoft, puts it this way:
“[W]e must recognize, respect, and
leverage the different perspectives our
employees bring to the marketplace as
strengths. Doing so will ensure that we
will be more competitive in the global
marketplace, will be seen as an em-
ployer of choice, and will be more crea-
tive and innovative … .”4
In the case of nonprofi t organiza-
tions or governmental units such as the
Los Angeles Fire Department, diversity
can help build a form of competitive ad-
vantage. For instance, hiring and retain-
ing managers and associates from both
genders and multiple ethnic groups
could help a nonprofi t organization bet-
ter understand its actual and potential
client base as well as its actual and po-
tential donors. Thus, the organization
might be able to attract resources that
would have gone to another nonprofi t
organization or that would have been
withheld from donation. In the case of
the Los Angeles Fire Department, di-
verse captains, fi refi ghters, and para-
medics could better communicate with
and predict the behavior of the diverse
citizenry of Los Angeles. This would en-
able the department to better serve the
city. It also would position it to receive
more resources from the city and state
and would increase its likelihood of
being chosen over other organizations
for additional duties in the Los Angeles
area.
Many individuals feel most com-
fortable interacting and working with
people who are similar to them on a va-
riety of dimensions (such as age, race,
ethnic background, education, func-
tional area, values, and personality).5
They must, however, learn to work with
all others in an organization to achieve
common goals. In a truly inclusive work-
place, everyone feels valued and all as-
sociates are motivated and committed
to the mission of the organization. Such
outcomes are consistent with a high-
involvement work environment and can
help organizations achieve competitive
advantage.
We begin this chapter by defi n-
ing organizational diversity and distin-
guishing it from other concepts, such as
affi rmative action. Next, we describe
the forces in a changing world that
have made diversity such a crucial con-
cern. We then discuss possible benefi ts
of effective diversity management, fol-
lowed by roadblocks to such manage-
ment and to the development of an
inclusive workplace. We conclude the
chapter with a discussion of what can
be done to successfully manage a di-
verse organization.
the strategic importance of Organizational Diversity
c02.indd 49c02.indd 49 12/08/10 10:44 AM12/08/10 10:44 AM
50 Chapter 2 Organizational Diversity
Diversity Defi ned
Diversity can be defi ned as a characteristic of a group of people where differences exist on
one or more relevant dimensions such as gender.6 Notice that diversity is a group charac-
teristic, not an individual characteristic. Thus, it is inappropriate to refer to an individual
as “diverse.” If the group is predominantly male, the presence of a woman will make the
group more diverse. However, if the group is predominantly female, the presence of a
particular woman will make the group more homogeneous and less diverse.
In practice, diversity is often defi ned in terms of particular dimensions, most com-
monly gender, race, and ethnicity. Other important dimensions also exist.7 These include
age, religion, social class, sexual orientation, personality, functional experience (e.g.,
fi nance, marketing, accounting), and geographical background (e.g., background in the
Canadian province of Ontario versus the province of Saskatchewan).8 Any characteristic
that would infl uence a person’s identity or the way he or she approaches problems and
views the world can be important to consider when defi ning diversity.9 Two diversity
scholars put it this way: “the effects of diversity can result from any attribute that people
use to tell themselves that another person is different.”10 Visible attributes (e.g., race,
gender, ethnicity),11 attributes directly related to job performance (e.g., education and
functional experience),12 and rare attributes13 are the most likely to be seen as important.
Examples of how some large organizations defi ne diversity appear below:
Texas Instruments: “Diversity refers to the ways in which people differ. This
includes obvious differences such as race and gender, and more subtle differences
in religion and culture, as well as variations in work styles, thoughts and ideas.”14
Microsoft: “[Diversity] means not only having a workforce balanced by race,
ethnic origin, gender, sexual orientation, and gender identity and expression, but
also having a workforce that embraces differences in approaches, insights, ability,
and experience.”15
Bank of America: “Our commitment to diversity is … about creating an
environment in which all associates can fulfi ll their potential without artifi cial
barriers, and in which the team is made stronger by the diverse backgrounds,
experiences and perspectives of individuals.”16
Affi rmative action programs (AAPs) differ from diversity management programs.
This important distinction should be noted before proceeding. AAPs are specifi c measures
an organization takes to remedy and/or prevent discrimination. The key idea is to ensure
fair representation of women and racial and ethnic minorities in the workplace. In the
United States, federal contractors (with 50 or more employees or government contracts
over $50,000) are required to have AAPs. Other organizations may voluntarily adopt an
AAP or may be court-ordered to adopt a program to remedy discriminatory practices.
Central features of AAPs include a utilization analysis, which indicates the proportion of
women and minorities hired and occupying various positions; goals and timetables for
remedying underutilization of women and minorities; specifi c recruiting practices aimed
at recruiting women and minorities (for example, recruiting at traditionally African Amer-
ican universities); and provision of developmental opportunities.17 AAPs do not require
that specifi c hiring quotas be implemented (which may be illegal) or that standards for
selection and promotion be lowered. Also, AAPs usually provide temporary action; once
women and minorities are appropriately represented in an organization, the AAP (with
the exception of monitoring) is no longer necessary.
diversity
A characteristic of a group
of people where differences
exist on one or more relevant
dimensions such as gender.
c02.indd 50c02.indd 50 12/08/10 10:44 AM12/08/10 10:44 AM
Diversity Defi ned 51
In contrast, diversity management programs are put in place to improve organiza-
tional performance. Because of their different goals, these programs differ from AAPs in
several ways,18 as summarized in Exhibit 2-1. Diversity management programs address
diversity on many dimensions. They are often meant to change the organizational culture
to be more inclusive and to enable and empower all associates. In addition, they focus on
developing people’s ability to work together.
When diversity is managed successfully, a multicultural organization is the result.19 A
multicultural organization is one in which the organizational culture fosters and values
differences. As Google, a company often praised for their diversity initiatives, states on
their website “At Google, we don’t just accept difference—we thrive on it. We celebrate it.
And we support it, for the benefi t of our employees, our products and our community.”
People of any gender, ethnic, racial, and cultural backgrounds are integrated and repre-
sented at all levels and positions in the organization. Because of the effective management
of diversity, there is little intergroup confl ict. Very few organizations in the United States
or elsewhere are truly multicultural organizations; most organizations are either plural or
monolithic.
Plural organizations have diverse workforces and take steps to be inclusive and re-
spectful of people from different backgrounds. However, diversity is tolerated rather than
valued and fostered. Whereas multicultural organizations take special actions to make the
environment inclusive and to ensure that all members feel valued, plural organizations
focus on the law and on avoiding blatant discrimination.20 Furthermore, people of various
backgrounds may not be integrated throughout the levels and jobs of the organization,
as they are in multicultural organizations. For example, even though a company may
multicultural
organization
An organization in which
the organizational culture
values differences.
plural organization
An organization that has a
diverse workforce and takes
steps to be inclusive and
respectful of differences, but
where diversity is tolerated
rather than truly valued.
EXHIBIT 2-1 Differences between Affi rmative Action Programs and Diversity Management Programs
Affi rmative ActionDiversity Management
Purpose To prevent and/or remedy discriminationTo create an inclusive work environment
where all associates are empowered to
perform their best
Assimilation Assumes individuals will individually assimilateAssumes that managers and the organizations
into the organization; individuals will adaptwill change (i.e., culture policies, and systems
foster an all-inclusive work environment)
Focus Recruitment, mobility, and retentionCreating an environment that allows all
associates to reach their full potential
Cause ofDoes not address the cause of problems Attempts to uncover the root causes of
Diversity Problemsdiversity problems
Target Individuals identifi ed as disadvantaged (usuallyAll associates
racial and ethnic minorities, women, people
with disabilities)
Time Frame Temporary, until there is appropriateOngoing, permanent changes
representation of disadvantaged groups
Sources: Adapted from R.R. Thomas, Jr. 1992. “Managing Diversity: A Conceptual Framework,” in S.E. Jackson et al. (Eds.), Diversity in the Workplace
(New York: Guilford Press), pp. 306–317. Society for Human Resource Management, “How Is a Diversity Initiative Different from My Affi rmative Action
Plan?,” 2004, at http://www.shrm.org/diversity.
c02.indd 51c02.indd 51 12/08/10 10:44 AM12/08/10 10:44 AM
http://www.shrm.org/diversity
52 Chapter 2 Organizational Diversity
employ a large number of women, most of them may be in secretarial jobs. Plural orga-
nizations may also have human resource management policies and business practices that
exclude minority members, often unintentionally. For example, many companies reward
people for being self-promoters; that is, people who brag about themselves and make their
achievements known are noticed and promoted, even though their achievements may not
be as strong as those who do not self-promote. However, self-promoting behavior may be
quite unnatural for people from cultural backgrounds where modesty and concern for the
group are dominant values, such as the Japanese and Chinese cultures.21 Finally, we would
expect more intergroup confl ict in plural organizations than in multicultural organiza-
tions because diversity is not proactively managed.
Finally, monolithic organizations are homogeneous. These organizations tend to
have extreme occupational segregation, with minority group members holding low-status
jobs. Monolithic organizations actively discourage diversity; thus, anyone who is differ-
ent from the majority receives heavy pressure to conform. Most U.S. organizations have
moved away from a monolithic model because changes in the external environment and
the workforce have required them to do so.22 In the next section, we describe what these
changes have been.
Forces of Change
Over the past 20 years, several important changes in the United States and in many other
countries have focused more attention on diversity, and these trends are expected to con-
tinue. The most important changes are: (1) shifts in population demographics, (2) in-
creasing importance of the service economy, (3) the globalization of business, and (4) new
management methods that require teamwork.
Changing Population Demographics
Over the past ten years, more than one-third of people entering the U.S. workforce have
been members of racial or ethnic minority groups.23 Moreover, the proportion of racial
and ethnic minorities in the workforce is expected to increase indefi nitely. The situation is
similar in some European countries.24
Exhibit 2-2 provides data on trends that affect the workforce in the United States. It
shows, for example, that non-Hispanic white people are expected to decrease as a percent-
age of the overall population, moving from almost 65 percent to less than 50 percent by
2050 (note that most Hispanics are racially white). The percentage of the population from
Hispanic origins (any race) is expected to almost double, from just under 16 percent to
almost 30 percent. The Asian American population is also expected to grow, from approxi-
mately 5 percent to 9 percent of the overall population. The expansion of the Hispanic
American and Asian American populations is due in part to immigration. The percentage
of black Americans (some of whom are of Hispanic origin) is expected to remain stable at
around 13 percent.
Exhibit 2-2 also shows a trend related to the continued aging of the U.S. popula-
tion. The decade between 2000 and 2010 saw a growth spurt in the group made up of
people aged 45 through 64. This spurt refl ects the aging of the post–World War II baby
boom generation—people born between 1946 and 1964. A major U.S. labor shortage is
expected between 2015 and 2025 as members of the baby boom generation retire.25 Thus,
monolithic organization
An organization that
is homogeneous.
c02.indd 52c02.indd 52 12/08/10 10:44 AM12/08/10 10:44 AM
Forces of Change 53
it will be even more important for organizations to be able to attract and retain talented
associates. Another aspect of the aging population also will likely infl uence the composi-
tion of the labor force. As can be seen in the exhibit, the population over 65 years old will
continue to grow. In 2050, it is expected that one in fi ve Americans will be 65 years old or
older. If people work beyond the traditional retirement age of 65 due to improved health
and the Age Discrimination Act (which protects people 40 and older from discrimination
such as being forced to retire), the workforce will continue to age.
Finally, Exhibit 2-2 indicates that the proportion of men and women in the popula-
tion is likely to remain stable. While women make up 50.9 percent of the population,
approximately 48 percent of the labor force is female.26 This number has grown from 40
percent in 1975 and is expected to increase slightly over the next decade,27 indicating that
proportionally more women than men will be entering the workforce. About 73 percent
of mothers work, and about 60 percent of mothers who work have children under the age
of three.28 In contrast, less than 50 percent of mothers worked in 1975. The number of
combined hours per week that married couples with children work increased from 55 in
1969 to 66 in 2000.29 These trends create a need for policies that take family issues into
consideration and that deal with the differing issues of workers who have children versus
those who do not have children.
Increase in the Service Economy
The U.S. Bureau of Labor Statistics has predicted that the number of service-producing
jobs (including those in transportation, utility, communications, wholesale and retail
EXHIBIT 2-2 Projected U.S. Population Demographics
Percentage by Race or Hispanic Origin 2010 2030 2050
White, alone 79.5 76.6 74.0
Black, alone 12.9 13.1 13.0
Asian, alone 5.3 7.3 9.2
More than one 1.8 2.6 3.7
Hispanic origin (all races) 15.8 22.6 29.6
White (not Hispanic origin) 64.7 55.5 46.3
Percentage by Age 2010 2030 2050
0–4 6.8 6.5 6.4
5–17 17.4 17.0 16.7
18-–24 9.9 9.1 9.0
25–44 26.8 25.5 25.2
45–64 26.1 22.6 22.4
65� 12.5 19.3 20.2
Percentage by Sex 2010 2030 2050
Male 49.1 49.1 49.2
Female 50.9 50.9 50.8
Source: U.S. Census Bureau, “U.S. Population Projections,” 2009. At http://www.census.gov/population/
www/projections/summarytables.html.
c02.indd 53c02.indd 53 12/08/10 10:44 AM12/08/10 10:44 AM
http://www.census.gov/population/www/projections/summarytables.html
http://www.census.gov/population/www/projections/summarytables.html
54 Chapter 2 Organizational Diversity
trade, fi nance, insurance, real estate, and govern-
ment) will grow by approximately 17 percent be-
tween 2004 and 2014.30 Service jobs are projected
to make up more than 78 percent of all jobs in the
United States by 2014.31 Importantly, a service-
based economy depends on high-quality interac-
tions between people, whether between beauticians
and their clients, home health-care workers and their
patients, or human resource managers and their
corporate associates. Because diversity within these
and other customer groups is increasing, the service
economy demands greater understanding and appre-
ciation of diversity.32
The Global Economy
Globalization of the business world is an accelerating trend, gaining momentum from the
increasing ease of communication, the opening of new markets, and growth in the num-
ber of multinational fi rms. In 2006, the United States exported $1,437 billion in goods
and services and imported $2,202 billion in goods and services.33 Since 2003, the export
fi gure has increased by more than 40 percent in nominal dollars, while the import fi gure
has increased by 45 percent.34 Most of the largest companies in the world (for example,
GE, Exxon, and Toyota) are the largest owners, worldwide, of foreign assets.35 These same
companies employ millions of workers outside of their home countries. Also, many of
these companies require workers in their home countries to work with people from other
parts of the world. Finally, many companies now conduct worldwide searches for manag-
ers and executives, so that the world serves as the labor market.
The continuing growth of globalization indicates that people will be working with
others from different countries and cultures at an ever-increasing rate. Furthermore, many
U.S. associates will work outside the United States with people who speak different lan-
guages, are accustomed to different business practices, and have different worldviews. As
globalization increases, the need for successful diversity management also increases. You
will read more about global issues in Chapter 3.
Requirements for Teamwork
Organizations that wish to succeed must respond to increasing globalization, rapidly
changing technology and knowledge, and increasing demands for meaningfulness of as-
sociates’ work. Teamwork is one way to provide better-quality goods and services, because
people are more likely to become engaged and committed to the goals of the organization
when they are members of strong teams. Whole Foods Market provides an example. At
this very successful U.S.-based international provider of organic foods, everyone is as-
signed to a small, self-directed team.36
Teamwork requires that individuals work well together. Having diverse teams may
allow for synergistic effects, where the variety of team experiences, attitudes, and view-
points leads to better team performance.37 However, to realize these positive effects, diver-
sity must be managed effectively. Teams are discussed in more detail in Chapter 11.
©AP/Wide World Photos
c02.indd 54c02.indd 54 12/08/10 10:44 AM12/08/10 10:44 AM
Diversity Management and High-Involvement Organizations55
Diversity Management and
High-Involvement Organizations
High-involvement organizations expect their associates to respect, learn from, and help
one another. They also recognize that associates must be committed to the organization
in order to use training, information, and decision power in appropriate ways. Managing
diversity effectively is important in the achievement of these aims. Individuals, groups,
organizations, and even society as a whole can benefi t.
Individual Outcomes
Associates’ perceptions of the extent to which they are valued and supported by their orga-
nization have a strong effect on their commitment to the organization and their job involve-
ment and satisfaction.38 In the case of associates who are different from those around them,
a positive, inclusive climate for diversity is necessary for full engagement in the work.39 Re-
search has found that women, racial and ethnic minority group members, and people with
disabilities have less positive attitudes toward their organizations, jobs, and careers when
they feel that their organizations have poor climates for diversity.40 In addition, when an
organization encourages and supports diversity, individuals are less likely to feel discrimi-
nated against and to be treated unfairly. When people feel they have been treated unfairly,
they react negatively by withdrawing, performing poorly, retaliating, or fi ling lawsuits.41
Consider the case of a person whose religion forbids alcohol use, requires prayer at
certain times of the day, and considers sexual jokes and materials offensive. This person,
though, works in an environment where many deals are made over drinks in the local
bar, where co-workers tease him because of his daily prayers, and where offi ce walls are
covered with risqué pictures. It is likely that this person feels uncomfortable in the offi ce
and devalued by his co-workers, leading to dissatisfaction and low commitment to his as-
sociates and the organization. Furthermore, he may avoid uncomfortable social activities
where important information is exchanged and work accomplished, thus hurting his job
performance. A work environment and culture that are sensitive, respectful, and accept-
ing of this person’s beliefs would likely result in a more committed, satisfi ed, and higher-
performing associate.
With respect to individuals who are in the majority, diversity management programs
must be sensitive to their needs as well. Otherwise, the ideals of diversity management will
not be met and outcomes for some individuals will be less positive than they should be.
In the United States, white men are often in the majority in a given organizational situa-
tion. For them, diversity management can be threatening. One study showed that white
men placed less value on efforts to promote diversity.42 Another study showed that white
men perceived injustice when laid off in disproportionate numbers in the face of active
diversity management, but did not perceive injustice in the face of disproportionate layoffs
in situations without active diversity management.43 To ensure commitment, satisfaction,
and strong performance among those in a majority group, organizational leaders must:
(1) carefully build and communicate the case for diversity by citing the forces of change
discussed earlier and (2) ensure fair decision processes and fair outcomes for all.
Organizations that create, encourage, and support diversity make all associates feel
valued and provide them with opportunities to reach their full potential and be truly en-
gaged in their work. This is a necessary condition of high-involvement work environments.
c02.indd 55c02.indd 55 12/08/10 10:44 AM12/08/10 10:44 AM
56 Chapter 2 Organizational Diversity
To put it another way, creating and successfully managing diversity is a necessary condi-
tion for achieving a high-involvement work environment.
Group Outcomes
Diversity should have positive effects on the outcomes of organizational groups, particularly
on decision-making, creative, or complex tasks.44 This is because individual group members
have different ideas, viewpoints, and knowledge to contribute, resulting in a wider variety of
ideas and alternatives being considered.45 Individuals who are different in terms of age, gender,
race, ethnicity, functional background, and education often think about issues differently.46
For example, have you ever wondered why phones have rounded edges instead of
sharp corners and why there is often a raised dot on the “5” key? One reason is that de-
sign groups at AT&T include people who have disabilities, including visual impairments.
Rounded corners are less dangerous for people who cannot see the phone, and a raised dot
on the “5” key allows people who cannot see to orient their fi ngers on the keypad. Ohmny
Romero, who has worked as a manager in AT&T’s technical division and is visually im-
paired, stated that AT&T associates with disabilities become involved in developing new
technologies because they want to “give back” to their community.47 As a result, everyone
has less dangerous phones and keypads that can be used when it is diffi cult to see. These
innovations might never have come about if AT&T design teams had not included mem-
bers with disabilities and respected their inputs.
In spite of its potential benefi ts, diversity has been described as a “mixed blessing” in
terms of outcomes for organizational groups.48 Indeed, research has produced mixed re-
sults, with some studies showing positive effects but other studies failing to show such ef-
fects.49 There are two issues to consider in interpreting these research outcomes. First, fault
lines can be present in situations characterized by diversity. Fault lines occur when two or
more dimensions of diversity are correlated. For example, if all/most of the young people
on a cross-functional task force represent marketing while all/most of the older individuals
represent product engineering, then a fault line is said to exist. Fault lines merge multiple
identities (e.g., young and marketing focused) to produce barriers to effective collabora-
tion within a group. Research on this phenomenon is relatively new, but has produced
fi ndings suggesting poor group outcomes.50
Second, problems can develop in all situations characterized by some level of diversity.
People often label group members who are different from themselves as “out-group mem-
bers” and like them less,51 leading to diffi culties in group problem solving and decision
making. Diverse organizational groups are more likely to experience personal confl ict,
problems in communication, and confl ict among subgroups.52
In light of the above issues, the goal becomes one of facilitating the positive effects of di-
versity while eradicating the potentially negative effects. One way of harnessing the positive
potential of group diversity, while avoiding the negative, is to establish a common identity
for the group and to focus on common goals.53 Richard Hackman, a leading researcher and
consultant in the area of teams, has pointed out the importance of common goals for a team,
as well as the importance of coaching for team problems.54 Furthermore, when a company
has a positive diversity culture, the problems associated with group diversity are much less
likely to occur.55 An organization that implements effective diversity programs, philosophies,
and practices tends to avoid the problems associated with diversity, allowing it to yield the
benefi ts that can be so important.56 We develop these ideas later in this chapter.
c02.indd 56c02.indd 56 12/08/10 10:44 AM12/08/10 10:44 AM
Diversity Management and High-Involvement Organizations57
Organizational Outcomes
As discussed above, diversity can lead to more satisfi ed, motivated, and committed as-
sociates who perform more effectively at their individual tasks. Properly managed, diver-
sity can also lead to better-performing and more innovative groups. Therefore, diversity,
through its effects on individual and group outcomes, is likely to affect the bottom-line
performance of the organization.57
Despite the importance of the issue, little systematic research has been conducted
that explicitly examines whether the diversity of an organization’s workforce is tied to
bottom-line performance. One exception is a study that examined the effect of racial and
ethnic diversity in the banking industry. Diversity was positively related to the productiv-
ity, return on equity, and market performance of banks, but only when the bank had a
corporate strategy that refl ected growth. The positive relationship between diversity and
fi rm performance was not found in banks that were pursuing a downsizing strategy. In
these banks, greater diversity tended to result in poorer performance.58 Another exception
is a large-scale study commissioned by business executives and conducted by researchers at
MIT’s Sloan School of Management, Harvard Business School, the Wharton School, Rut-
gers University, the University of Illinois, and the University of California at Berkeley.59
This research examined the impact of demographic diversity on various aspects of fi rm
performance in several Fortune 500 companies. Diversity was found to have no straight-
forward effects on performance. The researchers concluded that organizations need to
manage diversity more effectively, especially because of the potential benefi ts that diversity
offers. That is, diversity alone does not guarantee good corporate performance. It’s what
the company does with diversity that matters!
In addition to diversity in the workforce, diversity among those leading an orga-
nization might have effects. During the past decade or so, the business press has called
for an increase in the demographic diversity of boards of directors and upper-echelon
management teams.60 Indeed, the number of women and racial/ethnic minority group
members on corporate boards and in top executive positions has been consistently
increasing.61
This trend appears to make good sense. A recent study of Fortune 500 fi rms found
that the companies with the highest representation of women in top positions strongly
outperformed those with the poorest representation of women in terms of return on eq-
uity and return to shareholders.62 Other studies have found that the demographic diversity
of boards of directors (in terms of race, gender, and age) is positively related to fi rm perfor-
mance.63 Thus, demographic diversity on boards can have a direct positive impact on the
organization. One reason for this effect is that women and minorities who actually make
it to the top may be better performers and better connected than typical board members.64
Thus, including them on boards of directors usually increases the quality and talent of the
board; the same is usually true for the upper-echelon management team. Another reason
for positive outcomes is that by having demographically diverse boards and management
teams, companies are sending positive social signals that attract both associates and poten-
tial shareholders.65
Other types of diversity on boards of directors and upper-echelon management teams
also might be benefi cial to the fi rm’s bottom-line performance. Research suggests that
diversity in functional areas, educational background, social/professional networks, and
length of service can have positive effects on fi rm performance through better decision
making.66 Again, the diversity must be managed properly for benefi ts to appear.
c02.indd 57c02.indd 57 12/08/10 10:44 AM12/08/10 10:44 AM
58 Chapter 2 Organizational Diversity
Societal and Moral Outcomes
In order to have a society based on fairness and justice, U.S. federal laws prohibit employ-
ers from discriminating against applicants or employees on the basis of age, gender, race,
color, national origin, religion, or disability. Discrimination is an expensive proposition
for companies. Some recent awards to plaintiffs resulting from either out-of-court settle-
ments or court cases include the following:
• Ford Motor Company paid out $10.5 million for age discrimination and
$8 million for sex discrimination.
• Coca-Cola paid out $192.5 million for race discrimination.
• Texaco paid out $176 million for race discrimination.
• CalPERS paid out $250 million for age discrimination.
• Shoneys paid out $132.5 million for race discrimination.
• Rent-A-Center paid out $47 million for sex discrimination.
• Information Agency and Voice of America paid out $508 million for sex
discrimination.
• Wal-Mart recently paid $17.5 million to settle a class action lawsuit regarding
discrimination against African Americans in recruitment and hiring of truck
drivers for its private fl eet. The company is currently dealing with the largest
discrimination lawsuit in history. There is an unresolved class action suit fi led by
two million current and former female employees for sex discrimination.
Apart from these direct costs, fi rms suffer other losses when suits are fi led against them,
including legal costs, bad publicity, possible boycotts, and a reduction in the number of job
applicants. One study found that stock prices increased for companies that won awards for
affi rmative action and diversity initiatives, whereas they fell for companies that experienced
negative publicity because of discrimination cases.67 Exhibit 2-3 summarizes applicable
federal laws. Individual states may also have laws that protect people from discrimination
based on additional characteristics, such as sexual orientation and marital status.
EXHIBIT 2-3 Federal Laws Preventing Employment Discrimination
Law Employers Covered Who Is Protected
Title VII of the 1964 CivilPrivate employers, state and local governments, Everyone based on race, color
Rights Act, Civil Rights Acteducation institutions, employment agencies, religion, sex, or national origin
of 1991 and labor unions with 15 or more individuals
Equal Pay Act of 1963 Virtually all employersMen and women who perform
substantially equal work
Age Discrimination in Private employers, state and local governments,Individuals who are 40 years old
Employment Act of 1967education institutions, employment agencies,or older
and labor unions with 20 or more individuals
Title I of the Americans with Private employers, state and local governments,Individuals who are qualifi ed and
Disabilities Act of 1990 education institutions, employment agencies,have a disability
and labor unions with 15 or more individuals
Source: U.S. Equal Employment Opportunity Commission, 2002, http://www.eeoc.gov/facts/qanda.html.
c02.indd 58c02.indd 58 12/08/10 10:44 AM12/08/10 10:44 AM
http://www.eeoc.gov/facts/qanda.html
Diversity Management and High-Involvement Organizations59
FPO
EXPERIENCING ORGANIZATIONAL BEHAVIOR
On November 4, 2008, the United States elected Barack Obama as president. Presi-
dent Obama personifi es the concept
of diversity in terms of race, ethnic-
ity, and geography. His black father
was from a small town in Kenya and
his white mother was from Kansas.
His parents met in Hawaii, where he
was born. President Obama’s parents
were divorced when he was 2 years
old. When he was six years old, his
mother remarried a man from Indo-
nesia, and the family moved there.
At the age of ten, Barack Obama
returned to Hawaii to live with his ma-
ternal grandparents. He has a half-
sister who is part Indonesian and is
married to a man who is Chinese Ca-
nadian. President Obama’s wife, Mi-
chelle Obama, is African American.
In an interview with Oprah Winfrey,
President Obama described his fam-
ily get-togethers as “mini United Na-
tions meetings.” He said he had some
relatives that looked like Bernie Mac
and some that looked like Margaret
Thatcher. The Obama family clearly
exemplifi es the diversity inherent in
the United States.
President Obama’s intrapersonal
diversity and strong beliefs that di-
versity in governance is necessary is
refl ected in the diversity of his cabi-
net. Thirty-four percent of his offi cials
are female, 11 percent are black, 8
percent are Hispanic, and 4 percent
are Asian. While these do not seem
like large numbers, they refl ect more
diversity than was present in past ad-
ministrations’ cabinets. This diversity
is expected to increase as President
Obama’s tenure in
offi ce lengthens and
he brings in new of-
fi cials.
The presidency
of Barack Obama
brings up the ques-
tion of whether the
United States has
overcome problems
with racial, ethnic,
and gender discrim-
ination. Is the lead-
ership in this coun-
try fi nally refl ective
of the population? Unfortunately, this
is still not the case, as evidenced by
the demography of corporate lead-
ers. At the end of 2008, there were
5 black, 7 Latino, 7 Asian, and 13
female (2 of whom are Asian) CEOs
of Fortune 500 companies. This
means that 94 percent of Fortune
500 CEOs were white, non-Hispanic
males. Examining the composition
of boards of directors reveals the
same lack of diversity. A Catalyst
2009 study of Fortune 500 com-
panies revealed that women held
15.2 percent of board seats and
women of color held 3.1 percent of
all board director positions. Women
held only 2 percent of board chair
positions. These numbers have re-
mained relatively consistent over the
past fi ve years. A study on African
American representation on corpo-
rate boards found that representa-
tion had decreased from 8.1 percent
in 2004 to 7.4 percent in 2008. In a
recent study of Fortune 100 boards,
the Alliance for Board Diversity (a
joint effort among organizations
concerned with board diversity) con-
cluded that:
• There is a severe underrepresenta-
tion of women and minorities on
corporate boards when compared
to general U.S. population demo-
graphics for race and gender.
• Particular areas of concern include
the lack of representation of minor-
ity women and of Asian Ameri-
cans and Hispanics.
• There is a recycling of the same
minority individuals—especially
African American men—as board
members. Minority and female
board members hold more seats
per person than do white males.
• Very few boards have represen-
tation from all groups. Only four
boards had representation by
all four groups (women, African
Americans, Asian Americans, and
Hispanics).
Will the diversity evident in the
Obama administration fi lter down to
Diversity at the Top
©MANDEL NGAN/Getty Images, Inc.
c02.indd 59c02.indd 59 12/08/10 10:44 AM12/08/10 10:44 AM
60 Chapter 2 Organizational Diversity
corporate America? Gloria Castillo,
president of Chicago United (an orga-
nization that advocates for diversity
in business) suggests that the Obama
administration will help change
things. She states “The Obama lesson
for corporate directors and C.E.O.’s
is that they must accept accountability
for proactively seeking out executives
of difference to unleash even greater
innovation in their enterprises. …
[O]nce they institute true diversity and
inclusion in their businesses, other
leaders throughout the organizations
must follow that lead and actively cre-
ate an environment that fully engages
the best qualifi ed stakeholders . . .
regardless of ethnicity.” In the next
Experiencing Organizational Behav-
ioral section “Women, Work, and
Stereotypes” we indicate that women
are advancing into management posi-
tions. Will women and minorities con-
tinue their integration into the very top
positions, as evidenced in the White
House? Only time will tell.
Sources: E.J. Cepeda. November 11, 2008. At “More Diversity in Workplace? Black Man in White House No Silver Bul-
let, But a Start”. At http://www.huffi ngtonpost.com/esther-j-cepeda/more-diversity-in-workpla_b_142938.html; Oprah
Winfrey Interview with Barack Obama, January 11, 2009. At http://www.oprah.com/media/20090112_inaug_di-
versity.; “ Meet Barack.” At http://www.barackobama.com/about/; J.A Barnes. June 20, 2009. Obama’s Team: The
Face Of Diversity. National Journal Magazine. At http://www.nationaljournal.com/njmagazine/nj_20090620_3869.
php; “Fortune 500 Black, Latino, and Asian CEOs.” July 22, 2009. Diversity Inc. At http://www.diversityinc.com/con-
tent/1757/article/3895/?Fortune_500_Black_Latino_Asian_CEOs; D. Jones. January 2, 2009. “Women CEOs slowly
gain on Corporate America”. At http://www.usatoday.com/money/companies/management/2009-01-01-women-
ceos-increase_N.htm.; “2009 Catalyst Census of the Fortune 500 Reveals Women Missing From Critical Business Lead-
ership’ December 9, 2009. At http://www.catalyst.org/press-release/161/2009-catalyst-census-of-the-fortune-500-
reveals-women-missing-from-critical-business-leadership; “African Americans Lost Ground on Fortune 500 Boards” July
21, 2009. At http://urbanmecca.net/news/?p=7649; “Alliance for Board Diversity: Fact Sheet” December 2009.
Catalyst. At http://www.catalyst.org/press-release/117/alliance-for-board-diversity-fact-sheet.
Companies that manage diversity well do not discriminate, and their associates are
less likely to sue for discrimination. Managing diversity means more than just avoiding
discrimination, however. In addition to legal reasons for diversity, there are also moral
reasons.
The goal of most diversity programs is to foster a sense of inclusiveness and provide
all individuals with equal opportunity—an important cultural value in the United States
and in many other countries. Although many countries pride themselves on equality
and inclusiveness, they take very different approaches to encourage these ideals. For
example, in the United States, differences across groups are highlighted and even cel-
ebrated, and laws are used to help in the advancement of minority and disadvantaged
groups. In France, differences are downplayed as unimportant and there is limited affi r-
mative action to promote the advancement of minority groups. Britain takes the middle
road by recognizing differences but with limited affi rmative action to promote fair out-
comes in society.68
Roadblocks to Diversity
In the preceding section, we focused on the potential benefi ts of creating and managing
diversity in organizations. Organizations working to institute effective diversity manage-
ment programs face a number of obstacles, however. In this section, we consider the road-
blocks to creating an inclusive workplace.
c02.indd 60c02.indd 60 12/08/10 10:44 AM12/08/10 10:44 AM
http://www.huffingtonpost.com/esther-j-cepeda/more-diversity-in-workpla_b_142938.html
http://www.nationaljournal.com/njmagazine/nj_20090620_3869.php
http://www.diversityinc.com/con-tent/1757/article/3895/?Fortune_500_Black_Latino_Asian_CEOs
http://www.diversityinc.com/con-tent/1757/article/3895/?Fortune_500_Black_Latino_Asian_CEOs
http://www.usatoday.com/money/companies/management/2009-01-01-women-ceos-increase_N.htm
http://www.usatoday.com/money/companies/management/2009-01-01-women-ceos-increase_N.htm
http://www.catalyst.org/press-release/161/2009-catalyst-census-of-the-fortune-500-reveals-women-missing-from-critical-business-leadership
http://www.catalyst.org/press-release/161/2009-catalyst-census-of-the-fortune-500-reveals-women-missing-from-critical-business-leadership
http://urbanmecca.net/news/?p=7649
http://www.catalyst.org/press-release/117/alliance-for-board-diversity-fact-sheet
http://www.oprah.com/media/20090112_inaug_diversity
http://www.oprah.com/media/20090112_inaug_diversity
http://www.barackobama.com/about/
http://www.nationaljournal.com/njmagazine/nj_20090620_3869.php
Roadblocks to Diversity 61
Prejudice and Discrimination
Prejudice refers to unfair negative attitudes we hold about people who belong to social or
cultural groups other than our own. Racism, sexism, and homophobia are all examples of
prejudice. Prejudice infl uences how we evaluate other groups (“Arabs are bad,” “People with
disabilities are to be pitied”) and can also lead to emotional reactions, such as hate, fear,
disgust, contempt, and anxiety. Unfair discrimination is behavior that results in unequal
treatment of individuals based on group membership. Examples of discrimination include
paying a woman less than a man to do the same work, assigning people with disabilities
easier jobs than others, and not promoting Asian Americans to leadership positions.
Prejudice and discrimination do not have to be overt or obvious. Consider racism as
an example. Overt prejudice and discrimination toward racial minorities have been on the
decline in the United States since passage of the 1964 Civil Rights Act.69 Whites have be-
come more accepting of residential integration and interracial marriage over the past sev-
eral decades, for example. However, prejudice and discrimination still exist in more subtle
forms, a phenomenon often referred to as “modern racism.”70 In general, modern racism
occurs when people know that it is wrong to be prejudiced against other racial groups and
believe themselves not to be racists. However, deep-seated, perhaps unconscious, prejudice
still exists in these people, confl icting with their belief that racism is wrong.
People who are modern racists do not make racial slurs or openly treat someone of an-
other race poorly. However, they may discriminate when they have an opportunity to do so,
and then attribute their discriminatory behavior to another cause (such as poor performance)
or hide their discriminatory behavior. In some cases, the discrimination is unintentional.
A recent study demonstrates modern racism in action.71 Participants were asked to
evaluate candidates for a university peer counseling position. White participants evaluated
either a black or a white candidate. The qualifi cations of the candidates were varied, so
that sometimes the candidates had very good qualifi cations, sometimes they had very bad
qualifi cations, and sometimes qualifi cations were ambiguous and less obviously good or
bad. The white evaluators showed no discriminatory behavior toward black candidates
who had either very good or very bad qualifi cations. These candidates were chosen (or
rejected) as frequently as white candidates with similar credentials. However, when quali-
fi cations were ambiguous and it was not obvious what hiring decision was appropriate,
the evaluators discriminated a great deal against black candidates. When qualifi cations
were ambiguous, black candidates were chosen only
45 percent of the time, whereas white candidates with
ambiguous qualifi cations were chosen 76 percent of
the time.
Most research and discussion concerning modern
racism has focused on whites’ attitudes toward and
treatment of blacks. However, evidence reveals that
the same dynamics occur with non-Hispanic white
behavior toward Hispanics, men’s behavior toward
women, nondisabled individuals’ behavior toward
people with disabilities, and heterosexuals’ behav-
ior toward homosexuals.72 Further, minority group
members may hold negative attitudes toward major-
ity group members, and one minority group may hold
prejudice
Unfair negative attitudes
we hold about people who
belong to social or cultural
groups other than our own.
discrimination
Behavior that results in unequal
treatment of individuals based
on group membership.
modern racism
Subtle forms of discrimination
that occur despite people
knowing it is wrong to be
prejudiced against other
racial groups and despite
believing they are not racist.
©Tyler Edwards/Photodisc/Getty Images, Inc.
c02.indd 61c02.indd 61 12/08/10 10:44 AM12/08/10 10:44 AM
62 Chapter 2 Organizational Diversity
negative attitudes toward another. Regardless of the source, prejudice and discrimination
can prevent people from working effectively, getting along with one another, and reaping
the benefi ts that can be derived from a diverse workforce.
Prejudice and discrimination can serve as barriers to effectively managing diversity,
leading to stress, poor performance, feelings of injustice, and poor organizational com-
mitment on the part of its victims.73 In addition to preventing an organization from be-
coming a high-involvement workplace, prejudice and discrimination, as discussed above,
can also be costly in terms of lawsuits and poor public relations. The Los Angeles Fire
Department has experienced this fi rsthand. Thus, diversity management programs must
eliminate prejudice and discrimination before they can be effective and foster a high-
involvement work environment.
Stereotyping
A stereotype is a generalized set of beliefs about the characteristics of a group of individu-
als. Stereotypes are unrealistically rigid, often negative, and frequently based on factual
errors.74 When individuals engage in stereotyping, they believe that all or most members
of a group have certain characteristics or traits. Thus, when we meet a member of that
group, we assume that the person possesses those traits.
The problem with stereotypes is, of course, that they ignore the fact that the individu-
als within any group vary signifi cantly. We can always fi nd examples of someone who fi ts
our stereotype; alternatively, we can just as easily fi nd examples of people who do not fi t
the stereotype. For example, a common stereotype is that black people are poor.75 How-
ever, the overwhelming majority of black people are middle class (just as are the majority
of white people). It is statistically easier to fi nd a middle-class black person than a poor
one—and yet the stereotype persists.
Stereotyping is particularly diffi cult to stop for several reasons. First, stereotypes are
very diffi cult to dispel. When we meet someone who has characteristics that are incongru-
ent with our stereotypes (a smart athlete, a rich black person, a socially skilled accountant,
or a sensitive white male), we ignore the discrepancy, distort the disconfi rming informa-
tion, see the individual as an exception to the rule, or simply forget the disconfi rming
information.76 Thus, disconfi rming information is not as likely as it should be to change
stereotypes.
Second, stereotypes guide what information we look for, process, and remember.77
For example, suppose I believe that all accountants are socially inept. When I meet an
accountant, I will look for information that confi rms my stereotype. If the accountant is
alone at a party, I will assume he or she is antisocial. I will remember instances of when
the accountant was quiet and nervous around people. I may also actually “remember”
seeing the accountant acting like a nerd, even if I actually did not. Thus, my stereotype is
guiding how I process all information about this person based on his or her membership
in the accountant group.
Third, stereotypes seem to be an enduring human quality; we all hold stereotypes.
Stereotyping is so prevalent in part because it allows us to simplify the information that
we deal with on a day-to-day basis.78 Another reason is that it allows us to have a sense of
predictability. That is, if we know a person’s group membership (such as race, occupation,
or gender), we also believe we have additional information about that person based on our
stereotype for that group. Thus, the stereotype provides us with information about other
stereotype
A generalized set of beliefs
about the characteristics of
a group of individuals.
c02.indd 62c02.indd 62 12/08/10 10:44 AM12/08/10 10:44 AM
Roadblocks to Diversity 63
EXHIBIT 2-4 Common Stereotypes Applied to Various Groups
of People
Women People with Disabilities White Men
Dependent Quiet Responsible for society’s problems
Passive Helpless Competitive
Uncompetitive Hypersensitive Intelligent
Unconfi dent Bitter Aggressive
Unambitious Benevolent Ignorant
Warm Inferior Racist
Expressive Depressed Arrogant
Black People Japanese Men Jewish People
Athletes Meticulous Rich
Underqualifi ed Studious Miserly
Poor Workaholics Well-educated
Good dancers Racist Family-oriented
Unmotivated Unemotional Cliquish
Violent Defer to authority Status conscious
Funny Unaggressive Good at business
Athletes Accountants Arab People
Dumb Smart Terrorists
Strong Nerdy Extremely religious
Sexist Unsociable Extremely sexist
Macho Good at math Rich
Male Bad dressers Hate Americans
Uneducated Quiet Jealous of Americans
Greedy Dishonest Don’t value human life
Sources: M.E. Heilman. 1983. “Sex Bias in Work Settings: The Lack of Fit Model,” in B.M. Staw and L.L.
Cummings (Eds.), Research in Organizational Behavior, Vol. 5 (Greenwich, CT: JAI Press), pp. 269–298; C.S.
Fichten and R. Amsel. 1986. “Trait Attributions about College Students with a Physical Disability: Circumplex
Analysis and Methodological Issues,” Journal of Applied Social Psychology, 16: 410–427; Reprinted with
permission of the publisher. From Cultural Diversity in Organizations: Theory, Research and Practice, © 1993 by
T.H. Cox, Jr., Berrett-Koehler Publishers, Inc., San Francisco, CA. All rights reserved. www.bkconnection.com.
people that enables us to predict their behavior and know how to respond to them. The
comedian Dave Chappelle provides an amusing example of this in a skit in which he plays
a fortuneteller. Instead of relying on mystic powers, he relies on his stereotypes. Given the
race and gender of a phone-in caller, fortuneteller Chappelle can identify all sorts of infor-
mation about the person’s life (like whether the person is calling from prison or is on drugs).
Because stereotypes can drive behavior and lead to unrealistic or false assumptions
about members of other groups, they can have very detrimental effects on interpersonal
relations. Stereotypes can also have direct effects on individuals’ careers by causing unfair
treatment. In essence, when we rely on stereotypes to make judgments about an individ-
ual, rather than obtaining factual information, we are engaging in faulty decision making
that causes harm. Exhibit 2-4 lists some common stereotypes for select groups.
The Experiencing Organizational Behavior feature shows that many individuals con-
tinue to stereotype women, and to harm their outcomes. Over time, changes in how
women are viewed might be aided by examples of success and ambition among women
c02.indd 63c02.indd 63 12/08/10 10:44 AM12/08/10 10:44 AM
www.bkconnection.com
64 Chapter 2 Organizational Diversity
Over the past three decades, women in Western, industrial-ized nations have achieved a
great deal in workplace acceptance,
respect, and advancement. In fi elds
as diverse as accounting, risk man-
agement, general management, and
police work, women have made sub-
stantial progress. For example, chief
fi nancial offi cers, polled a few years
ago by America’s Community Bank-
ers, reported substantial increases in
the number of women managers in
their banks. Women in Business re-
cently reported that the percentage
of women holding supervisory roles
had increased from 20 percent to al-
most 50 percent in a recent 30-year
period. Fortune 500 fi rms reported a
few years ago that women in offi cer
positions had increased from 2 per-
cent to more than 10 percent.
With this advancement, it would
seem that stereotypes characterizing
women as submissive, frivolous, in-
decisive, and uncommitted to the
workplace have been eliminated.
Even though one study found that ste-
reotypes of women were becoming
more compatible with beliefs about
what it takes to be a good manager,
problems still exist. Consider the lan-
guage used in major media outlets
to describe some businesswomen.
Carly Fiorina, former chief execu-
tive offi cer of Hewlett-Packard, has
been characterized as being “as
comfortable with power as any
woman could be.” A former chief
executive at Mattel, Jill Barad—who
admittedly had some problems—was
slighted with the following dismissive
statement: “She should have stuck to
marketing, rather than worrying her
pretty little head about running the
company.” Darla Moore, who con-
tributed $25 million to the University
of South Carolina School of Busi-
ness, was characterized as a “babe
in business.” This type of language
may help to keep gender stereo-
types alive. Stereotypical language
and images routinely found in such
places as television commercials,
radio ads, and travel brochures may
also contribute.
Further evidence that gender
stereotypes are not dead comes from
the fi nancial sector. According to
Sheila McFinney, an organizational
psychologist familiar with Wall
Street, “Stereotypes about wom-
en’s abilities run rampant in the
fi nancial industry. A lot of men
in management feel that women
don’t have the stomach for sell-
ing on Wall Street.” In support of
this statement, a number of Wall
Street fi rms have been forced to settle
major harassment and discrimination
claims with thousands of current and
former women associates. Interest-
ingly, women are more prevalent in
fi nance than in many other functional
areas.
Finally, evidence that suggests
ongoing stereotypes comes from a
2007 survey conducted by Elle mag-
azine in conjunction with MSNBC
.com. Sixty-thousand respondents
from a variety of occupations and
industries answered questions about
women and men as leaders. Ap-
proximately half of them indicated
that women and men have differing
abilities, with women being less able
than men. Women, however, were
given high marks for supportive en-
vironments.
Sources: “Women Accountants Advance in Management Ranks,” Community Banker, 10, no. 4 (2001): 52; J. Ander-
son. 2006. “Six Women at Dresdner File Bias Suit,” New York Times, Jan. 10, C.1; C. Daily and D.R. Dalton. 2000.
“Coverage of Women at the Top: The Press Has a Long Way to Go,” Columbia Journalism Review, 39, no. 2: 58–59;
M.K. Haben. 2001. “Shattering the Glass Ceiling,” Executive Speeches, 15, no. 5: 4–10; M.-L. Kamberg. 2005. “A
Woman’s Touch,” Women in Business, 57, no. 4: 14–17; M. Ligos. 2000. “Nightmare on Wall Street,” Sales and
Marketing Management, 152, no. 2: 66–76; E. Tahmincioglu. 2007. “Men Rule—At Least in Workplace Attitudes,”
at http://www.msnbc.msn.com/id/17345308; E. E. Duehr, & J.E. Bono. 2006. Men, women, and managers: Are
stereotypes fi nally changing? Personnel Psychology, 59: 815–846.
©
S
te
ve
H
ix
/S
om
os
Im
ag
es
/C
or
bi
s
EXPERIENCING ORGANIZATIONAL BEHAVIOR
Women, Work, and Stereotypes
c02.indd 64c02.indd 64 12/08/10 10:44 AM12/08/10 10:44 AM
http://www.msnbc.msn.com/id/17345308
Roadblocks to Diversity 65
leaders. Anne Mulcahy, CEO of Xerox, and Meg Whitman, former CEO of eBay, are ex-
amples. Mulcahy has been instrumental in turning around a company that was near death
only a few years ago.79 Whitman helped to build eBay from a very small company to one
in which millions of people do more than $50 billion in business annually. Her vision for
eBay was ambitious and included changing consumers’ current emphasis on buying at re-
tail stores. Although competition and market dynamics have cooled the company’s growth
to some degree, eBay continues to be strong.80
Differences in Social Identity
Everyone’s personal self-identity is based in part on his or her membership in various so-
cial groups.81 This aspect of self-identity is referred to as “social identity.” Social identity
is defi ned as a person’s knowledge that he or she belongs to certain social groups, where
belonging to those groups has emotional signifi cance.82 In describing yourself, you might
respond with a statement such as “I am a Catholic,” “I am Jewish,” “I am a member of my
sorority,” “I am of Puerto Rican descent,” “I am an African American,” or “I am a Repub-
lican.” Such a statement describes an aspect of your social identity structure. Exhibit 2-5
provides examples of overall structures.
Having a social identity different from that of the majority can be very diffi cult, for
several reasons. First, a person’s social identity becomes more salient, or noticeable, when
the person is in the minority on an important dimension. Accordingly, racial and ethnic
minorities are much more likely to state that their membership in a racial or ethnic group
is an important part of their self-concept.83 For example, in one study, researchers said to
people, “Tell me about yourself.”84 Only one out of every 100 white people mentioned
social identity
A person’s knowledge
that he or she belongs to
certain social groups, where
belonging to those groups
has emotional signifi cance.
Hispanic
Male
Football
Fan
Student
Fraternity
Member
Marathon
Runner
Scientist
Jewish
NASA
Employee
Woman
Feminist
African
American
Christian
Mother
Lawyer
Woman
Texan
A
B
C
Exhibit 2-5 Sample Social-Identity Structures
c02.indd 65c02.indd 65 12/08/10 10:44 AM12/08/10 10:44 AM
66 Chapter 2 Organizational Diversity
that she was white. However, one in six black respondents mentioned his race, and one in
seven Hispanic respondents mentioned ethnicity. Also, many women remark that they are
more conscious of being female when they are in a work environment that is all male than
when they are in a mixed-gender group. When a person’s minority social identity becomes
salient, the person is made more aware that he or she is different from the majority of
people in the situation.
Second, having a social identity different from that of the majority may make people
feel they have to behave in ways that are unnatural for them in certain contexts. Feeling
that they are acting out a false role will in turn lead to stress and dissatisfaction.85 For
example, women operating in an all-male environment may try to act more like men in
order to fi t in and meet others’ expectations.86 In discussing being an African American in
a predominantly white business world, Kenneth I. Chenault, CEO of American Express,
says that he had to learn how to become comfortable dealing with multiple cultures with
different expectations. He states, “I learned very early on how to move between both
worlds and develop a level of comfort and confi dence no matter what world I’m operating
in.”87 Clearly, if you belong to the majority group, you do not have to learn how to act in
different worlds.
A third issue resulting from differences in social identities is that often minority group
members fear losing this social identity.88 Social identity is often a source of pride and
honor.89 Thus, being forced to “check their identity at the gate” creates a sense of loss and
discomfort for many people.
A fi nal issue related to differences in social identities concerns the fact that people
often evaluate others based on their membership in social groups. People tend to favor
members of their own groups because their group membership is often tied to feelings
of high self-esteem.90 We think people who belong to our own group must somehow be
better than those who do not belong. In other words, we tend to categorize people ac-
cording to in-group and out-group membership,91 and we tend to favor members of our
own group—the in-group—and disfavor those whom we have categorized as belonging
to an out-group. We often exaggerate the positive attributes of our own group and the
negative aspects of the out-group. Furthermore, we are more likely to have stereotypes
regarding out-group members and to ignore differences among out-group members.92
So, for example, members of the legal department, who have strong identities as lawyers,
may view other associates who are not lawyers as being similar, less savvy, and peripheral
to the success of the company. In contrast, the lawyers are more likely to see other lawyers
as individuals, and think they are smarter and are central to the company’s success. In
conclusion, social identity dynamics can be a roadblock to successful diversity manage-
ment because they foster forming in-groups and out-groups and can lead to stress and
dissatisfaction among those with minority identities.
Power Differentials
Power is not equally distributed among the individuals and groups in an organization.
Individuals gain power in many ways—by having expert knowledge or a powerful formal
position, by controlling valuable rewards or important resources, or by being irreplaceable,
for example.93 In some organizations that rely on selling, the individuals in the sales and
marketing departments have most of the power, whereas the individuals in the human
resources and accounting departments have less power. An executive secretary controlling
c02.indd 66c02.indd 66 12/08/10 10:44 AM12/08/10 10:44 AM
Roadblocks to Diversity 67
those who are allowed to meet with and speak to the CEO also has power. In essence, this
secretary controls everyone’s communication with top management.
On the other hand, people are also awarded or deprived of power and status for rea-
sons that have nothing to do with work life. On a societal level, groups of people have what
is called ascribed status and power. Ascribed status is status and power that is assigned
by cultural norms and depends on group membership.94 In other words, societal culture
defi nes who has power and who does not. In North America, women, racial and ethnic
minorities, and people with disabilities, among other groups, are traditionally perceived to
be of lower status than white men.95 Thus, members of these groups have traditionally had
less power in the workplace than white men. When such power differentials exist, they can
prevent an organization from developing an inclusive workplace for at least two reasons.
First, research has shown that high-status individuals speak more and use stronger
infl uence tactics than members of low-status groups.96 Thus, low-status individuals may
not have a chance to contribute as much to group problem-solving tasks. When people
do not feel free to speak up, a major benefi t of diversity is lost because different ideas and
viewpoints are not presented. This phenomenon also causes problems because it perpetu-
ates status differentials and may lead to frustration and dissatisfaction among people who
do not feel free to speak up.
Second, people belonging to groups with different amounts of power and status may
avoid interacting with one another and may form cliques with members of their own
groups.97 High-status groups may downgrade, ignore, or harass members of low-status
groups. Associates in low-status groups may stay away from high-status associates in order
to avoid rejection or humiliation. This tendency to form cliques undermines diversity ef-
forts by setting the stage for increased confl ict among groups.
Poor Structural Integration
You may have heard phrases such as “pink-collar ghetto” and “glass ceiling.” These phrases
refer to the tendency for women and members of racial and ethnic minority groups to
be “stuck” in certain occupations or at certain levels in an organization. Recall from the
earlier part of this chapter that one criterion for having a truly multicultural organization
is that people from traditionally underrepresented groups appear at all levels and in all
occupations. Exhibit 2-6 illustrates a well-integrated organization and a poorly integrated
organization.
Note in the fi gure that 35 percent of the employees in both Company A and Com-
pany B are either female and/or a member of a racial minority group. So if we look only at
the total number of employees, then we might conclude that both companies are equally
well integrated. Such a conclusion would be erroneous, however.
In Company A, on average across functional areas, only .5 percent of top manage-
ment jobs are held by women or minorities. At the same time, on average across functional
areas, 70 percent of the lowest-level jobs are held by women and minorities. These fi gures
indicate that women and minorities are extremely underrepresented in high-level posi-
tions and overrepresented in low-level (low-status, low-power, and low-pay) positions.
Furthermore, in Company A, women and racial minorities are severely underrepresented
in the areas of fi nance, marketing, and sales. Coca-Cola was sued by African Americans
because it resembled Company A (to some degree) despite having talented people in the
minority group. The company settled in 2000 for $192.5 million.98
ascribed status
Status and power that
is assigned by cultural
norms and depends on
group membership.
c02.indd 67c02.indd 67 12/08/10 10:44 AM12/08/10 10:44 AM
68 Chapter 2 Organizational Diversity
Contrast these patterns with those in Company B. In that company, women and mi-
norities are represented in all areas in proportion to their total representation in the com-
pany. Company B illustrates the ideal distribution for an inclusive organization—which
occurs infrequently.
Data compiled in 2003 by the Equal Employment Opportunity Commission suggest
that U.S. companies look more like Company A than Company B.99 White males made
up about 37 percent of the workforce in private industry but held about 56 percent of
the executive and managerial jobs. In contrast, they only held about 13 percent of lower-
level clerical jobs and 21 percent of service jobs. White women, who made up almost 33
percent of the workforce, held almost 55 percent of clerical jobs. Black people (both men
and women) made up almost 14 percent of the workforce but held less than 7 percent of
executive and managerial jobs. Black women were overrepresented in clerical and service
jobs, and black men were overrepresented in operations and laborer jobs. This pattern
held true for most other minority groups as well.
Why are social groups so unequally distributed across occupations and job levels?
Many explanations have been offered, with discrimination being a common one. Lack of
skills on the part of groups holding lower-level positions is also cited frequently. Whatever
the reason, poor integration of women and minorities in organizations can present several
roadblocks to creating a multicultural environment.
• Poor integration creates power and status differentials, which then become
associated with gender or race.
• Poor integration fosters negative stereotypes.
Poorly Integrated
Company A
Finance Marketing HR Sales
0% 0% 2% 0%
0% 1% 10% 2%
0% 5% 15% 5%
25% 25% 40% 26%
60% 65% 80%
Average
across
functions
.5%
3.25%
6.25%
29%
70%75%
Finance Marketing HR Sales
35% 35% 35% 35%
35% 35% 35% 35%
35% 35% 35% 35%
35% 35% 35% 35%
35% 35% 35%
Average
across
functions
35%
35%
35%
35%
35%35%
Top
Management
The numbers in each cell represent the percentage of people in each job level and functional area who are
female and/or racial and ethnic minority group members.
The total percentage of employees for both companies who are female and/or a racial ethnic minority is 35%.
Mid
Management
Supervisor
Staff
Line
Worker
L
e
ve
l
Functional Area
Well Integrated
Company B
Top
Management
Mid
Management
Supervisor
Staff
Line
Worker
L
e
ve
l
Functional Area
Exhibit 2-6 Examples of Poorly Integrated and Well-Integrated Organizations
c02.indd 68c02.indd 68 12/08/10 10:44 AM12/08/10 10:44 AM
Effectively Creating and Managing Diversity 69
• Where integration is poor overall, women and minorities who do reach higher
levels may have token status. That is, since they may be the only persons of their
race or gender in that type of job, they will be considered an exception.100
• Where integration is poor, most women and minorities may feel that it is
impossible for them to rise to the top.
Communication Problems
Communication can be a roadblock to establishing an effective diversity environment.
One potential communication problem arises when not everyone speaks the same lan-
guage fl uently. Associates who are less fl uent in the dominant language may refrain from
contributing to conversations. Furthermore, groups may form among those who speak the
same language, excluding those who do not speak that language. Finally, many misunder-
standings may occur because of language differences. For example, U.S. college students
often complain that having teachers who are not fl uent in English makes it diffi cult for
them to understand class lectures.
Another communication problem arises because different cultures have different
norms about what is appropriate. For example, African Americans, Hispanics, and Asians
are less likely than Anglo Americans to feel they can speak freely during meetings.101 Com-
mon areas of communication disagreement among cultures include the following:
• Willingness to openly disagree
• The importance of maintaining “face,” or dignity
• The way agreement is defi ned
• The amount of time devoted to establishing personal relationships
• Willingness to speak assertively
• Mode of communication (written, verbal)
• Personal space and nonverbal communication
While communication differences exist for people from different backgrounds, it is
important not to stereotype. Some individuals from a particular background will not share
the communication preferences often associated with that background.
Effectively Creating and Managing Diversity
Organizations face many roadblocks to creating multicultural environments, but these
roadblocks are not insurmountable. In this section, we discuss some strategies for effec-
tively creating and managing diversity.
Most large companies and many small companies have in recent years instituted some
type of diversity management plan. These plans have varied in effectiveness, from being
very successful at creating a diverse, inclusive, and productive workplace to having no ef-
fect or to actually having negative effects. Because so many diversity programs have been
instituted, there is substantial knowledge about what works and what does not work. The
U.S. Department of Commerce studied 600 fi rms that had been cited for having excellent
diversity climates.102 The study revealed several criteria for success, including commitment
by the organization’s leaders, integration of the program with the organization’s strategic
plan, and involvement of all associates.
c02.indd 69c02.indd 69 12/08/10 10:44 AM12/08/10 10:44 AM
70 Chapter 2 Organizational Diversity
Commitment of the Organization’s Leaders
The fi rst criterion for having an effective diversity program is genuine commitment from
the organization’s upper-level leadership. Insincere support of diversity is damaging. Lead-
ers must take ownership of diversity initiatives and effectively communicate the vision that
inclusiveness is important. Actions that corporate leaders have initiated to ensure that the
message comes across include the following:
• High-ranking leaders send relevant communications through multiple channels,
such as intranet postings, policy statements, formal newsletters, meetings,
speeches, and training programs.
• One high-ranking leader personally leads all diversity efforts. He holds town
meetings and eats lunch in the cafeteria to talk about diversity.
• Multiple high-ranking executives sponsor employee councils devoted to fostering
cross-cultural communication. The councils are all-inclusive—anyone who wants to
join can do so. Therefore, anyone can “have the ears” of executives on diversity issues.
• Managers at all levels are held accountable for advancing diversity initiatives.
The Managerial Advice feature focuses on ideas that managers can use to promote posi-
tive work environments. The actions recommended are valuable for associates but are most
important for managers because they have the strongest effects on the organization’s culture.
Integration with the Strategic Plan
The second criterion for effective diversity management requires that diversity be linked
to the organization’s strategic plan. That is, it is necessary to be clear about the ways in
which diversity can contribute to the strategic goals, directions, and plans of the organiza-
tion. The organization must develop ways of defi ning and measuring diversity effective-
ness and then use these measures in the strategic planning process. Common measures of
diversity effectiveness focus on:
• Increased market share and new customer bases
• External awards for diversity efforts
• Associates’ attrition rate
• Associates’ work satisfaction
• Associates’ and managers’ satisfaction with the workplace climate
Another tactic for elevating diversity to the strategic level involves making it a core
value and part of the formal mission statement of the organization. Many organizations
that truly value diversity express this as a core value and include their beliefs in a mission
statement. These statements go beyond the common catchphrase that “We are an affi rma-
tive action employer.” For example, one of six principles in Starbucks’ mission statement
is: “Embrace diversity as an essential component in the way we do business.” Another is:
“Provide a great work environment and treat each other with respect and dignity.”103
Associate Involvement
The third criterion for effective diversity management calls for the involvement of all
associates. Diversity programs can produce suspicion or feelings of unfairness in some as-
sociates, particularly if they misinterpret the program’s purpose. Some individuals may feel
they are excluded from the program, whereas others may feel that it infringes on benefi ts
c02.indd 70c02.indd 70 12/08/10 10:44 AM12/08/10 10:44 AM
Effectively Creating and Managing Diversity 71
MANAGERIAL ADVICE
Robin Ely, Debra Meyerson, and Martin Davidson are professors at Harvard Uni-
versity, Stanford University, and the
University of Virginia, respectively.
In conjunction with the human devel-
opment and organizational learning
professionals at Learning as Leader-
ship, they have developed several
principles designed to ensure that
members of various social identity
groups do not become trapped in low-
quality workplace relationships. These
principles are designed to encourage
engagement and learning. The prin-
ciples are perhaps best applied in the
context of individuals experiencing
uncomfortable events that are open
to interpretation, such as when the
member of a minority group is told by
someone from the majority that she is
being too aggressive, or when a man
is told by a woman that he is acting as
his grandfather might have acted. The
principles are listed below:
a. Pause to short circuit the emo-
tion and refl ect. Individuals who
have experienced an
uncomfortable event
should take a few mo-
ments to identify their
feelings and consider
a range of responses.
b. Connect with others
in ways that affi rm the
importance of relation-
ships. Individuals who
have experienced an
uncomfortable event
should reach out to
those who have caused the diffi culty,
thereby valuing relationships.
c. Question interpretations and ex-
plore blind spots. Individuals who
have experienced an uncomfort-
able event should engage in self-
questioning as well as the ques-
tioning of others. They should be
open to the interpretations that
others have of the situation, while
realizing that their own interpreta-
tions might be correct.
d. Obtain genuine support that
doesn’t necessarily validate initial
points of view but, rather, helps in
gaining broader perspective. Indi-
viduals who have experienced an
uncomfortable event should seek
input from those who will chal-
lenge their initial points of view on
the situation.
e. Shift the mindset. Individuals who
have experienced an uncomfort-
able event should be open to the
idea that both parties might need
to change to some degree.
Promoting a Positive Diversity Environment
Sources: R.J. Ely, D.E. Meyerson, and M.N. Davidson. 2006. “Rethinking Political Correctness,” Harvard Business
Review, 84 (September); Learning as Leadership, “Research,” 2007, at http://www.learnaslead.com/index.php.
©Tom Grill/Corbis
they are currently enjoying. It is important for diversity programs to address the needs of
both majority group members and minority group members. Organizations can use many
methods to obtain input from associates. Some of these include:
• Discussion groups made up of all types of associates who help in developing,
implementing, and evaluating the program
• Employee satisfaction surveys
• Cultural diversity audits, which help the company studying the diversity culture
and environment of the organization
• Informal employee feedback hotlines where associates can provide unsolicited
feedback
c02.indd 71c02.indd 71 12/08/10 10:44 AM12/08/10 10:44 AM
http://www.learnaslead.com/index.php
72 Chapter 2 Organizational Diversity
Another common way of involving associates in diversity programs is to develop and
support affi nity groups—groups that share common interests and serve as a mechanism
for the ideas and concerns of associates to be heard by managers. Affi nity groups are
also good sources of feedback about the effectiveness of diversity initiatives. Finally, these
groups can provide networking opportunities, career support, and emotional support to
their members. Ford Motor Company has the following affi nity groups: Ford-Employee
African American Ancestry Network; Ford Asian Indian Association; Ford Chinese Asso-
ciation; Ford Finance Network; Ford Gay, Lesbian, or Bisexual Employees; Ford Hispanic
Network Group; Professional Women’s Network; Ford’s Parenting Network; Women in
Finance; Ford Interfaith Network; Middle Eastern Community @ Ford Motor Company;
and Ford Employees Dealing with Disabilities.104
Finally, another way of involving all associates is through training. Training programs
often include an explanation of the business necessity for effectively managing diversity,
along with empathy training, cross-cultural knowledge instruction, and exercises to help
associates avoid stereotyping and engaging in offensive or prejudicial treatment of others.
To create a truly inclusive environment, diversity programs also need to teach people how
to value and respect diversity rather than just tolerate it.
Denny’s, the U.S. restaurant chain, is an example of a company that has implemented
the three aspects of diversity management discussed here. Following lawsuits and settle-
ments in the 1990s, Jim Anderson became the CEO in 1996 and drove true commitment
to diversity. Anderson himself was committed to building what Roosevelt Thomas, an
expert on corporate diversity, terms a diversity-mature organization, in which the mission
and vision of the company includes a diversity management component.
To fully integrate the management of diversity into its mission, Denny’s requires all
managers and associates to participate in diversity training sessions. In addition, they are
held accountable for their behavior. Associates who engage in inappropriate behavior are
THE STRATEGIC LENS
O rganizational diversity, when managed effectively, has many benefi ts for organiza-
tions. In general, effectively managed
diversity programs contribute to an
organization’s ability to achieve and
maintain a competitive advantage.
Diversity in teams at all levels can
be helpful in solving complex prob-
lems because heterogeneous teams
integrate multiple perspectives. This
benefi t applies to the upper-echelon
management team as well as to proj-
ect teams, such as new-product-de-
velopment teams, much lower in the
organization. Not only can the diver-
sity help resolve complex problems,
but it also better mirrors U.S. society.
Thus, it signals to potential associates
and potential customers that the orga-
nization understands and effectively
uses diversity. As a result, the organi-
zation has a larger pool of candidates
for potential associates from which it
can select the best. In addition, the
organization is likely to have a larger
potential market because of its under-
standing of the products and services
desired by a diverse marketplace.
Having a diverse organization that
refl ects the demographic composition
of U.S. society is smart business.106
Critical Thinking Questions
1. How does organizational diversity
contribute to an organization’s
competitive advantage?
2. What actions are required to
create diversity in an organization,
particularly in one that has homo-
geneous membership at present?
3. How does diversity in an organi-
zation affect its strategy?
c02.indd 72c02.indd 72 12/08/10 10:44 AM12/08/10 10:44 AM
What This Chapter Adds to Your Knowledge Portfolio 73
put on notice and must indicate how they will change their behavior in the future. Those
who do not change their behavior are terminated. More blatant transgressions, such as
racial slurs, result in immediate termination.
Overall, companies such as Denny’s use diversity initiatives in at least seven different
areas:105
1. Recruiting (e.g., diverse recruiting teams, minority job fairs)
2. Retention (e.g., affi nity groups, on-site child care)
3. Development (e.g., mentoring programs, leadership development programs)
4. External partnerships (e.g., minority supplier programs, community outreach)
5. Communication (e.g., addresses by high-ranking leaders, newsletters)
6. Training (e.g., awareness training, team building)
7. Staffi ng and infrastructure (e.g., dedicated diversity staffs, executive diversity councils).
What This Chapter
Adds to Your Knowledge
Portfolio
In this chapter we discussed the importance of di-
versity to organizations and the need to effectively
manage diversity. We also discussed the forces of
change that have made diversity a primary concern
of many organizations, and we described some of
the more common roadblocks to successfully man-
aging diversity. Finally, we discussed the essential
components of an effective diversity program. To
summarize, we made the following points:
• Organizational diversity refers to differences
among the individuals in an organization.
Important differences are those that are
personally important to people and affect
the way in which they perceive the world.
Common dimensions of diversity include
race, ethnicity, gender, disability, functional
area, sexual orientation, and parenthood.
• Diversity programs are aimed at developing
inclusive work cultures, which are impor-
tant in high-involvement work environ-
ments. Affi rmative action programs are
aimed at making sure there is fair represen-
tation or numbers of various groups within
jobs and organizations. Affi rmative action
programs can be legally mandated or vol-
untarily adopted.
?back to the knowledge objectives
1. What is organizational diversity, and how does di-
versity management differ from affi rmative action? Do
these kinds of programs have anything in common?
2. Distinguish between multicultural, plural, and mono-
lithic organizations. How might these organizations dif-
fer in the types of policies they use? For example, how
would they differ in terms of staffi ng practices?
3. What trends can be seen in the demographic charac-
teristics of the U.S. population? What are the implica-
tions of these trends for organizational diversity?
4. What other changes are occurring in the environment
that contribute to the importance of managing diversity
effectively? Why do these changes have this effect?
5. Why is successfully managing diversity important to high-
involvement work organizations? Give specifi c examples.
6. What problems do discrimination, prejudice, and stereo-
typing create in an organization attempting to manage a
diverse workforce?
7. How do social identities, power differentials, and poor
structural integration affect the successful management
of diversity?
8. What does a diversity program need in order to be
effective? How would you determine whether your
diversity program was effective?
c02.indd 73c02.indd 73 12/08/10 10:44 AM12/08/10 10:44 AM
74 Chapter 2 Organizational Diversity
• Multicultural organizations have diverse associates and are inclusive of all associ-
ates. Plural organizations have reasonably diverse associates and tolerate diversity.
Monolithic organizations are homogeneous and do not tolerate diversity.
• The U.S. population is getting older and more diverse in terms of race and ethnic-
ity. Other changes that are occurring in the environment include an increasing ser-
vice economy, increasing globalization, and increasing need for teamwork. These
changes make management of diversity more important today than ever.
• Successfully managing diversity is important because it can lead to more com-
mitted, better satisfi ed, better-performing employees, attraction of the best talent,
better group decision making, and potentially better fi nancial performance for
the organization. Effectively managing diversity also ensures that the moral prin-
ciple that everyone be treated fairly will be upheld. Furthermore, effective diversity
management can result in fewer lawsuits for discrimination.
• Discrimination, prejudice, stereotyping, differing social identities, power differ-
entials, poor structural integration, and communication concerns have a negative
impact on managing a diverse workforce.
• Organizations that successfully manage diversity have senior managers who fully
support diversity initiatives, tie their diversity plans to the overall strategic goals of
the organization, and ensure involvement from all associates through a variety of
mechanisms.
Thinking about Ethics
1. Suppose that an organization has discriminated in the past. Should it now simply stop its
discriminatory practices, or should it also take specifi c actions to increase its diversity by
targeting, hiring, and promoting minorities ahead of nonminorities? Discuss.
2. Should all managers and associates in an organization be required to undergo diversity training
regardless of their desire to do so? Why or why not?
3. Are there any circumstances in which it is appropriate to discriminate against a particular class
of people (such as women)? If so, explain the circumstances. If not, explain why.
4. Women are not a minority in the population but represent a minority in the U.S. workforce,
particularly in some occupations. Why has this occurred in U.S. society (or your home
country, if applicable)?
5. Should all cultures and modes of conduct be tolerated, even if they confl ict with the values of
the organization? Why or why not?
6. What percentage of the organization’s budget should be invested in building and maintaining
an effective diversity management program? How should this percentage compare with other
major budget items?
Key Terms
diversity, p. 50
multicultural
organization, p. 51
plural organization, p. 51
monolithic
organization, p. 52
prejudice, p. 61
discrimination, p. 61
modern racism, p. 61
stereotype, p. 62
social identity, p. 65
ascribed status, p. 67
c02.indd 74c02.indd 74 12/08/10 10:44 AM12/08/10 10:44 AM
Building Your Human Capital 75
Human Resource Management Applications
The Human Resource Management (HRM) function plays a key role in a fi rm’s capability to
manage diversity. Often diversity offi cers and initiatives are housed within HRM departments. The
following are several activities that an HRM department can use to manage diversity.
A major function of HRM departments is developing, conducting, and evaluating training pro-
grams. Diversity training programs are integral to any diversity management effort. HRM depart-
ments are also likely to evaluate the effectiveness of these programs.
In many organizations, employee recruitment is centralized through the HRM department. Thus,
they are concerned with advertising to, locating, and attracting potential associates from groups
traditionally underrepresented in the organization.
Employee selection may also be centralized through the HRM department. In order to facilitate
an organization’s diversity goals, the HRM department must make certain that methods used to
hire associates (e.g., interviews, job knowledge test, personality tests) are not biased against certain
group members.
An important aspect of many diversity programs is an organizational diversity climate audit,
which surveys associates to determine their feeling of inclusion and satisfaction with diversity initia-
tives. This audit is often the responsibility of the HRM department.
building your human capital
What’s Your DQ (Diversity Quotient)?
How well do you handle diversity? Your ability to be fl exible, work with many different types of
people, and deal with ambiguous situations will be crucial to a successful career in the twenty-fi rst
century. The following assessment will allow you to determine whether you have had the experience
necessary to help in successfully navigating a diverse work environment.
Use the following scale to answer the questions below:
1 point = never
2 points = once or twice
3 points = three or four times
4 points = four or more times
In the last month, how often did you …?
1. See a foreign movie.
2. Speak a language other than your fi rst language.
3. Visit an art or history museum.
4. Have a conversation with someone who was of a different race.
5. Have a conversation with someone who was from a different country.
6. Attend a social event where at least half of the people differed from you in race or ethnic
background.
7. Visit a church that was of a religion different from yours.
8. Visit a place where people spoke a language different from your fi rst language.
9. Do something you’ve never done before.
10. Attend a cultural event (art show, concert).
11. Eat ethnic food.
12. Visit a foreign country.
13. Watch a program about world (non-U.S.) history.
14. Read a book about another culture.
c02.indd 75c02.indd 75 12/08/10 10:44 AM12/08/10 10:44 AM
76 Chapter 2 Organizational Diversity
15. Watch a movie or TV show about another culture.
16. Attend a social event where you didn’t know anyone.
17. Read a book written by a foreign author.
18. Listen to music from a different culture.
19. Attend an event where you were in a minority based on any demographic characteristic
(age, gender, race, ethnicity, religion, sexual orientation).
20. Learn something new about a country or culture other than your own.
21. Study a different language.
22. Attend an event about a different culture (an ethnic festival, a concert by musicians from a
different culture, a student meeting of an ethnic group).
23. Have a conversation with someone from a different social class.
24. Develop a friendship with someone from a different background.
25. Discuss world affairs with someone who disagreed with you.
Scoring: Add up your total points for the 25 questions.
Scoring can range from 25 to 100
25–39: Your current environment is rather homogeneous. You can increase your DQ by making a
concerted effort to reach out to people who are different from you, attend events that expose you
to different cultures, and learn about people and cultures that differ from yours. Your score may be
low because you live in an area where there is little diversity in people or cultural events. You will
need to go out of your way to gain exposure to different cultures.
40–59: Your current environment could be more diverse than it currently is. You can increase
your DQ by making a concerted effort to reach out to people who are different from you, at-
tend events that expose you to different cultures, and learn about people and cultures that differ
from yours.
60–79: Your environment is fairly culturally diverse. Look more closely at your scores for each
question and determine whether there are any areas in which you can broaden your horizons even
further. Perhaps, for example, you read and watch materials that expose you to different cultures
but do not personally interact frequently with people who are different from you. If that is the case,
join a club where you are likely to meet people different from yourself.
80–100: Your environment is quite culturally diverse. You experience a great deal of cultural variety,
which should help prepare you for working in a culturally diverse work environment.
an organizational behavior moment
Project “Blow Up”
Big State University (BSU) is proud of the success of its inter-
national executive MBA (EMBA) program. The program is
designed to bring together promising middle- and higher-level
managers from around the globe for an exceptional learning ex-
perience. BSU’s EMBA program has been ranked very highly by
the business press. Alumni praise the program for its excellent
faculty, networking opportunities, and exposure to colleagues
from around the world. Students in the program can either at-
tend weekend classes on BSU’s campus or participate through
distance-learning technology from campuses around the world.
One of the defi ning features of the program is the fi rst-year
team project. Students are randomly assigned to fi ve-member
teams. Each team has a faculty advisor, and each must develop a
business plan for a startup company. A major part of the business
plan involves developing a marketing strategy. The teams begin
the project during orientation week and fi nish at the end of the
next summer. Each team must turn in a written report and a busi-
ness plan and make an hour-long presentation to the other stu-
dents and faculty as well as several executives from well-respected
multinational companies. Students must earn a passing grade on
c02.indd 76c02.indd 76 12/08/10 10:44 AM12/08/10 10:44 AM
An Organizational Behavior Moment 77
the project to graduate from the program. The project is also a
good way of meeting and impressing important executives in the
business community.
The A-Team consists of fi ve people, who did not know each
other before the project began. They are:
• Rebecca—A 27-year-old marketing manager for a large,
high-end Italian fashion company. Rebecca is a white
female of Italian descent who was born and raised in
New York City. Rebecca earned her bachelor’s degree in
business at the University of Virginia’s McIntire Business
School when she was 22. She speaks English, Italian, and
Spanish fl uently. She speaks a little German and Japa-
nese as well. Rebecca is single. Her job involves analyz-
ing worldwide markets and traveling to the 136 stores
around the world that carry her company’s clothes. She
hopes the EMBA from BSU will help her to be promoted
to an executive position.
• Aran—The 52-year-old founder and CEO of an Egyp-
tian management consulting fi rm. His fi rm employs 12
people who consult with local companies on issues in-
volving information systems. Aran is an Egyptian male
who is a fairly devout Muslim. He earned his business
degree 25 years ago at the American University in Cairo.
He speaks English and Arabic fl uently. Aran is married
with two adult children. He is attending BSU’s program
because he wants to retire from his consulting fi rm and
become an in-house information systems consultant to a
large multinational fi rm.
• Katie—A 30-year-old fi nancial analyst at a large Wall Street
fi rm. At present, Katie’s job requires little travel, but she
works long hours as a fi nancial analyst. Katie is an Ameri-
can female who does not consider herself to have any strong
ethnic roots. She earned her business degree two years ago
from New York University. Before going to college, she
worked as a bank teller on Long Island. She was concerned
about her lack of progress and went back to college to get
a degree. She now wants to further her education to open
up even more opportunities. Katie speaks only English. She
is married but has no children. However, she cares for her
elderly mother, who lives nearby in New Jersey.
• Cameron—A 23-year-old Internet entrepreneur who
heads his own small but successful company. He is the
youngest student BSU has ever accepted. He was some-
thing of a child prodigy, graduating from Georgia Tech at
the age of 19 with a degree in computer science. Cameron
is a single, African American male who has lived all over
the United States. His company is based in Austin, Texas.
He speaks only English. He is attending BSU’s program
because, though confi dent of his technical expertise, he
would like to learn more about business, since he is plan-
ning to expand his company.
• Pranarisha—A 31-year-old manager for a nongovern-
mental organization (NGO) that provides support to
poverty-stricken areas of Thailand. Pranarisha’s job is to
coordinate efforts from a variety of worldwide charitable
organizations. She speaks four languages fl uently; however,
she is not fl uent in English. She graduated from the most
prestigious university in Thailand. She is married with a
four-year-old son and is a devout Buddhist. She is attend-
ing BSU’s program at the request of her organization, so
she can help to make the organization more effi cient.
The A-Team was doomed almost as soon as the project
began. The team’s fi rst task was to decide how roles would be al-
located to individuals on the team.
Aran: Before we begin, we need to decide what everyone will be
doing on this project, how we will divide and coordinate the
work. Since I have the most experience, I should serve in the
executive function. I’ll assign and oversee everyone’s work. I
will also give the presentation at the end of the project, since
I know how to talk to important people. Cameron will be
in charge of analyzing the fi nancial feasibility of our project,
developing the marketing plan, and evaluating the technical
operations. The girls will assist him in …
Rebecca(Interrupting): Hold on a minute! First, we are not
girls! Second, Cameron, Katie, and I decided last night over
beers at happy hour that I should handle the marketing plan,
Cameron the technical aspects, and Katie the fi nancial aspects.
You can serve as the coordinator, since you’re not going to be
attending class on campus—you can keep track of everything
when we submit electronic reports.
Cameron: Yeah—your role would be to just make sure everyone
is on the same page, but we’d individually decide how to con-
duct our own projects.
Aran: This team needs a leader and I …
Cameron and Katie(in unison): Who says?
Rebecca: We’re all responsible adults, and since the three of us
are most accustomed to the Western way of doing business—
which as we all know focuses on individual empowerment—
then we’ll get the most out of the project doing it our way.
Aran: You are all young and inexperienced. What do you know
about the business world?
Katie: I know a lot more about fi nance than you.
Rebecca: Get with the twenty-fi rst century. Just because we’re
women doesn’t mean …
Cameron: He isn’t just ragging on women. He’s ragging on me, too.
Katie: Yeah, but at least he gave you a real job. You’re a guy—
“Boy Wonder.”
c02.indd 77c02.indd 77 12/08/10 10:44 AM12/08/10 10:44 AM
78 Chapter 2 Organizational Diversity
Cameron: What kind of crack was that? After all, you two didn’t
start your own company. You’re a number cruncher, and Re-
becca sells dresses, and …
Rebecca: I think we need to stop this right now, and the four of
us need to decide once and for all who is doing what!
Katie: Four of us? Wasn’t our team supposed to have fi ve people?
Where’s that other woman? The one from Vietnam? Parisa?
Prana? Whatever her name is?
At this point, Professor Bowell, the group’s advisor, walks
in and tells them that the team is to be disbanded. Pranarisha
had walked out of the group meeting (without anyone noticing)
and informed Dr. Bowell that she just couldn’t take it any longer.
She had come here to learn how to run an organization more
effi ciently and how to work with businesspeople. However, she
was so disheartened by the way the group was acting, she was
going to quit the program. This was the fi rst time in over 10 years
that Dr. Bowell had heard of anyone quitting the program in the
fi rst week because of the behavior of the members of her team.
The advisor just didn’t see any way that this group of individuals
could get their act together to become a functioning team.
Discussion Questions
1. What happened with the A-Team? Why did the group
process break down? What dimensions of diversity were
responsible for the confl ict?
2. Describe which barriers to effectively managing diversity
were present in this situation.
3. What could have been done to manage the group process
better?
team exercise
What Is It Like to Be Different?
One reason people have a diffi cult time dealing with diversity in others or understanding why it is
important to value and respect diversity is that most people spend most of their lives in environ-
ments where everyone is similar to them on important dimensions. Many people have seldom been
in a situation in which they felt they didn’t belong or didn’t know the “rules.” The purpose of this
exercise is to have you experience such a situation and open up a dialogue with others about what
it feels like to be different and what you can personally learn from this experience to become better
at managing diversity in the future.
STEP 1: Choose an event that you would not normally attend and at which you will likely be in
the minority on some important dimension. Attend the event.
• You can go with a friend who would normally attend the event, but not one who will also
be in a minority.
• Make sure you pick a place where you will be safe and where you are sure you will be wel-
comed, or at least tolerated. You may want to check with your instructor about your choice.
• Do not call particular attention to yourself. Just observe what is going on and how you feel.
Some of you may fi nd it easy to have a minority experience, since you are a minority group
member in your everyday life. Others may have a more diffi cult time. Here are some examples of
events to consider attending:
• A religious service for a religion totally different from your own.
• A sorority or fraternity party where the race of members is mostly different from your own.
• A political rally where the politics are different from your own.
STEP 2: After attending the event, write down your answers to the following questions:
1. How did you feel being in a minority situation? Did different aspects of your self-identity
become salient? Do you think others who are in minority situations feel as you did?
2. What did you learn about the group you visited? Do you feel differently about this group now?
3. What did people do that made you feel welcome? What did people do that made you feel self-
conscious?
c02.indd 78c02.indd 78 12/08/10 10:44 AM12/08/10 10:44 AM
Endnotes 79
4. Could you be an effective team member in this group? How would your differences with
group members impact on your ability to function in this group?
5. What did you learn about managing diversity from this exercise?
STEP 3: Discuss the results of the exercise in a group as assigned by the instructor.
Endnotes
1. Bamattre, W. (former LAFD Fire Chief ), as reported in Rich-
ardson, L. 2006. Audit faults fi re department. Los Angeles Times,
January 27, B.4.
2. See, for example, Ball, P., Monaco, G., Schmeling, J., Schartz, H.,
Blanck, P. 2005. Disability as diversity in Fortune 100 companies.
Behavioral Sciences and Law, 23: 97–121; Jolna, K.A. 2003. Be-
yond race and gender? Doctoral Dissertation. Atlanta, GA: Emory
University; Society of Human Resources Management. 1997.
SHRM survey of diversity of programs. Alexandria, VA: Society for
Human Resources Management.
3. Samdahl, E. November 6, 2009. “Most Companies Don’t Mea-
sure the Bottom-Line Impact of Diversity Programs,” at http://
hrmtoday.com.; Campbell, T. 2003. Diversity in depth.HRMagazine,
48(3): 152.
4. Johnson, K. 2007. Kevin Johnson, Diversity Executive Work-
group Sponsor, on executive commitment. At http://www.micro-
soft.com/about/diversity/exec.mspx.
5. Schneider, B., Goldstein, H.W., & Smith, D.B. 1995. The ASA
framework: An update. Personnel Psychology, 48: 747–773.
6. Ely, R.J., & Thomas, D.A. 2001. Cultural diversity at work: The
effects of diversity perspectives on work group processes and out-
comes. Administrative Science Quarterly, 46: 229–274.
7. See, for example, Kochan, T., Bezrukova, K., Ely, R., Jackson, S.,
Joshi, S., Jehn, K., Leonard, J., Levine, D., & Thomas, D. 2003.
The effects of diversity on business performance: Report of the di-
versity research network. Human Resource Management, 42: 3–21.
8. For additional commentary on the various dimensions, see the
following: Ball, C., & Haque, A. 2003. Diversity in religious
practice: Implications of Islamic values in the public workplace.
Public Personnel Management, 32: 315–328; Bantel, K.A., & Jack-
son, S.E. 1989. Top management and innovations in banking:
Does the composition of the top team make a difference? Strategic
Management Journal, 10: 107–124; Barsade, S.G., Ward, A.J.,
Turner, J.D.F., & Sonnenfeld, J.A. 2000. To your heart’s content:
A model of affective diversity in top management teams. Admin-
istrative Science Quarterly, 45: 802–837; Cummings, J.N. 2004.
Work groups, structural diversity, and knowledge sharing in a
global organization. Management Science, 50: 352–365; Ely, R.J.,
& Thomas, D.A. 2001. Cultural diversity at work: The effects
of diversity perspectives on work group processes and outcomes.
Administrative Science Quarterly, 46: 229–274; Kochan et al., The
effects of diversity on business performance; Richard, O.C., Ford,
D., & Ismail, K. 2006. Exploring the performance effects of visi-
ble attribute diversity: The moderating role of span of control and
organizational life cycle. International Journal of Human Resource
Management, 17: 2091–2109.
9. Konrad, A.M. 2003. Special issue introduction: Defi ning the do-
main of workplace diversity scholarship. Group and Organization
Management, 28: 4–18.
10. Williams, K.Y., & O’Reilly, C.A. 1998. Demography and diver-
sity in organizations: A review of 40 years of research. In L.L.
Cummings & B.M. Staw (Eds.), Research in Organizational
Behavior, 20: 77–140. Greenwich, CT: JAI Press, p. 81.
11. Ibid.
12. See, for example, Jehn, K.A., Northcraft, G.B., & Neale, M.A.
1999. Why differences make a difference: A fi eld study of diver-
sity, confl ict, and performance in groups. Administrative Science
Quarterly, 44: 741–763.
13. Kanter, R.M. 1977. Men and women of the corporation. New York:
Basic Books.
14. Texas Instruments. 2009. Diversity and inclusion. At http://www.
ti.com/corp/docs/csr/empwellbeing/diversity.
15. Microsoft. 2007. Message from Claudette Whiting. At http://
www.microsoft.com/about/diversity/fromoffi ce.mspx?pf=true.
16. Bank of America. 2007. Fact sheets. At http://careers.bankofa-
merica.com/learnmore/factsheets.asp.
17. U.S. Department of Labor. 2002. Facts on Executive Order
11246—Affi rmative Action. At www.dol.gov/esa/regs/compli-
ance/ofccp/aa.htm.
18. Thomas, R.R., Jr. 1992. Managing diversity: A conceptual frame-
work. In S.E. Jackson & Associates (Eds.), Diversity in the work-
place. New York: Guilford Press, pp. 306–317.
19. Cox, T.H., Jr. 1993. Cultural diversity in organizations: Theory,
research, and practice. San Francisco, CA: Berrett-Koehler Publishers.
20. Gilbert, J.A., & Ivancevich, J.M. 2000. Valuing diversity: A tale of
two organizations. Academy of Management Review, 14: 93–106.
21. Farh, J.L., Dobbins, G.H., & Cheng, B. 1991. Cultural relativity
in action: A comparison of self-ratings made by Chinese and U.S.
workers. Personnel Psychology, 44: 129–147.
22. Cox, Cultural diversity in organizations.
23. See, for example, Campbell, T. 2003. Diversity in depth. HR-
Magazine, 48(3): 152.
24. Farouky, J. 2007. The many faces of Europe. Time International,
169 (9): 16–20.
25. U.S. Department of Labor. 2000. Working in the 21st century. At
http://www.bls.gov/opub/home.htm.
26. U.S. Equal Employment Opportunity Commission. 2003. Oc-
cupational employment in private industry by race/ethnic group/
sex, and by industry. At http://www.eeoc. gov/stats/jobpat/2003/
national.html.
27. U.S. Department of Labor, Working in the 21st century.
28. Ibid.
c02.indd 79c02.indd 79 12/08/10 10:44 AM12/08/10 10:44 AM
http://hrmtoday.com
http://hrmtoday.com
http://www.micro-soft.com/about/diversity/exec.mspx
http://www.micro-soft.com/about/diversity/exec.mspx
http://www.ti.com/corp/docs/csr/empwellbeing/diversity
http://www.ti.com/corp/docs/csr/empwellbeing/diversity
http://www.microsoft.com/about/diversity/fromoffice.mspx?pf=true
http://www.microsoft.com/about/diversity/fromoffice.mspx?pf=true
http://careers.bankofa-merica.com/learnmore/factsheets.asp
http://careers.bankofa-merica.com/learnmore/factsheets.asp
www.dol.gov/esa/regs/compli-ance/ofccp/aa.htm
www.dol.gov/esa/regs/compli-ance/ofccp/aa.htm
http://www.bls.gov/opub/home.htm
http://www.eeoc.gov/stats/jobpat/2003/national.html
http://www.eeoc.gov/stats/jobpat/2003/national.html
80 Chapter 2 Organizational Diversity
29. Ibid.
30. Bureau of Labor Statistics. 2005. Economic and employment
projections. At http://www.bls.gov/news.release/ecopro.toc.htm.
31. Ibid.
32. See, for example, Jackson, S.E., & Alvarez, E.B. 1992. Working
through diversity as a strategic imperative. In S.E. Jackson &
Associates (Eds.), Diversity in the workplace, pp. 13–29.
33. U.S. Department of Commerce. 2007. FT900: U.S. International
trade in goods and services. At http://www.census. gov/foreign-
trade/Press-Release/current_press_release/press.html#current.
34. Ibid.
35. Hitt, M.A., Ireland, D.I., & Hoskisson. 2007. Strategic manage-
ment: Competitiveness and globalization (7th ed.). Stamford, CT:
Thompson Learning.
36. Whole Foods Market. 2007. Our core values. At http://www.
wholefoodsmarket.com/company/corevalues.html.
37. Cox, T.H., & Blake, S. 1991. Managing cultural diversity: Impli-
cations for organizational competitiveness. Academy of Manage-
ment Executive, 5(3) 45–56; Jackson & Alvarez, Working through
diversity as a strategic imperative.
38. Eisenberger, R., Huntington, R., Hutchison, S., & Sowa, D. 1986.
Perceived organizational support. Journal of Applied Psychology, 71:
500–507; Eisenberger, R., Fasolo, P., & Davis-LaMastro, V. 1990.
Perceived organizational support and employee diligence, commit-
ment, and innovation. Journal of Applied Psychology, 75: 51–59.
39.Cox, Cultural diversity in organizations; McKay, P.F., Avery, D.R.,
& Morris, M.A. 2008. Mean racial differences in employee sales
performance: The moderating role of diversity climate. Personnel
Psychology, 61:349–374.
40. Hicks-Clarke, D., & Iles, P. 2000. Climate for diversity and its
effects on career and organizational perceptions. Personnel Review,
29: 324–347.
41. For research on these outcomes, see: Colquitt, J.A., Conlon,
D.E., Wesson, M.J., Porter, C.O.L.H., & Ng, K.Y. 2001. Justice
at the millennium: A meta-analytic review of 25 years of organiza-
tional justice research. Journal of Applied Psychology, 86: 425–445;
Goldman, B.M. 2001. Toward an understanding of employment
discrimination claiming by terminated workers: Integration of
organizational justice and social information processing theories.
Personnel Psychology, 54: 361–386; Goldman, B.M. 2003. The
application of referent cognitions theory to legal-claiming by
terminated workers: The role of organizational justice and anger.
Journal of Management, 29: 705–728; Skarlicki, D.P., & Folger,
R. 2003. Broadening our understanding of organizational retalia-
tory behavior. In R.W. Griffi n & A.M. O’Leary-Kelly (Eds.), The
darkside of organizational behavior. San Francisco, CA: Jossey-
Bass, pp. 373–402.
42. Kossek, E.E., & Zonia, S.C. 1993. Assessing diversity climate: A
fi eld-study of reactions to employer efforts to promote diversity.
Journal of Organizational Behavior, 14: 61–81.
43. Mollica, K.A. 2003. The infl uence of diversity context on white
men’s and racial minorities’ reactions to disproportionate group
harm. Journal of Social Psychology, 143: 415–431. Jehn, North-
craft, & Neale, Why differences make a difference.
44. Bantel, K.A., & Jackson, S.E. 1989. Top management and inno-
vations in banking: Does the composition of the top team make a
difference? Strategic Management Journal, 10: 107–124; Jackson,
S.E. 1992. Consequences of group composition for the interper-
sonal dynamics of strategic issue processing. Advances in Strategic
Management, 8: 345–382.
45. For research related to these dimensions, see: Hambrick, D.C.,
Cho, S.T., & Chen, M.J. 1996. The infl uence of top manage-
ment team heterogeneity on fi rm’s competitive moves. Adminis-
trative Science Quarterly, 41: 659–684; Jackson, S.E., May, K., &
Whitney, K. 1995. Diversity in decision making teams. In R.A.
Guzzo & E. Salas (Eds.), Team effectiveness and decision making in
organizations. San Francisco, CA: Jossey-Bass, pp. 204–261; Jehn,
Northcraft, & Neale, Why differences make a difference; Wood,
W. 1987. Meta-analysis of sex differences in group performance.
Psychological Bulletin, 102: 53–71; Zajac, E.J., Golden, B.R., &
Shortell, S.M. 1991. New organizational forms for enhancing in-
novation: The case of internal corporate joint ventures. Manage-
ment Science, 37: 170–184.
46. Grensing-Phophal, L. 2002. Reaching for diversity: What minor-
ity workers hope to get from diversity programs is what all em-
ployees want in the workplace. HRMagazine, 47 (5): 52–56.
47. Williams & O’Reilly, Demography and diversity in organizations.
48. Van Knippenberg, D., & Schippers, M.C. 2007. Work group di-
versity. Annual Review of Psychology, 58: 515–541.
49. See, for example, Li, J.T., & Hambrick, D.C. 2005. Factional
groups: A new vantage on demographic faultlines, confl ict, and
disintegration in work teams. Academy of Management Journal, 48:
794–813; Molleman, E. 2005. Diversity in demographic charac-
teristics, abilities and personality traits: Do faultlines affect team
functioning? Group Decision and Negotiation, 14: 173–193; Rico,
R., Molleman, E., Sanchez-Manzanares, M., & Van der Vegt, G.S.
2007. The effects of diversity faultlines and team task autonomy
on decision quality and social integration. Journal of Management,
33: 111–132; Sawyer, J.E., Houlette, M.A., & Yeagley, E.L. 2006.
Decision performance and diversity structure: Comparing fault-
lines in convergent, crosscut, and racially homogeneous groups.
Organizational Behavior and Human Decision Processes, 99: 1–15.
50. Williams & O’Reilly, Demography and diversity in organizations.
51. See, for example, Richard, O.C., Kochan, T.A., & McMillan-
Capehart. 2002. The impact of visible diversity on organizational
effectiveness: Disclosing the contents in Pandora’s black box. Jour-
nal of Business and Management, 8: 265–291; Pelled, L.H. 1996.
Demographic diversity, confl ict, and work group outcomes: An
intervening process theory. Organization Science, 7: 615–631.
52. Williams & O’Reilly, Demography and diversity in organizations.
53. Hackman, J.R. 2002. Leading teams: Setting the stage for great per-
formances. Boston, MA: Harvard Business School Press.
54. Richard, Kochan, & McMillan-Capehart, The impact of visible
diversity on organizational effectiveness.
55. Ibid.
56. Cox, Cultural diversity in organizations; Cox & Blake, Managing
cultural diversity.
57. Richard, O.C. 2000. Racial diversity, business strategy, and fi rm
performance: A resource based view. Academy of Management
Journal, 43: 164–177.
58. Kochan, T., Bezrukova, K., Ely, R., Jackson, S., Joshi, A., Jehn,
K. Leonard, J., Levine, D., & Thomas, D. 2003. The effects
c02.indd 80c02.indd 80 12/08/10 10:44 AM12/08/10 10:44 AM
http://www.bls.gov/news.release/ecopro.toc.htm
http://www.wholefoodsmarket.com/company/corevalues.html
http://www.wholefoodsmarket.com/company/corevalues.html
http://www.census.gov/foreigntrade/Press-Release/current_press_release/press.html
http://www.census.gov/foreigntrade/Press-Release/current_press_release/press.html
Endnotes 81
of diversity on business performance: Report of the Diversity
Research Network. Human Resource Management, 42: 3–21.
59. See, for example, Fletcher, A.A. 2000. Business and race: Only
halfway there. Fortune, 141 (5): 76–77.
60. See, for example, Westphal, J., & Zajac, E. 1997. Defections from
the inner circle: Social exchange, reciprocity and the diffusion of
board independence in U.S. corporations. Administrative Science
Quarterly, 42: 161–183.
61. Sellers, P. 2004. By the numbers: Women and profi ts. Fortune, at
http://www.fortune.com/fortune/subs/article/0,15114,582783,
00.html.
62. Siciliano, J.I. 1996. The relationship of board member diversity
to organizational performance. Journal of Business Ethics, 15:
1313–1320.
63. Hillman, A.J., Cannella, A.A., Jr., & Harris, I.C. 2002. Women
and racial minorities in the boardroom: How do directors differ?
Journal of Management, 28: 747–763.
64. Ibid.
65. Bantel, & Jackson, Top management and innovations in bank-
ing; Hambrick, Cho, & Chen, The infl uence of top management
team heterogeneity on fi rm’s competitive moves.
66. Wright, P., Ferris, S.P., & Kroll, M. 1995. Competitiveness
through management of diversity: Effects on stock price evalua-
tion. Academy of Management Journal, 38: 272–287.
67. Cowell, A. 2005. What Britain can tell France about rioters. The
New York Times, November 20, 4.4.
68. Dovidio, J.F., Gaertner, S.L., Kawakami, K., & Hodson, G. 2002.
Why can’t we just get along? Interpersonal biases and interracial dis-
trust. Cultural Diversity and Ethnic Minority Psychology, 8: 88–102.
69. Bobo, L.D. 2001. Racial attitudes and relations at the close of the
twentieth century. In N.J. Smelser, W.J. Wilson, & F. Mitchell
(Eds.), Racial trends and their consequences (Vol. 1). Washington,
DC: National Academic Press, pp. 264–301.
70. McConahay, J.B. 1986. Modern racism, ambivalence, and the
modern racism scale. In J.F. Dovidio & S.L. Gaertner (Eds.), Prej-
udice, discrimination, and racism. Orlando, FL: Academic Press,
pp. 91–125.
71. Dovidio, J.F., & Gaertner, S.L. 2000. Aversive racism and selection
decisions: 1989 and 1999. Psychological Science, 11: 319–323.
72. For example research, see: Cleveland, J.N., Vescio, T.K., &
Barnes-Farrell, J.L. 2005. Gender discrimination in organiza-
tions. In R.L. Dipboye, & A. Colella (Eds.), Discrimination at
work: The psychological and organizational bases. Mahwah, NJ:
Lawrence Erlbaum; Colella, A., & Varma, A. 2001. The impact
of subordinate disability on leader-member exchange dynamics.
Academy of Management Journal, 44: 304–315; Dovidio, J.F.,
Gaertner, S.L., Anastasio, P.A., & Sanitaso, R. 1992. Cognitive
and motivational bases of bias: The implications of aversive rac-
ism for attitudes towards Hispanics. In S. Knouse, P. Rosenfeld,
& A. Culbertson (Eds.). Hispanics in the workplace. Newbury
Park, CA: Sage, pp. 75–106; Hebl, M.R., Bigazzi Foster, J., &
Dovidio, J.F. 2002. Formal and interpersonal discrimination: A
fi eld study of bias toward homosexual applicants. Personality and
Social Psychology Bulletin, 28: 815–825.
73. Dipboye, R.L. & Colella, A. 2005. The dilemmas ofworkplace dis-
crimination. In R.L. Dipboye & A. Colella (Eds.), Discrimination
at work: The psychological and organizational bases. Mahwah, NJ:
Lawrence Erlbaum. pp. 425–462.
74. Cox, Cultural diversity in organizations.
75. Crocker, J., Fiske, S.T., & Taylor, S.E. 1984. Schematic bases of
belief change. In J.R. Eiser (Ed.), Attitudinal judgment. New York:
Springer-Verlag, pp. 197–226; Weber, R., & Crocker, J. 1983.
Cognitive processes in the revision of stereotypic beliefs. Journal
of Personality and Social Psychology, 45: 961–977.
76. von Heppel, W., Sekaquaptewa, D., & Vargas, P. 1995. On the
role of encoding processes in stereotype maintenance. In M.P.
Zanna (Ed.), Advances in experimental social psychology, Vol. 27.
San Diego, CA: Academic Press, pp. 177–254.
77. Fiske, S.T. 1998. Stereotyping, prejudice, and discrimination.
In D.T. Gilbert, S.T. Fiske, & G. Lindzey (Eds.), The handbook
of social psychology, Vol. 2 (4th ed.). New York: McGraw-Hill,
pp. 357–411.
78. Cox, Cultural diversity in organizations.
79. Helft, M. 2007. Xerox’s strategy pays off with a new search ven-
ture. The New York Times, February 9, C.3; Maney, K. 2006.
Mulcahy traces steps of Xerox’s comeback. USA Today, September
21, 4B.
80. Ireland, R.D., Hoskisson, R.E., & Hitt, M.A. 2006. Understand-
ing business strategy. Mason, OH: South-western Publishing;
Stone, B. 2007. eBay beats the estimates for 4th-quarter earnings.
New York Times, January 25, C.3; Vara, V. 2007. eBay’s strong
earnings, outlook help to quiet critics, for now. Wall Street Jour-
nal, January 25, A.3.
81. Brewer, M.B., & Miller, N. 1984. Beyond the contact hypoth-
esis: Theoretical perspectives on desegregation. In N. Miller &
M.B. Brewer (Eds.), Groups in contact. San Diego, CA: Academic
Press, pp. 281–302; Tajfel, H. 1978. Differentiation between so-
cial groups: Studies in the social psychology of intergroup relations.
San Diego, CA: Academic Press; Ashforth, B., & Mael, F. 1989.
Social identity theory and the organization. Academy of Manage-
mentReview, 14: 20–39.
82. Abrams, D., & Hogg, M.A. 1990. An introduction to thesocial
identity approach. In D. Abrams & M.A. Hogg (Eds.), Social
identity theory: Constructive and critical advances. New York:
Springer-Verlag, pp. 1–9.
83. Cox, Cultural diversity in organizations.
84. McGuire, W.J., McGuire, C.V., Child, P., & Fujioka, T. 1978.
Salience of ethnicity in the spontaneous self-concept as a function
of one’s ethnic distinctiveness in the social environment. Journal
of Personality and Social Psychology, 36: 511–520.
85. Cox, Cultural diversity in organizations.
86. Ely, R.J. 1994. The effects of organizational demographics and
social identity on relationships among professional women.
Administrative Science Quarterly, 39: 203–239.
87. Cited in Slay, H.S. 2003. Spanning two worlds: Social identity
and emergent African American leaders. Journal of Leadership and
Organizational Studies, 9: 56–66.
88. Cox, Cultural diversity in organizations.
89. Abrams & Hogg, An introduction to the social identity approach.
90. Turner, J.C. 1975. Social comparison and social identity: Some
prospects for intergroup behavior. European Journal of Social
Psychology, 5: 5–34.
c02.indd 81c02.indd 81 12/08/10 10:44 AM12/08/10 10:44 AM
http://www.fortune.com/fortune/subs/article/0,15114,582783.00.html
http://www.fortune.com/fortune/subs/article/0,15114,582783.00.html
82 Chapter 2 Organizational Diversity
91. Hogg, M.A., & Terry, D.J. 2000. Social identity and self-
categorization processes in organizational contexts. Academy of
Management Review, 25: 121–140.
92. Ibid.
93. French, J.R.P., & Raven, B. 1959. The bases of social power.
In D. Cartwright (Ed.), Social power. Ann Arbor: University of
Michigan, Institute for Social Research, pp. 150–167; Pfeffer, J.,
& Salancik, G.R. 1978. The external control of organizations: A
resource dependence view. New York: Harper and Row.
94. Sidananius, J., & Pratto, F. 1999. Social dominance. Cambridge,
UK: Cambridge University Press.
95. Ibid.
96. Kalkhoff, W., & Barnum, C. 2000. The effects of status-
organizing and social identity processes on patterns of social infl u-
ence. Social Psychology Quarterly, 63: 95–115.
97. Konard, A.M. 2003. Special issue introduction: Defi ning the
domain of workplace diversity scholarship. Group and Organiza-
tional Management, 28: 4–18.
98. For additional details, see Deogun, N. Coke was told in ’95 of
need for diversity. Wall Street Journal, May 20, A.3; McKay, B.
2000. Coke settles bias suit for $192.5 million. Wall Street Jour-
nal, November 17, A.3.
99. U.S. Equal Employment Opportunity Commission. 2005. Oc-
cupational employment in private industry by race/ethnic group/
sex, and by industry. At http://archive.eeoc.gov/stats/jobpat/2005/
national.html.
100. Kanter, Men and women of the corporation.
101. Winters, M.F. 2003. Globalization presents both opportuni-
ties and challenges for diversity. At http://search.shrm.org/
search?q=cache:8b6YiQjDjFoJ:www.shrm.org/diversity/
library_published/nonIC/CMS_012382.asp���globalization1
challenges1diversity&access=p&output=xml_no_dtd&ie=UTF-
8&lr=&client=shrm_frontend&num=10&site=&proxystyleshee
t=shrm_frontend&oe=ISO-8859-1.
102. U.S. Department of Commerce and Vice President Al Gore’s
National Partnership for Reinventing Government Benchmark-
ing Study. 1998. Best practices in achieving workplace diversity.
Washington, DC: U.S. Department of Commerce.
103. Starbucks. 2007. Starbucks mission statement. At http://www.
starbucks.com/aboutus/environment.asp.
104. Ford Motor Company. 2007. Valuing diversity. At http://www.
mycareer.ford.com/ONTHETEAM.ASP?CID=15.
105. Jayne, M.E.A., & Dipboye, R.L. 2004. Leveraging diversity to
improve business performance: Research fi ndings and recom-
mendations for organizations. Human Resource Management, 43:
409–424.
106. Cox, T.H. 2001. Creating the multicultural organization: A strategy
for capturing the power of diversity. San Francisco: Jossey-Bass.
c02.indd 82c02.indd 82 12/08/10 10:44 AM12/08/10 10:44 AM
http://archive.eeoc.gov/stats/jobpat/2005/national.html
http://archive.eeoc.gov/stats/jobpat/2005/national.html
http://search.shrm.org/search?q=cache:8b6YiQjDjFoJ:www.shrm.org/diversity/library_published/nonIC/CMS_012382.asp.globalization1challenges1diversity&access=p&output=xml_no_dtd&ie=UTF-8&lr=&client=shrm_frontend&num=10&site=&proxystylesheet=shrm_frontend&oe=ISO-8859-1
http://www.starbucks.com/aboutus/environment.asp
http://www.starbucks.com/aboutus/environment.asp
http://www.mycareer.ford.com/ONTHETEAM.ASP?CID=15
http://www.mycareer.ford.com/ONTHETEAM.ASP?CID=15
http://search.shrm.org/search?q=cache:8b6YiQjDjFoJ:www.shrm.org/diversity/library_published/nonIC/CMS_012382.asp.globalization1challenges1diversity&access=p&output=xml_no_dtd&ie=UTF-8&lr=&client=shrm_frontend&num=10&site=&proxystylesheet=shrm_frontend&oe=ISO-8859-1
http://search.shrm.org/search?q=cache:8b6YiQjDjFoJ:www.shrm.org/diversity/library_published/nonIC/CMS_012382.asp.globalization1challenges1diversity&access=p&output=xml_no_dtd&ie=UTF-8&lr=&client=shrm_frontend&num=10&site=&proxystylesheet=shrm_frontend&oe=ISO-8859-1
http://search.shrm.org/search?q=cache:8b6YiQjDjFoJ:www.shrm.org/diversity/library_published/nonIC/CMS_012382.asp.globalization1challenges1diversity&access=p&output=xml_no_dtd&ie=UTF-8&lr=&client=shrm_frontend&num=10&site=&proxystylesheet=shrm_frontend&oe=ISO-8859-1
http://search.shrm.org/search?q=cache:8b6YiQjDjFoJ:www.shrm.org/diversity/library_published/nonIC/CMS_012382.asp.globalization1challenges1diversity&access=p&output=xml_no_dtd&ie=UTF-8&lr=&client=shrm_frontend&num=10&site=&proxystylesheet=shrm_frontend&oe=ISO-8859-1
http://search.shrm.org/search?q=cache:8b6YiQjDjFoJ:www.shrm.org/diversity/library_published/nonIC/CMS_012382.asp.globalization1challenges1diversity&access=p&output=xml_no_dtd&ie=UTF-8&lr=&client=shrm_frontend&num=10&site=&proxystylesheet=shrm_frontend&oe=ISO-8859-1
?knowledge objectives
After reading this chapter, you should be able to:
1. Defi ne globalization and discuss the forces that
infl uence this phenomenon.
2. Discuss three types of international involvement by
associates and managers and describe problems
that can arise with each.
3. Explain how international involvement by associ-
ates and managers varies across fi rms.
4. Describe high-involvement management in the
international arena, emphasizing the adaptation
of this management approach to different cultures.
5. Identify and explain the key ethical issues in inter-
national business.
3
organizational
behavior in a global
context
exploring behavior in action
McDonald’s Thinks Globally and Acts Locally
I
n 1948, brothers Richard and Maurice McDonald opened the fi rst McDonald’s restaurant in San Bernardino,California.
Over the next decade, hundreds of McDonald’s restaurants were built alongside the new interstate highway systems in
the United States. McDonald’s was one of the fi rst restaurants to make fast food available to the newly mobile American
population. In 1967, McDonald’s decided to go international and opened its fi rst restaurant outside the United States in
Richmond, British Columbia. Today there are over 32,000 McDonald’s restaurants in 122 countries. And, its international
operations have become highly important to McDonald’s fi nancial performance. For example, its restaurants in Europe now
produce more revenues than its restaurants in the United States, despite the fact thatMcDonald’s has more units in the
United States. McDonald’s success in international operations is partially because it has adapted to the cultural differences in
the various foreign locations of its restaurants.
Trying to maintain a global brand is diffi cultbecause
of the different cultural expectations experienced across
different countries. It is important to ensure a positive
reputation for the company and also maintain thequality
of its products. So, McDonald’s had to build and sustain
a reputation for quality products and effi cient service
globally while simultaneously meeting consumer expec-
tations across different cultures. McDonald’s developed
a competitive advantage because the company has taken
steps to know, understand, and service customers’ needs
without compromising its core strengths (fast, easy, clean
meals for families to enjoy). An example ofMcDonald’s
adaptation to cultural differences is exhibited in how
McDonald’s dispenses its food products in order to
respect and serve its Israeli customers. All meat served in
McDonald’s restaurants located in Israel is 100 percent
kosher. McDonald’s operates both kosher and nonkosher
restaurants in Israel. The kosher restaurants are closed on
Saturday and on religious holidays, while the nonkosher
restaurants remain open for those customers who do not
c03.indd 83c03.indd 83 12/08/10 10:45 AM12/08/10 10:45 AM
84
Sources: “Welcome to McDonald’s Israel”, McDonald’s, Nov. 22, 2009, www.mcdonalds.com; E. Ganley. 2009. “McDonald’s to
Become Mona Lisa’s New Neighbor,” BusinessWeek, Oct. 5, www.businessweek.com; S.E.D. Aloui & Y. Genena. 2009. “McDonald’s
Egypt continues the ’Open Door’ program,” AMEinfo, June 28, at http://www.ameinfo.com; N. El Ajou. 2008. “McDonald’s UAE
Concludes its 7th World Children’s Day Campaign,” AMEinfo, Dec. 24, 2008; K. Capell. 2008. “A Golden Recipe for McDonald’s
Europe,” BusinessWeek, July 17; “McDonalds’s and Conservation International Team Up to Protect China’s Panda Habitats”, Mc-
Donalds, June 10, 2008, at http://www.crmcdonalds.com; Nini Bhan and Brad Nemer. 2006. “Brand Magic in India,” BusinessWeek,
May 8, at http://www.businessweek.com; Beth Carney. 2005. “In Europe, the Fat Is in the Fire,” BusinessWeek, Feb. 8, at http://www.
businessweek.com; Conrad P. Kottak. 2003. McDonald’s in Brazil: Culturally Appropriate Marketing, Ethnographic Solutions, at http://
www.ethnographic-solutions.com.
strictly adhere to kosher law. In the kosher restaurant, the
menu includes no dairy products and food is prepared in
accordance with kosher law. In addition, McDonald’s sup-
ports the local communities by obtaining many of its food
products (e.g., beef, potatoes, lettuce, etc.) from local sup-
pliers. In Israel, it obtains 80 percent of its food supplies
within the country.
To display the effi ciency
and cleanliness of its restau-
rants in Egypt, McDonald’s
operates an open-door pol-
icy, in which customers are
invited to visit their kitch-
ens to view the preparation
of the food. In this way,
consumers can view how
McDonald’s restaurants pre-
pare their food effi ciently,
maintaining quality and in
ways that meet high health
and safety standards. For
example, employees must
wash their hands with disin-
fectant soap every 30 minutes and continuously wash and
disinfect utensils. The tours provided to customers fulfi ll
a process of transparency and have elicited highly positive
customer responses and expressions of appreciation.
Other examples of how McDonald’s adapts to local
culture and ways of life include vegetarian meals in India,
with local creations such as the McPuff and the McVeg-
gie. Today, 70 percent of the menu in India has been al-
tered to meet the customers’ needs and desires. In Europe,
McDonald’s introduced a menu featuring salads, fruit,
and the option of substituting carrots in Happy Meals
for French fries, a menu modifi cation made to appeal
to health-conscious consumers. These same menu items
have been offered in the United States as well. So, while
the menu may be different in some ways, the McDon-
ald’s experience around the world is consistent by offering
quality, great service, cleanliness, and value. It is equally
important to develop a culturally appropriate strategy
for a new international location. Innovation is successful
when it is culturally appropriate. In Brazil, McDonald’s
promotes an afternoon meal rather than a lunch meal.
This change was made because Brazilians prefer their
main meal at midday, often eating at a leisurely pace with
business associates.
There are many abroad
who are concerned about
having companies like
McDonald’s expand their
restaurants globally, such
as the concerns expressed
about a McDonald’s res-
taurant opening in the food
court adjoining France’s
famous Louvre museum.
Countering some of these
concerns is McDonald’s
commitment to impor-
tant local social concerns.
For example, McDonald’s
supports Conservation In-
ternational’s efforts to protect wild pandas, a threatened
species. Taking this further, McDonald’s announced a
local treasures program in China to encourage children to
learn about their country’s special environment and rare
animals. Another example is McDonald’s major dona-
tion to the Dubai Autism Center as a part of McDonald’s
World Children’s Day campaign.
McDonald’s is regularly adapting its restaurants and
marketing tactics to refl ect cultural, architectural, and re-
gional differences within each country. Even in the United
States, McDonald’s adapts to local communities. In
Maine, McDonald’s offers lobster rolls. And in Michigan,
customers can purchase Halal McNuggets, chicken that
is processed under strict religious supervision in order to
cater to the 150,000 Muslims who live in the Detroit area.
Thus, McDonald’s is a prime example of a company that
thinks globally and acts locally.
©ZAHID HUSSEIN/Reuters/Landov LLC
c03.indd 84c03.indd 84 12/08/10 10:45 AM12/08/10 10:45 AM
www.mcdonalds.com
www.businessweek.com
http://www.ameinfo.com
http://www.crmcdonalds.com
http://www.businessweek.com
http://www.businessweek.com
http://www.businessweek.com
http://www.ethnographic-solutions.com
http://www.ethnographic-solutions.com
The Exploring Behavior in Action discus-
sion of McDonald’s shows how one fi rm
operates on the world stage and em-
phasizes the importance of cross-cultural
knowledge and skills. Because of sub-
stantial competition and differing cultural
expectations across the many countries
in which McDonald’s has restaurants, the
company has strong needs for fl exibility
and for effi ciency in resource use. Mc-
Donald’s has developed a global reputa-
tion for providing clean restaurants and
fast and easy meals for value-conscious
families. From strategic locations, the fi rm
develops, produces, sells, and supports
its products for the world marketplace. To
be successful, however, this fi rm must be
especially attentive to local cultural values
and desired foods. McDonald’s always
provides some consistent products on its
menu regardless of location (e.g., the
Big Mac) but it also provides menu items
adapted to the local cultural tastes (such
as vegetable meals in India and kosher
foods in Israel). Obviously, McDonald’s
has trained its managers to be sensitive
to local culture and yet to take advantage
of global effi ciencies. Actions such as
those used by McDonald’s to take advan-
tage of the different international markets
opened due to glob alization have led to
higher overall fi rm performance.1
To create cost advantages, to pur-
sue growth, or to spread risk across dif-
ferent markets, many fi rms have adopted
strategies that call for investment in
foreign countries. Such involvement can
take many forms, including the creation
of company-owned manufacturing or
back-offi ce facilities, company-owned
marketing and sales units, and/or alli-
ances with companies based in a par-
ticular foreign country. In all cases, ef-
fectively handling cross-country cultural
differences is crucial. Executing competi-
tive strategies would be impossible with-
out an understanding of how these dif-
ferences affect day-to-day relationships
among associates and managers, as
well as relationships with external par-
ties (such as suppliers and customers).2
One of the most famous examples
of a corporate failure that emphasizes the
importance of cultural differences is Walt
Disney Company’s attempt to execute a
strategy involving effi cient operations and
exceptional customer service in its theme
park located close to Paris.3 American
leaders of the Euro Disney project failed
to understand some European workplace
norms that produced a less friendly ap-
proach to guests in the park. Disney lead-
ers also failed to anticipate the uproar
over grooming and dress requirements for
associates, including “appropriate under-
garments,” and they did not recognize the
potential for confl ict between individuals
of different nationalities. One of the 1,000
associates and lower-level managers who
departed in the fi rst nine weeks of Euro
Disney’s operation commented, “I don’t
think [non-European supervisors] realized
what Europeans were like.” Concerning
the park, a critic expressed the feelings
of the French elite: “A horror made of
cardboard, plastic, and appalling colors;
a construction of hardened chewing gum
and idiotic folklore taken straight out of
comic books written for obese Ameri-
cans.”4 Failure to fully appreciate and
respond to cultural differences contributed
to a disastrous early period for Euro Dis-
ney. Its performance suffered, but having
learned several hard lessons, the com-
pany improved its practices in the park
and increased its performance as well.
Because of the importance of
glob alization and the related diversity
and ethical issues it poses, we present
examples and applications involving
fi rms operating in multiple countries
throughout the book. In this chapter,
we discuss these issues in depth. We
open the chapter with a discussion of
globalization, addressing the opportu-
nities and challenges that globalization
presents for nations and fi rms. Next,
we discuss the ways in which associ-
ates and managers can deal with in-
ternational problems and the pitfalls to
avoid in their activities. A discussion of
high-involvement management follows,
with a focus on how this management
approach can be tailored to different
countries and regions of the world.
Finally, we describe ethical issues fre-
quently confronted by fi rms with sub-
stantial international involvement.
the strategic importance ofOrganizational Behavior in a Global Context
Forces of Globalization
In a global economy, products, services, people, technologies, and fi nancial capital move
relatively freely across national borders.5 Tariffs, currency laws, travel restrictions, immi-
gration restrictions, and other barriers to these international fl ows become less diffi cult
Forces of Globalization 85
c03.indd 85c03.indd 85 12/08/10 10:45 AM12/08/10 10:45 AM
86 Chapter 3 Organizational Behavior in a Global Context
to manage. Essentially, a global economy provides fi rms with a unifi ed world market in
which to sell products and services, as well as a unifi ed world market for acquiring the
resources needed to create those products and services.
Globalization, the trend toward a more global economy, has increased substantially
since 1980. Direct foreign investment by fi rms based in developed countries has increased.
While several developed countries suffered a recession early in the twenty-fi rst century, there
were healthy increases in direct foreign investments made by them through 2007. In fact,
such investments reached an all-time high in 2007. In this year, the total stock of direct
foreign investments achieved $15 trillion in value.6 However, the global economic recession
led to a reduction in the total amount of direct foreign investments in 2008 and 2009. Yet,
with the recovery, projections call for increases in direct foreign investment in 2010 and
several years beyond.7 These investments represent increased interest in producing goods
and services in foreign countries. Exporting goods and services into other countries increased
over the same time period. Exports have grown at a high rate in recent years except during
the major global recession.8 Interestingly, in recent years, signifi cant amounts of foreign
investment has been focused on emerging-economy countries such as China and India. Fur-
thermore, these emerging economies have been making major foreign investments in other
countries. Their growing economic power is evident in the projections that within the next
few decades China and India are expected to have the largest and third largest economies,
respectively, in the world.9 The results of globalization are evident in the fact that major
multinational fi rms obtain almost 55 percent of their sales from outside their home country
and almost 50 percent of their assets and associates reside outside of their home country.10
Clearly, goods and services fl owed across borders in record amounts at the end of the twenti-
eth century and early in the twenty-fi rst century, with fi rms such as Toyota leading the way.
Many national leaders promote globalization as a means for economic growth inside
their countries as well as in the world as a whole. Most economists agree that a highly global
economy would be benefi cial for most countries. Goods, services, and the resources needed to
produce them freely fl owing across borders likely reduce the costs of doing business, resulting
in economic stimulation.11 It has been estimated that genuine free trade (i.e., trade with no
tariffs) in manufactured goods among the United States, Europe, and Japan would result in
a 5 to 10 percent annual increase in the economic output of these three areas. Genuine free
trade in services would increase economic output by an additional 15 to 20 percent.12
Despite the potential economic benefi ts, offi cials in a number of nations have expressed
concerns about globalization’s long-term effects on societal culture.13 Culture involves
shared values and taken-for-granted assumptions about how to act and think.14 Many fear
that unique cultures around the world will disappear over time if the world becomes one
unifi ed market for goods and services. They argue that cultural distinctiveness—indeed
what makes a country special—will disappear as similar products and services are sold
worldwide.15 Individuals with these concerns took notice when a Taiwanese Little League
baseball team playing in the United States was comforted by a McDonald’s restaurant be-
cause it reminded them of home.16 In developing nations, there are also concerns over labor
exploitation and natural resource depletion. In wealthy nations, there are concerns over the
export of jobs to low-wage countries and the possibility that wealthy nations ultimately will
need to lower their wage structures in order to compete in a truly global economy.17
From the perspective of an individual company, there are many reasons to consider
substantial international involvement (see Exhibit 3-1). First, a fi rm may want to expand
sales efforts across borders in order to sustain growth. Opportunities for growth may have
globalization
The trend toward a
unifi ed global economy
where national borders
mean relatively little.
culture
Shared values and taken-
for-granted assumptions that
govern acceptable behavior
and thought patterns in a
country and give a country
much of its uniqueness.
c03.indd 86c03.indd 86 12/08/10 10:45 AM12/08/10 10:45 AM
Forces of Globalization 87
been exhausted in the home country (e.g., if the market is saturated), but owners, business
analysts, and the media often demand continuing sales and profi t growth.18 Second, a fi rm
may be able to reduce its business risk by selling its products and services in a number
of different countries. By diversifying its sales across a number of regions of the world, a
company may be able to offset bad economic times when they occur in one part of the
world with good economic times in other parts of the world. Third, a fi rm may enjoy
greater economies of scale by expanding its markets internationally. This applies most
often to manufacturing fi rms. Hyundai, for example, could not develop operations with
effi cient scale by serving only the domestic South Korean automobile market.19 To achieve
a reasonable cost structure, the fi rm needed to build and sell more automobiles than the
South Korean market could handle. The larger volume of automobiles manufactured and
sold allows them to obtain quantity discounts on raw materials purchased and to spread
their fi xed costs across more autos, thereby reducing their cost per unit (increasing their
profi t margins). Fourth, when locating units internationally, a fi rm may enjoy location
advantages such as low labor costs, specialized expertise, or other valuable resources.20
Clearly, globalization and the value to be gained from participating in international
markets is changing the competitive landscape for many fi rms, regardless of their home
base.21Even many smaller and younger fi rms are now participating in international mar-
kets. The openness of markets and advancing technology (and lower costs of this tech-
nology) provide opportunities for young and small fi rms as well as for older, larger, and
established fi rms.22 These opportunities in international markets have been prompted by
changes in many countries’ institutional environments. For example, several emerging-
economy countries have reduced regulations to allow more foreign fi rms to enter their
markets (e.g., China and India). In this way, their economies have grown larger and their
fi rms have learned new capabilities, allowing them to compete more effectively in their
home markets and abroad. Thus, the countries’ institutional environments affect home
and foreign country fi rms’ strategies.23 Institutional environments contribute to the op-
portunities and challenges depicted in Exhibit 3-1.
Political
Risks
Growth
Diversification
of Risk
Economies of
Scale
Location
Advantages
Opportunities
Managerial
Risks
Economic
Risks
Challenges
Exhibit 3-1 Opportunities and Challenges for Firms with International
Involvement
c03.indd 87c03.indd 87 12/08/10 10:45 AM12/08/10 10:45 AM
88 Chapter 3 Organizational Behavior in a Global Context
Globalization has greatly increased the interactions among countries and cul-
tures. The vast improvements in com-
munication technologies (and trans-
portation as well) have affected much
of what we do across the world. The
world’s fi nancial markets have be-
come tightly integrated, as shown by
the world recession in 2008–2009.
The political actions of opening coun-
try markets and the entry into those
markets by multinational corporations
(MNCs) have jointly increased the
amount and speed of globalization.
MNCs sell more than $11 trillion in
goods globally on an annual basis.
And, although MNCs have been
blamed for a number of ills (e.g., vio-
lation of workers’ rights, harm to the
natural environment, etc.), they have
also enriched the fortunes of people in
less-developed countries. MNCs have
played a major role in the economic
development in important regions of
the world such as China, India, and
even Latin America.
However, MNCs now face a
number of challenges, including signif-
icant competition from major compa-
nies in emerging markets such as Tata,
Cemex, and Lenova, among others.
These companies are not only compet-
ing effectively in their home markets,
but they are also developing capabili-
ties (ability to successfully enter new
foreign markets, building global re-
source bases) to become major forces
in global markets. Thus, MNCs must
not only develop major global capa-
bilities but also must learn the local
markets well and acquire knowledge
from these countries/markets that can
be diffused throughout the company
to enhance their ability to compete
inglobal markets. This is sometimes
called glocalization.
The CEO of GE’s business unit
in India suggests that serving custom-
ers in 10 countries having signifi cant
cultural diversity in the managerial
and professional associate ranks is a
tremendous asset. He argues that the
knowledge held by this group, espe-
cially the local insight, allows the
company to be well positioned to
exploit opportunities as they arise
in local markets. In addition, using
the insight afforded by the cultural
diversity allows the management team
to “see around the corner” regarding
expectations for the future and thereby
to stay ahead of the competition.
Procter & Gamble (P&G) has also
learned to gain greater value from its
international operations. Specifi cally,
they design units and programs to help
them acquire new knowledge avail-
able in certain countries and regions.
They then use this knowledge to enrich
their products, services, and processes
in other regions of the world. In this
way, they stay ahead of their global
and local competitors. For example, in
China, they have encouraged reluctant
research and development (R&D) re-
searchers to speak up and share their
ideas with others. In so doing, they
have enhanced their R&D output there
and also added unique knowledge to
their global R&D efforts.
These efforts are especially im-
portant because it is predicted that the
Asian region, led by a strong China,
will be the most infl uential geographic
region for the global economy by
2020. And this means that Asian
MNCs are also likely to be even more
highly infl uential by this time. Thus,
Western MNCs will experience in-
creasing competitive challenges from
this region of the world. They can only
remain competitive by taking actions
such as those noted by GE and P&G.
Multinational Corporations Achieving
Glocalization
MANAGERIAL ADVICE
©
C
ou
rt
es
y
of
P
ro
ct
or
&
G
am
bl
e
Sources: “Earning staff’s respect was pivotal for GE capital man,” Wall Street Journal, Nov. 16, 2009, at http://www.
wsj.com; V. Govindarajan. 2009. “The case for ’reverse innovation’ now,” BusinessWeek, Oct. 26, at http://www.
businessweek.com; R.O. Crockett. 2009. “P&G gets reticent researchers to speak up,” BusinessWeek, Oct. 2, at http://
www.businessweek.com; “Asian multinational corporations poised for global success and Asian region may be world’s
most infl uential economy by 2020,” Fleishman-Hillard Point of View, Sept. 10, 2009, at http://pov.fl eishman.com;
D. Patel. 2009. “Multinational corporations in an increasingly globalized world,” Prospect, Feb. 3, at http://www.
prospectjournal.ucsd.edu.
c03.indd 88c03.indd 88 12/08/10 10:45 AM12/08/10 10:45 AM
http://www.wsj.com
http://www.wsj.com
http://www.businessweek.com
http://www.businessweek.com
http://www.businessweek.com
http://www.businessweek.com
http://www.prospectjournal.ucsd.edu
http://www.prospectjournal.ucsd.edu
http://pov.fleishman.com
The Globalization Experience for Associates and Managers 89
These powerful forces encourage many fi rms to expand into international markets,
but there are substantial risks. These risks can be classifi ed as political, economic, and
managerial.24
• Political risks relate to instability in national governments, the threat of civil or
international war, and the threat of state-sponsored terrorism. These risks create
uncertainty, and they can result in the destruction of assets and disruption of
resource fl ows.25 One of the most diffi cult situations occurs when a government
nationalizes an industry, meaning that it takes over the assets of private
companies, often with little or no compensation provided to the fi rms.
• Economic risks relate to fl uctuations in the value of foreign currencies and the
possibility of sudden economic contraction in some countries.26 When a foreign
country’s currency declines in value relative to the home country’s currency, assets
and earnings in that foreign country are worth less, and exporting to that country
becomes more diffi cult, as exported goods cost more there.
• Managerial risks relate to the diffi culties inherent in managing the complex
resource fl ows required by most international fi rms.27 Tariffs, logistics, and
language issues can become a signifi cant challenge as a fi rm does business in
an increasing number of countries. Radically new marketing programs and
distribution networks may be needed as fi rms enter new countries. Some
executives and managers are better at managing these complexities than are others.
The Managerial Advice segment explains how managers develop their fi rm’s capabili-
ties to compete effectively in global markets. They must develop a global mindset but also
understand local market requirements. The most effective fi rms such as GE and P&G
enter markets with the intent to learn. Firms can gain valuable ideas in foreign markets
that they can then use in business units competing in other regions of the world.28 Mul-
tinational fi rms based in Western (developed) countries have a number of advantages.
However, companies from Asia, particularly China and India, are building their resources
and capabilities. They will be formidable competitors in the coming decade.
The Globalization Experience for
Associates and Managers
For individual associates and managers, international exposure or experience can occur in
several ways, which we discuss below. In each case, opportunities for personal learning,
growth, and advancement are substantial. Several pitfalls, however, must be avoided.
Internationally Focused Jobs
An individual may work directly on international issues as part of her day-to-day job.
Although dealing with fi nance issues, accounting concerns, information technology tasks,
and so on can be challenging in a purely domestic context, adding an international dimen-
sion usually creates situations with signifi cant complexity. Individuals who thrive on chal-
lenge are well suited to these environments. At Dow Chemical, for example, international
fi nance activities are often demanding because of the fi rm’s exposure to fl uctuations in the
value of many different countries’ currencies. With manufacturing facilities in dozens of
countries and sales in well over 100 countries, Dow faces substantial currency risk.
c03.indd 89c03.indd 89 12/08/10 10:45 AM12/08/10 10:45 AM
90 Chapter 3 Organizational Behavior in a Global Context
Associates and managers who hold internationally focused jobs are often members of
geographically dispersed teams. Many of these teams complete work related to new market-
ing programs, new-product-development projects, and other nonroutine initiatives. Other
teams focus on routine issues, such as product fl ow from central manufacturing facilities. In
many cases, associates and managers working on geographically dispersed teams have differ-
ent working and decision styles because of cultural differences. Some prefer starting meet-
ings with social rather than business topics, others prefer an autocratic rather than an egali-
tarian team leader, and still others prefer indirect to direct confrontations. To facilitate their
work, team members use a complex set of tools to communicate, including electronic mail,
Internet chat rooms, company intranets, teleconferencing, videoconferencing, and perhaps
occasional face-to-face meetings.29 Individuals complete team-related tasks around the clock
as they live and work in different time zones, creating additional coordination challenges.
Because international teams largely rely on electronically mediated communication
to coordinate and accomplish their work, they are often referred to as virtual electronic
teams.30 Although virtual teams are effi cient, a virtual world with little face-to-face com-
munication combined with substantial cross-cultural differences sets the stage for misper-
ceptions and misunderstandings. Small disagreements can escalate quickly, and trust can
be strained. One study showed that virtual teams with substantial cross-cultural differ-
ences often exhibit lower trust than virtual teams with more cross-cultural similarities.31
Low trust, suggesting little confi dence that others will maintain their promises, be honest,
and not engage in negative politics, is harmful to the team’s efforts.32 Researchers have
discovered several potential negative outcomes for virtual teams with low trust, including
unwillingness to cooperate, poor confl ict resolution, few or no goals established, poor
risk mitigation, and lack of adjustment to the virtual format for work.33 Although trust
is important for any group, it is particularly important for virtual teams because of the
propensity for misunderstanding as well as the absence of traditional direct supervision.34
The initial communications of a virtual cross-cultural team may be particularly im-
portant in the development of trust. When early communication is task-focused, posi-
tive, and reciprocated (i.e., questions and inputs do not go unanswered), a phenomenon
known as swift trust can occur.35 Swift trust occurs when individuals who have little or no
history of working together, but who have a clear task to accomplish, quickly develop trust
in one another based on interpersonal communication. Although social communication
(i.e., friendly, non-task-related) can help to maintain this trust, task-related exchanges that
facilitate the team’s progress are critical.36
In the face of possible trust issues, it is important for managers to help team members
identify with the team. According to identity theory, when an individual identifi es with
a team, he feels connected to it, and he takes very seriously his role as a team member.
Failure to identify with the team often results in withholding of effort on team projects,
a common problem.37 Steps can be taken to increase the chances that an individual will
identify with the international team. First, it is important to provide training in interna-
tional negotiating and confl ict resolution.38 Techniques that are sensitive to cultural differ-
ences and focused on collaborative outcomes work best. Exhibit 3-2 provides specifi c ideas
on how managers can be sensitive to cultural differences. Second, it is important to have
team members jointly develop a unifi ed vision.39 The shared experience of discussing the
future of the team, its goals and aspirations, can draw people together. Finally, it is helpful
for team members to spend some time in face-to-face meetings, especially early in a team’s
life.40 Face-to-face meetings increase the chances that team members will identify personal
virtual electronic teams
Teams that rely heavily on
electronically mediated
communication rather than
face-to-face meetings as the
means to coordinate work.
swift trust
A phenomenon where trust
develops rapidly based on
positive, reciprocated task-
related communications.
c03.indd 90c03.indd 90 12/08/10 10:45 AM12/08/10 10:45 AM
The Globalization Experience for Associates and Managers 91
similarities, and these similarities contribute to understanding and cooperation.41 Absent
face-to-face interactions, videoconferencing provides richer communication than Internet
chat rooms and teleconferencing because of the value of seeing each other. In one study,
members of international teams reported that it was even helpful to have photographs of
teammates posted in the workplace.42
Although research on the role of personal characteristics is not conclusive, several
characteristics appear to play important roles in the success of cross-cultural virtual
teams.43 Individuals who value diversity, fl exibility, and autonomy may offer more posi-
tive contributions to both the task and social aspects of the team. A general disposition
to trust, a signifi cant degree of trustworthiness, relational skills (involving the ability to
work with others who possess different knowledge), and skills for communicating through
electronic means are also important to success in virtual teams.
Foreign Job Assignments
Individuals may accept foreign job assignments that entail dealing directly with the com-
plexities of operating in a foreign culture. These people are referred to as expatriates, or
“expats” for short.44 Foreign experience can be exciting because of the new and different
work situations that are encountered. The opportunity outside of work to learn about and
expatriate
An individual who leaves his
or her home country to live
and work in a foreign land.
EXHIBIT 3-2 Learning about a Counterpart’s Culture
•Don’t attempt to identify another’s culture too quickly. Common cues (name, physical
appearance, language, accent, and location) may be unreliable. In a global economy
and multicultural societies, some people are shaped by more than one culture.
•Beware of the Western bias toward taking actions. In some cultures, thinking and
talking affect relationships more than actions do.
•Try to avoid the tendency to formulate simple perceptions of others’ cultural values.
Most cultures are highly complex, involving many dimensions.
•Don’t assume that your values are the best for the organization. For example,
U.S. culture is individualistic, and this is often assumed to be productive. While
individual competition and pride can be positive to some degree, cultural values
in India and China emphasize the importance of family, friends, and social
relationships, making associates in these countries highly loyal to the organizations
for which they work, and this is positive as well. Loyalty to the organization is less
common among U.S. associates.
•Recognize that norms for interactions involving outsiders may differ from those for
interactions between compatriots. Trust is especially important in some cultures and
greatly affects interactions with others.
•Be careful about making assumptions regarding cultural values and expected
behaviors based on the published dimensions of a person’s national culture. Different
ages, genders, and even geographic regions may cause differences within a country.
Source: Based on work in M. Javidan & R.J. House. 2001. Cultural acumen for the global manager.
Organizational Dynamics, 29(4): 289–305; C.J. Robertson, J.A. Al-Khatib, M. Al-Habib, & D. Lanoue. 2001.
Beliefs about work in the Middle East and the convergence versus divergence of values. Journal of World
Business, 36(3): 223–244; S.E. Weiss. 1994. Negotiating with “Romans”—Part 2. MIT Sloan Management
Review, 35 (3): 85–99.
c03.indd 91c03.indd 91 12/08/10 10:45 AM12/08/10 10:45 AM
92 Chapter 3 Organizational Behavior in a Global Context
live in a different culture can also be valuable. Many companies indicate that international
experience results in faster promotions and makes associates more attractive to other com-
panies because of the enhanced knowledge and capabilities theydevelop. In addition to
the knowledge gained by expatriates, they also provide a means of transferring knowledge
from the home company to foreign subsidiaries. In other words, expatriates carry with
them the knowledge of the industry, technology, and fi rm.45 Using expatriate managers also
canfacilitate coordination between the home offi ce and foreign subsidiaries.46
Petroleum engineers, management consultants, operations managers, sales managers,
and information technology project managers are among the common candidates for in-
ternational assignments. According to recent relocation trends, international assignments
are commonly made to fi ll skill gaps in foreign units, to launch new units, to facilitate
technology transfer to another country, and to help build management expertise in a
foreign unit.47
International assignments, however, should be treated with caution. Many things can
go wrong, resulting in poor job performance and an early return to the home country.48
Culture shock is a key factor in failure. This stress reaction can affect an individual who
faces changes in and uncertainty over what is acceptable behavior.49 Some behaviors that
are acceptable in the home country may not be acceptable in the new country, and vice
versa. For example, in many cultures, one of the hands (either the left or the right, depend-
ing on the culture) is considered dirty and should not be used in certain situations. This
can be diffi cult for an American or European to remem-
ber. In addition, simple limitations such as an inability to
acquire favorite foods, read road signs, and communicate
easily often cause stress.
Beyond the associate’s or manager’s experience of cul-
ture shock, a spouse may also experience stress. Research
suggests that spousal inability to adjust to the new setting
is a signifi cant cause of premature departure from a foreign
assignment.50 One study suggested that spousal adjustment
occurs on three dimensions: (1) effectiveness in building
relationships with individuals from the host country, (2)
effectiveness in adjusting to local culture in general, and
(3) effectiveness in developing a feeling of being at home in
the foreign country.51 This same study showed that spouses
who spoke the language of the host country adjusted much
more effectively. Spouses with very young children also
faredbetter because that spouse will likely spend a great deal of time engaged in the same
activities as before the move—child care in the home. Familiaractivities make the adjust-
ment easier. In short, the family plays an important role in theability of the associate or
manager to adjust to and be effective in foreign assignments.52
Individuals exposed to ethnocentrism in foreign assignments can also experience
stress. Ethnocentrism is the belief that one’s culture is superior to others, and it can lead
to discrimination and even hostility.53 In some cases, discrimination is subtle and even
unintentional. It nonetheless can harm an expatriate’s ability to adjust.
A number of remedies have been proposed to reduce or eliminate expatriate stress. In
most cases, these remedies include screening and training before departure, training and
social support after arrival in the country, and support for the individual returning to the
home country.
culture shock
A stress reaction involving
diffi culties coping with
the requirements of life
in a new country.
ethnocentrism
The belief that one’s culture
is better than others.
©Hans Neleman/Photonica/Getty Images, Inc.
c03.indd 92c03.indd 92 12/08/10 10:45 AM12/08/10 10:45 AM
The Globalization Experience for Associates and Managers 93
Predeparture activities set the stage for success. Such activities include favoring for
selection those individuals who have personal characteristics associated with success
in foreign assignments. Although there are no simple relationships between personal
characteristics and success in foreign posts, associates and managers who possess strong
interpersonal skills, are fl exible, and are emotionally stable often adapt effectively as expatri-
ates.54 Even so, predeparture training often plays a more important role than do personal
characteristics.
Training can take many forms; a fi rm may provide books and CDs or arrange for role
playing and language training, for example.55 An expert on training for expatriates has
offered the following advice.56
• Train the entire family, if there is one. If the spouse or children are unhappy, the
expatriate assignment is more likely to be unsuccessful.
• Conduct the predeparture orientation one to two months prior to departure. The
associate or manager and the family can forget information provided earlier than
that, and if the orientation occurs too close to departure, the individuals may be
too preoccupied to retain training information. Activities such as packing and
closing up a home must be handled and will occupy family members in the days
immediately prior to moving.
• Include in the training key cultural information. The Aperian Global consulting
fi rm provides training for associates selected for expatriate assignments. The fi rm
recommends providing side-by-side cultural comparisons of the home and host
cultures, an explanation of the challenges that will likely be faced and when,
lifestyle information related to areas such as tipping and gift-giving, and personal
job plans for the jobholder, with an emphasis on cultural issues that help the
expatriate to thrive in the new environment.57
• Concentrate on conversational language training. The ability to converse with
individuals is more important than the ability to fully understand grammar or to
write the foreign language.
• Be prepared to convince busy families of the need for training. Families with little
foreign experience may not recognize the value of predeparture training.
After arrival, additional training may be useful, especially if little training was pro-
vided before departure. Language training may continue, and initial cultural exposure
may bring new questions and issues. Host-country social support is also important, par-
ticularly in the early months. Individuals familiar with the country may assist in showing
newcomers the area, running errands, identifying appropriate schools, and establishing
local bank accounts.58
Finally, reintegration into the home country should be carefully managed following an
international assignment. And companies should be especially mindful to take advantage
of the knowledge these individuals have gained through the expatriate assignment. In fact,
if managed effectively, the learning by associates and managers can provide them with ad-
ditional capabilities and thereby increase their motivation and job performance after they
return.59 Such actions by the fi rm are even more important because research suggests that
many associates and managers returning from foreign assignments leave their companies
in the fi rst year or two.60 Old social and political networks may not be intact; information
technology may have changed; and key leaders with whom important relationships existed
may have departed. Each of these factors can infl uence the decision to leave. Career plan-
ning and sponsors inside the company can help in understanding the new landscape.
c03.indd 93c03.indd 93 12/08/10 10:45 AM12/08/10 10:45 AM
94 Chapter 3 Organizational Behavior in a Global Context
EXPERIENCING ORGANIZATIONAL BEHAVIOR
There are many women who experience barriers prevent-ing them from reaching career
aspirations. For international women,
these barriers may be even stronger.
For example, women in Asian and
Middle Eastern countries often expe-
rience these barriers because of cul-
tural values and traditions. For many
women, marriage and male chauvin-
ism are primary reasons they are un-
able to reach their career potential.
All countries should be concerned
about this problem because of the
need for more human capital, which
is especially troubling when they are
not fully utilizing the human capital
available.
With the population rapidly
aging and most able-bodied men al-
ready employed in many economies
(especially in strong economies such
as China), companies throughout the
world need more women associates.
They will need to develop and effec-
tively utilize all of the organization’s
human capital. The current situation
has led Korean companies to adopt
global business practices that include
rewarding performance regardless of
seniority or gender.
Interestingly, this is a global
phenomenon. While there are some
high-profi le women executives in the
United States, such as Indra Nooyi
(CEO of Pepsico), Ursula Burns (CEO
of Xerox) and Irene Rosenfeld (CEO
of Kraft), the percentage of women
in top executive positions has not
increased in recent years. For ex-
ample, one survey showed that only
about 10 percent of the executives
and board members were women
at the 400 largest publicly traded
companies in California. In addi-
tion, a study of the top 100 compa-
nies based in Massachusetts showed
that only 8.6 of their executives were
women. A global study by Grant
Thornton International found that
only 24 percent of senior executive
positions in privately held companies
were held by women. In fact, 34 per-
cent of the companies had no women
executives. There were a few bright
spots, however. In the Philippines, 47
percent of the senior management po-
sitions were held by women and 42
percent were held by women in Rus-
sia. In total, these data suggest that
the glass ceiling continues to exist in
most countries.
One prominent analyst of the
general treatment of women, Shere
Hite, argues that they also experience
a glass fl oor. The glass fl oor hinders
even lateral movement into other posi-
tions at the basic level. The glass fl oor
barriers include short-term job con-
tracts, child-care tasks, labor markets
divided along gender lines, caring for
elderly family members, etc. Many of
these are the result of culture- and
gender-based biases.
The third concern is the glass bor-
der. For example, it remains problem-
atic in many Asian cultures to have
a woman in charge. Even though
women have been a part of the work-
force for a long time, for the most part
their roles have been limited to staff
entry-level positions and lower-level
positions in manufacturing; rarely are
they found in managerial or execu-
tive positions. A glass border (which
is an unseen and strong discrimina-
tory barrier) exists, blocking women
from accessing many managerial
and executive-level positions. It is im-
portant to note that many Asian com-
panies are still family-owned, with the
men in the family in higher-level po-
sitions than the women. In addition,
Asian companies often are unwilling
to support having the female as the
The Glass Ceiling, the Glass Floor, and
the Glass Border: The Global Business
Environment for Women
©Image Source/Getty Images, Inc.
c03.indd 94c03.indd 94 12/08/10 10:45 AM12/08/10 10:45 AM
The Globalization Experience for Associates and Managers 95
Although participation by women appears to be increasing,61 women historically
have not had as many opportunities for expatriate assignments as men. Managers must
be sensitive to this defi cit because they need to develop and effectively utilize all of the or-
ganization’s human capital. As explained in the Experiencing Organizational Behavior fea-
ture, there are several reasons for the development of this glass border. By not providing
women with international assignments, they are failing to develop women’s knowledge and
capabilities for higher-level jobs. As a result, these organizations may not be able to exploit
strategic opportunities in international markets because of a shortage of human capital.
And interestingly, some research suggests that women are often more effective in expatriate
roles because they tend to be fl exible and develop a more empowering identity in order to
be effective in a variety of situations.62 The plight of women executives is largely a global
phenomenon, as the segment suggests. Women professionals in many countries must con-
tend with glass ceilings, glass borders, and even glass fl oors. The human capital represented
by these women presents a signifi cant opportunity for businesses. Companies that utilize
all of their human capital effectively are more likely to gain a competitive advantage.
Foreign Nationals as Colleagues
Beyond gaining international exposure and experience through a job focused on interna-
tional work or through a foreign assignment, an associate or manager can gain international
experience in other ways. For example, associates and managers may work in a domestic unit
with people from other countries or may report to a manager/executive who has relocated
glass border
The unseen but strong
discriminatory barrier
that blocks many women
from opportunities for
international assignments.
expatriate while her husband remains
at his job in the home country. In ad-
dition, in some Asian cultures, men
rarely help to care for the children,
thereby requiring women who work
outside the home to rely on female rel-
atives for babysitting. Finally, patriar-
chal attitudes are diffi cult to change,
especially at the offi ce. Many clients
still ask to replace women consultants
with men and some bankers continue
to require female CEOs to obtain loan
guarantees from their husbands.
There is some light beginning to
shine in some parts of the world. For
example, in 2009 the fi rst two female
Islamic judges were appointed in the
Palestinian territories. In the Arab
countries, these are the fi rst women
judges outside of Sudan. In addition,
the Saudi king appointed the fi rst
women to his council of ministers.
While these represent a minor crack
in the glass ceiling, these are positive
steps for women.
Even though there is an increase
in the number of female nonexecu-
tives and a few positive appointments
of women to leadership positions,
the change in the number becoming
executives and directors has been
small. To overcome this problem,
companies must promote on the basis
of merit and ignore gender in the
workplace. Women must continue to
work hard to break these barriers and
overcome the glass ceilings, fl oors,
and borders. Given the demograph-
ics around the world, the most suc-
cessful companies will have a healthy
number of women leaders. They will
be successful because they are taking
advantage of the total human capital
available.
Sources: “Women still hold less than a quarter of senior management positions in privately held businesses,” Grant
Thornton International, Nov. 21, 2009, at http://www.internationalbusinessreport.com; Amy Laskowsky. 2009. “The
Glass Ceiling Remains Strong,” Nov. 20, www.bu.edu; Don Thompson. 2009. “Study fi nds women still face diffi cult time
breaking through glass ceiling at Calf. Companies,” Nov. 19, at http://www.baltimoresun.com; Steve Tobak. 2009.
“Is there still a glass ceiling for women in business?” Aug. 24, at http://www.blogs.bnet.com; Diane Tucker. 2009.
“Arab women beginning to crack the glass ceiling,” March 18, at http://www.huffi ngtonpost.com; Nasser Shiyoukhi.
2009. “2 Palestinian women crack the glass ceiling in court,” Feb. 24, at http://www.abcnews.go.com; Hiroko Tashiro
& Ian Rowley. 2005. “Japan: The Glass Ceiling Stays Put,” BusinessWeek, May 2, at http://www.businessweek.com.
c03.indd 95c03.indd 95 12/08/10 10:45 AM12/08/10 10:45 AM
http://www.internationalbusinessreport.com
www.bu.edu
http://www.baltimoresun.com
http://www.blogs.bnet.com
http://www.huffingtonpost.com
http://www.abcnews.go.com
http://www.businessweek.com
96 Chapter 3 Organizational Behavior in a Global Context
from another country. In the United States, H-1B visas allow skilled foreign professionals
to live and work in the country for up to six years. L1 visas allow workers in foreign-based
multinational companies to be transferred to the United States. Finally, J1 visas allow foreign
students to fi ll seasonal jobs in U.S. resort areas, including jobs as waiters, lifeguards, fast-
food cooks, and supermarket clerks. In fact, in recent years the demand for foreign skilled
workers has been growing in many countries, including the United States.63
With hundreds of thousands of visas approved each year, an individual born in the
United States and working in a domestic company may therefore work alongside a foreign
national. U.S.-based associates and managers at Microsoft, for example, often work with
foreign nationals. An associate there observed, “I am surrounded every day by people from
many diverse cultural and ethnic backgrounds, each contributing their unique ideas and
talents so that people around the world can realize their full potential.”64 True to its mul-
ticultural profi le, Microsoft supports a number of international worker groups, including
Brazilian, Chinese, Filipino, Hellenic, Indian, Korean, Malaysian, Pakistani, Singaporean,
and Taiwanese groups.65
Working side by side with individuals from other countries can indeed be a rich and
rewarding experience, but problems sometimes develop. As already noted, individuals from
different countries often have different values and different ways of thinking—and even
different norms for behavior in business meetings.66 Although differences in values and
thought patterns can be a source of creativity and insight, they also can create friction. Pref-
erences for different working styles and decision styles can be particularly troublesome.67
A key aspect of the cultural effects on international working relationships is high
versus low context cultural values.68 In high-context cultures, such as Japan and South
Korea, individuals value personal relationships, prefer to develop agreements on the basis
of trust, and prefer slow, ritualistic negotiations.69 Understanding others and understand-
ing particular messages depend in large part on contextual cues, such as the other person’s
job, schooling, and nationality. Being familiar with a person’s background and current
station in life is crucial, and likely important in establishing trust-based relationships in
international exchange relationships.70 In low-context cultures, such as the United States
and Germany, individuals value performance and expertise, prefer to develop agreements
that are formal and perhaps legalistic, and engage in effi cient negotiations.71 Understand-
ing others in general and understanding particular messages depend on targeted question-
ing. Written and spoken words are crucial; contextual cues tend to carry less meaning.
A related aspect of culture is monochronic versus polychronic time.72 Individuals with
a monochronic time orientation prefer to do one task or activity in a given time period.
They dislike multitasking; they prefer not to divert attention from a planned task because
of an interruption; and they usually are prompt, schedule-driven, and time-focused.73
North Americans and Northern Europeans are usually viewed as relatively monochronic.
In contrast, individuals with a polychronic time orientation are comfortable engaging in
more than one task at a time and are not troubled by interruptions.74 For these individu-
als, time is less of a guiding force, and plans are fl exible. Latin Americans and Southern
Europeans are often polychronic. Individuals from the Southern region of Asia are also
largely polychronic, but many Japanese do not fi t this pattern.
Understandably, individuals from high-context cultures can have diffi culty working
with people from low-context cultures. A high-context individual may not understand or
appreciate the direct questioning and task orientation of a low-context individual. As a
result, the high-context individual can experience hurt feelings, causing him or her dis-
comfort in a low-context culture. In the same way, a low-context person can be frustrated
high-context cultures
A type of culture where
individuals use contextual
cues to understand people
and their communications and
where individuals value trust
and personal relationships.
low-context cultures
A type of culture where
individuals rely on
direct questioning to
understand people and
their communications and
where individuals value
effi ciency and performance.
monochronic time
orientation
A preference for focusing
on one task per unit of
time and completing that
task in a timely fashion.
polychronic time
orientation
A willingness to juggle
multiple tasks per unit of time
and to have interruptions,
and an unwillingness to
be driven by time.
c03.indd 96c03.indd 96 12/08/10 10:45 AM12/08/10 10:45 AM
Opportunities for International Participation 97
with the pace and focus of a high-context culture. In addition, monochronic individuals
may experience confl ict with people who are more polychronic. People who are driven by
schedules and who do not appreciate interruptions often are frustrated by the more re-
laxed view of time held by polychronic people. To alleviate these cross-cultural diffi culties,
training in cultural differences is crucial in order to build managers’ cultural intelligence.
Cultural intelligence helps people understand others’ behavior, with the ability to sepa-
rate those aspects that are universally human from those that are unique to the person and
those that are based in culture. It allows managers to understand and respond effectively to
people from different cultures.75 Cultural intelligence is important for managers, as they
need to be sensitive to these differences when they evaluate the performance of associates
and assign rewards based on these evaluations.76
Opportunities for International Participation
Associates’ and managers’ opportunities for international experiences differ across fi rms.
Purely domestic fi rms offer few opportunities beyond perhaps working with foreign na-
tionals who have been hired or trying to compete with foreign fi rms operating in the local
markets where they sell their goods. Firms that export their goods into foreign markets
offer more opportunities, because some individuals are needed for internationally focused
work, such as international accounting, and a few are needed to staff foreign sales offi ces.
Firms that have more substantial commitments to foreign operations usually provide even
greater opportunities for international work, but the amount and type of opportunities
vary with the type of strategy. Furthermore, the different approaches to markets in sepa-
rate countries used by fi rms affect associates’ and managers’ behavior and job satisfac-
tion.77 As shown in Exhibit 3-3, we can classify fi rms with substantial commitments to
foreign operations as multidomestic, global, or transnational.
cultural intelligence
The ability to separate the
aspects of behavior that are
based in culture from those
unique to the individual or
all humans in general.
EXHIBIT 3-3 International Approaches and Related Organizational Characteristics
Multidomestic Global Transnational
Local responsiveness
Local production High Low Medium
Local R&D High Low Medium
Local product modifi cation High Low Medium/High
Local adaptation of marketing High Low/Medium Medium/High
Organizational design
Delegation of power to local units High Low Medium/Low
Interunit resource fl ows between and among local units Low Low/Medium High
International resource fl ows from and/or controlled Low High Low/Medium
by corporate headquarters
International participation
Opportunities for associates and managers Low High High
Source: Information in this exhibit is based on A.-W. Harzing. 2000. “An Empirical Analysis and Extension of the Bartlett and Ghoshal Typology of
Multinational Companies,” Journal of International Business Studies, 31: 101–120.
c03.indd 97c03.indd 97 12/08/10 10:45 AM12/08/10 10:45 AM
98 Chapter 3 Organizational Behavior in a Global Context
Multidomestic Firms
Firms that use a multidomestic strategy tailor their products and services for various
countries or regions of the world.78 When customer tastes and requirements vary sub-
stantially across countries, a fi rm must be responsive to these differences. Tastes often
vary, for example, in consumer packaged goods. Unilever, the British/Dutch provider of
detergents, soaps, shampoos, and other consumer products, is a prime example by offering
different versions of its products in various parts of the world.79 It produces, for example,
approximately 20 brands of black tea in order to meet the unique tastes of individuals in
different countries.
Firms such as Unilever often transfer power from the corporate headquarters
to units based in various countries or homogeneous regions of the world (i.e., local
units).80 These units typically are self-contained—they conduct their own research and
development, produce their own products and services, and individually market and
distribute their goods. This approach is expensive because geographically based units do
not share resources or help one another as much as in fi rms using other international
strategies. Yet, it may be important to allow autonomy when the subsidiary is a long
distance from the home offi ce, especially when that distance entails major differences in
culture and institutional environments. In these cases, the subsidiary needs to develop
a strategy that fi ts its competitive environment, and the home offi ce is less likely to be
of help in doing so.81
Among fi rms with substantial foreign commitments, multidomestic fi rms provide
fewer opportunities for associates, lower-level managers, and midlevel managers to par-
ticipate in international activities. Individuals tend to work within their home countries
and have little interaction with people located in other geographical locations. Individuals
in each unit are focused on their unit’s country or homogeneous set of countries (region).
Interunit learning, interunit transfers of people, and interunit coordination are rare in
fi rms using a multidomestic strategy.
Global Firms
Firms following a global strategy offer standardized products and services in the coun-
tries in which they are active.82 When cost pressures demand effi cient use of resources
and when tailoring to local tastes is not necessary, a fi rm must do all it can to manage its
resources effi ciently. It is costly to develop, produce, and market substantially different
versions of the same basic product or service across different countries. For example, Mi-
crosoft does not signifi cantly tailor the functionality of Windows for different countries.
Nor does Cemex, the world’s third largest cement company, tailor its cement for differ-
ent countries. While the fi rm sells almost 240 million metric tons of cement annually
across four major regions of the world, the fi rm provides the same product in all countries
where it operates.
Cemex exhibits many features typical of global fi rms.83 First, key decisions related
to: (1) products and services, (2) research and development, and (3) methods for serving
each country are often made at corporate headquarters in Monterrey, Mexico. (In con-
trast, fi rms using the multidomestic strategy make key decisions locally.) Second, coun-
try- and region-based units do not have a full complement of resources covering all of the
major functions (production, marketing, sales, fi nance, research and development, human
multidomestic strategy
A strategy by which a fi rm
tailors its products and
services to the needs of
each country or region in
which it operates and gives
a great deal of power to the
managers and associates in
those countries or regions.
global strategy
A strategy by which a fi rm
provides standard products
and services to all parts of
the world while maintaining
a strong degree of central
control in the home country.
c03.indd 98c03.indd 98 12/08/10 10:45 AM12/08/10 10:45 AM
Opportunities for International Participation 99
resources). For example, Cemex has operations in more than 50 countries but only has
manufacturing operations in select parts of the world. A great deal of manufacturing also
takes place in the home country of Mexico, and the product is then exported to other
countries. By not having manufacturing plants located in and dedicated to each country
or even each region, and by having large-scale manufacturing facilities in select locations,
Cemex effi ciently uses its resources. Cemex also focuses signifi cant attention on global
coordination. With units depending on decisions and resources controlled by the home
country as well as resources from other countries, coordinating a global fl ow of informa-
tion and resources is crucial. One means of growth for Cemex has been by acquisition.
Fortunately, the strong global coordination used by the fi rm helps to rapidly integrate
major acquisitions.
Compared with fi rms following a multidomestic strategy, fi rms using the global strat-
egy provide more opportunities for associates and managers to participate in international
activities. For example, many individuals in the home country and in foreign units must
coordinate effectively to ensure a smooth fl ow of worldwide resources. Thus, many jobs
are internationally oriented. In addition, there are often a large number of expatriate as-
signments. Global fi rms treat the world as a unifi ed market and frequently transfer people
across borders. Thus, in any given unit, there may be a signifi cant number of foreign
nationals. As noted earlier, expatriates learn and transfer knowledge across borders. Yet,
to achieve the most learning at the team level requires the fi rm to consciously manage the
fl ow of knowledge across the organization.84
Transnational Firms
Firms using a transnational strategy attempt to achieve both local responsiveness and
global effi ciency.85 In industries where both of these criteria are important for success, a
careful integration of multidomestic and global approaches is necessary. Thus, a transna-
tional strategy calls for more tailoring to individual countries than is typically found in
global fi rms but generally less tailoring than in multidomestic fi rms.
Such an approach also requires the deployment of more resources in a given country
than is typical in the global fi rm but fewer resources in each country than is typical in the
multidomestic fi rm. Finally, the approach calls for less central direction from the corporate
headquarters than the global strategy but more central coordination than the multidomes-
tic strategy. In a transnational fi rm, interdependent geographical units must work closely
together to facilitate interunit resource fl ows and learning. In the multidomestic fi rm, these
fl ows are trivial. In the global fi rm, they are largely controlled by corporate headquarters.
Ogilvy & Mather Worldwide, a U.S.-based advertising subsidiary of WPP, a world-
wide marketing communications group, uses a transnational strategy.86 At one time, the
fi rm used a strategy that most closely resembled a multidomestic approach. Ogilvy &
Mather tailored the advertising it produced to different areas of the world based on local
customs, expressions, sensibilities, and norms for humor. To support this strategy, it had
strong, self-contained local units. Clients, however, began to object to costs, and because
many of these clients were becoming global fi rms, they wanted a more unifi ed message
spread around the world through advertising. Ogilvy & Mather began to pursue global
effi ciency and local responsiveness simultaneously. It refers to itself as “the most local of
internationals and the most international of the locals.” It has more than 450 offi ces in
120 countries across the globe.87
transnational strategy
A strategy by which a fi rm
tailors its products and services
to some degree to meet the
needs of different countries
or regions of the world but
also seeks some degree of
standardization in order to
keep costs reasonably low.
c03.indd 99c03.indd 99 12/08/10 10:45 AM12/08/10 10:45 AM
100 Chapter 3 Organizational Behavior in a Global Context
To prevent local units from reinventing largely the same advertising campaign (in
other words, unnecessarily tailoring campaigns to the local market), Ogilvy & Mather
implemented international teams that were assigned to service major accounts.88 These
teams create ad campaigns and send them to local units for implementation. One team
is called OgilvyAction, designed to provide a full range of brand activation services to
customers on a global basis.89 Local units pursue local accounts and have complete con-
trol over them but are constrained in their ability to pursue and oversee international
work.
Overall, individual associates and managers have many opportunities for interna-
tional exposure and experiences in fi rms using a transnational approach. Geographically
based units are highly interdependent because they must exchange resources, and they
often must coordinate these resource exchanges for their benefi t as well. Rich personal
networks and formal coordination mechanisms such as international work teams are
developed to handle the interdependence. International meetings and travel are very
important, and foreign assignments are common. Interestingly, the location of the head-
quarters for these fi rms is less important and some move their headquarters unit from
their traditional home country when they adopt the transnational strategy. Normally,
these moves are designed to respond to external stakeholders such as shareholders and
fi nancial markets.90
High-Involvement Management in the
International Context
High-involvement management provides associates with decision power and the informa-
tion they need to use that power effectively. As discussed in Chapter 1, fi rms that adopt
this approach often perform better than other fi rms. Although most evidence support-
ing the effectiveness of the high-involvement approach has been collected from domestic
units of North American fi rms,91 sound evidence has come from other countries as well.
Studies, for example, have been conducted in automobile plants worldwide,92 in a variety
of fi rms in New Zealand,93 and in fi rms in 11 different countries.94 A study in China
suggested that such practices enhanced short-term associates’ feelings of competence and
increased their commitment to the organization.95
Although available evidence is supportive of high-involvement management, care
must be taken when implementing this approach in different cultures. Modifying the
approach to fi t local circumstances is crucial.96 In this section, we discuss several dimen-
sions of national culture that should be considered. The dimensions are drawn from the
GLOBE (Global Leadership and Organizational Behavior Effectiveness) research pro-
gram, in which a number of researchers studied issues regarding organizational behavior
in 61 countries.97
Dimensions of National Culture
As shown in Exhibit 3-4, the GLOBE project uses nine dimensions of national culture.
Four of these dimensions have been used by many other researchers over the years. These
four dimensions were originally developed by the Dutch social scientist Geert Hofstede98
and they are listed fi rst.
c03.indd 100c03.indd 100 12/08/10 10:45 AM12/08/10 10:45 AM
High-Involvement Management in the International Context 101
1. Uncertainty avoidance is the degree to which members of a society wish to avoid
unpredictable lives. It is focused on a society’s desire for orderliness through
formal procedures and rules as well as through strong norms that govern
behavior. Countries with high scores do not value free spirits. Such countries
include Austria and Germany. Countries with lower scores include Russia and
Hungary. The United States has a midrange score.
2. Power distance is the degree to which members of a society expect power to be
unequally distributed. This dimension corresponds to expectations for strong
autocratic leadership rather than more egalitarian leadership. Strong central
governments and centralized decision structures in work organizations are
frequently found in countries with high scores. For example, Russia scores high
on this dimension. Alternatively, Denmark and the Netherlands have low scores
on power distance.
3. Individualism is the degree to which members of society are comfortable
focusing on personal goals and being rewarded for personal efforts and
outcomes. In individualistic cultures, personal outcomes are valued. Countries
scoring high on individualism include Italy and Germany. Countries scoring
low on this dimension include Japan, Singapore, and South Korea.99
4. Assertiveness is the degree to which members of society are aggressive and
confrontational. In his original work, Hofstede labeled this aspect of culture
“masculinity.” Examples of countries with high scores on this dimension are the
United States, Austria, and Germany. Examples of countries with low scores are
Sweden and Kuwait.
5. In-group collectivism indicates how much members of society take pride in the
groups and organizations to which they belong, including the family. China and
India have high scores on this dimension in the GLOBE research.
Exhibit 3-4 Dimensions of National Culture
Power
Distance Individualism
Assertiveness
Humane
Orientation
Performance
Orientation
Future
Orientation
Gender
Egalitarianism
In-group
Collectivism
Uncertainty
Avoidance
National
Culture
c03.indd 101c03.indd 101 12/08/10 10:45 AM12/08/10 10:45 AM
102 Chapter 3 Organizational Behavior in a Global Context
6.Gender egalitarianism refers to equal opportunities for women and men. Sweden
and Denmark score high on this dimension.
7. Future orientation is the degree to which members of the society value long-term
planning and investing in the future. Denmark and the Netherlands are among
those scoring high on this dimension.
8. Performance orientation is the degree to which members of society appreciate
and reward improvement and excellence in schoolwork, athletics, and work life.
The United States, Taiwan, Hong Kong, and Singapore have high performance
orientations.
9. Humane orientation is the degree to which members of society value generous,
caring, altruistic behavior. Countries scoring high on this dimension include the
Philippines and Malaysia.
Exhibit 3-5 compares India, Germany, and the United States on all nine culture
dimensions.
Research has shown that national culture affects major business practices.100 For example,
decisions to enter particular international markets are affected by the cultural dimensions of
the targeted country.101 In particular, the cultural distance between a fi rm’s home country and
the country targeted for entry has a major impact. Cultural distance refers to the extent of the
differences in culture between countries.102 Therefore, managers must pay careful attention to
culture in designing and implementing management practices in each country.
In the Experiencing Organizational Behavior feature, we learn of the pioneering work
of Geert Hofstede to identify the universal dimensions of national culture. He also discov-
ered that national culture had a stronger effect on the behavior of managers and associ-
ates than did organizational culture. Hofstede’s work suggested the need to understand
and manage diverse cultures. This need is highlighted in the problems experienced in
EXHIBIT 3-5 National Culture in India, Germany, and the
United States
Culture Dimension India Germany United States
Uncertainty avoidance Medium High Medium
Power distance Medium/High Medium Medium/Low
Individualism Medium High Medium
Assertiveness Low/Medium High High
In-group collectivism High Low/Medium Medium/Low
Gender egalitarianism Low Medium/Low Medium
Future orientation Medium Medium Medium
Performance orientation Medium Medium High
Humane orientation High/Medium Low Medium
Source: Based on the GLOBE Project.
c03.indd 102c03.indd 102 12/08/10 10:45 AM12/08/10 10:45 AM
FPO
Geert Hofstede pioneered the study of culture in the workplace and conducted
research to examine global variations
in the psychology of work and of orga-
nizations, which affected international
human resource management. While
working at IBM in 1968, he noticed
that although the company had a
strong company culture, there were
variations in cultural values among the
employees of IBM subsidiaries around
the world. Between 1968 and 1972,
he surveyed over 116,000 employ-
ees. His survey responses from over
40 countries showed general similari-
ties within cultural groups, even when
their social and economic histories
were profoundly different. For exam-
ple, Hong Kong and mainland China
have more in common with each other
but are quite different from Sweden
and the United States. Hofstede found
that values we observe in the work-
place refl ect much deeper cultural attri-
butes, suggesting that the impact of na-
tional culture on the workplace is much
greater than that of the organization’s
culture. His work has profound mean-
ing for managers employed by multi-
national organizations.
Managers and top executives of
companies seeking to expand glob-
ally need to recognize the complexi-
ties of cross-border collaboration.
Diffi culty in managing people is mag-
nifi ed when even small differences in
perceptions and expectations occur,
making collaboration diffi cult, as re-
fl ected in the cross-cultural problems
that occurred in the merger between
Daimler and Chrysler. Some experts
believed that the merger had substan-
tial potential because of the different
but complementary capabilities pos-
sessed by the two fi rms. However,
that potential was not realized partly
because of national cultural differ-
ences between Germans and Ameri-
cans. The Germans in Daimler dis-
liked Chrysler managers’ unstructured
approach, while American Chrysler
managers found the German Daimler
managers too rigid and formal. The
culture clash disallowed effective in-
tegration of the two fi rms and their
respective associates. Many Chrysler
managers left the organization, and
the potential synergy between the
two fi rms was never realized. Daimler
eventually sold the Chrysler business
at a tremendous loss over what it paid
to acquire it.
Managers may need to utilize dif-
ferent concepts and methods for differ-
ent times and places. Managers need
to be aware of the local cultures’ val-
ues, social ideals, and their workplace
behavior and attitudes. Multinational
companies engaging in cross-border
mergers can be successful when they
have managers who possess “cultural
intelligence,” the ability to understand
and effectively manage different val-
ues and expectations existing in differ-
ent parts of the world. Several fi rms
have promoted diversity in their work-
force as a means of managing and
taking advantage of many cultures
in the world. For example, Siemens
believes that a diverse workforce can
be a competitive advantage because
it helps the company to understand
and better serve its customers across
the world. Sie-
mens currently
employs more
than 430,000
managers and
associates rep-
resenting 140
different na-
tionalities in its
top 10 markets.
To encourage
collaboration and communication
among its workforce members, it has
launched several networks such as
the Global Leadership Organization
of Women (GLOW Network) and the
diversity ambassadors program. The
diversity ambassadors are 100 spe-
cially selected managers and associ-
ates who are profi led and share their
success stories while serving as role
models and mentors for others in the
company.
Other companies are also pro-
moting diversity as a way to take
advantage of culturally diverse knowl-
edge and ways of thinking. For ex-
ample, ABB has a highly diverse
board of directors with members from
Belgium, Finland, France, Germany,
India, Scotland, Sweden, Switzer-
land, and the United States. Procter
& Gamble (P&G) also promotes a
diverse workforce. The fi rm does so
to understand and maintain a good
relationship with its customers around
the world and its global suppliers as
well. P&G’s CEO stated that “Diverse
organizations will out-think, out-inno-
vate and out-perform a homogeneous
organization. …”
Sources: “Siemens AG—Diversity,” Siemens, Nov. 22, 2009, at http://www.siemens.com; G. Schoech. 2009. “Diversity
to strengthen Siemens leadership—catching up or taking the lead?” Gehson Lehrman Group, March 17, at http://www.
glgroup.com; H. Brown. 2009. “Diversity does matter,” Forbes, July 21, at http://www.forbes.com; “No. 14: Procter
& Gamble,” Diversity Inc., May, 2007, at http://www.diversityinc.com; Morgan Witzel. 2003. “Geert Hofstede: The
Quantifi er of Culture,” Financial Times, Aug. 25, at http://www.ft.com; M.A. Hitt, R.S. Harrison, & R.D. Ireland. 2001.
Mergers and Acquisitions: A Guide to Creating Value for Stakeholders, New York: Oxford University Press.
EXPERIENCING ORGANIZATIONAL BEHAVIOR
Managing Diverse Cultures
©Siemens AG
c03.indd 103c03.indd 103 12/08/10 10:45 AM12/08/10 10:45 AM
http://www.siemens.com
http://www.glgroup.com
http://www.glgroup.com
http://www.forbes.com

2021 Homepage


http://www.ft.com
104 Chapter 3 Organizational Behavior in a Global Context
the merger between Daimler Benz and Chrysler, in which the managers of the respective
fi rms were not understanding and tolerant of the cultural attributes that differed from
their own. Yet, other companies recognize the value of diversity and have promoted it in
various ways. For example, Siemens does so through its global networks to encourage col-
laboration across cultures and its diversity ambassadors program. ABB has a highly diverse
board of directors, and P&G promotes diversity because it will provide the company
with a competitive advantage. With increasing globalization, understanding and manag-
ing diverse cultures has become a critical managerial attribute for competitive success in
international markets.
National Culture and High-Involvement Management
High-involvement management must be implemented in accordance with a country’s
cultural characteristics. Although not every individual from a country will possess all
of the cultural characteristics associated with that country, many people will share these
traits. In the next section, we discuss how information sharing and decision power can
be adapted to different levels of power distance, uncertainty avoidance, individualism,
and assertiveness.103
Information Sharing
A fi rm’s leaders must share tactical and strategic information if empowered individuals
and teams are to make high-quality decisions. In cultures high in uncertainty avoidance,
associates must have information to clarify issues and provide basic direction. If they lack
such information, anxiety and poor performance can result. Where uncertainty avoid-
ance is low, associates need less information of this kind. Rather, increasing information
that encourages new ideas and ways of thinking can be useful. In cultures where asser-
tiveness is high, associates want information that clearly and directly informs them what
is needed for effective performance. In addition, they desire continuous information on
how well they are performing. In cultures with low assertiveness, associates do not want
information that is exclusively focused on performance and bottom-line business goals.
Instead, they desire information on improving soft processes such as teamwork. Simi-
larly, associates in individualistic cultures desire information regarding their individual
jobs and responsibilities; they are less interested in information on team, department,
and company issues. Associates in collectivistic cultures tend to have the opposite needs.
Finally, associates in high-power-distance cultures do not expect to receive a great deal of
information and may not pay much attention to it if they receive it. For these individu-
als, careful training in information use is often required. In low-power-distance cultures,
associates expect information and put it to use when it is received. Thus, cultural attri-
butes affect the type and amount of information shared and the knowledge learned in
organizations.104
Decision Power and Individual Autonomy
Some high-involvement systems give a great deal of decision power to individual associates
rather than to teams. In cultures characterized by high uncertainty avoidance, such auton-
omy can cause stress because it is associated with less direction from above as well as less
support from peers. To avoid stress, clear boundaries must be set for how the autonomy
c03.indd 104c03.indd 104 12/08/10 10:45 AM12/08/10 10:45 AM
High-Involvement Management in the International Context 105
is used, and managers must be readily available to provide direction. In cultures with low
uncertainty avoidance, associates do not need direction and are generally able to tolerate
uncertainty regarding the boundaries to their authority. In high-assertiveness cultures, as-
sociates are likely to use autonomy creatively to achieve task success. In low-assertiveness
cultures, associates may channel too much of their autonomy into work on soft issues such
as relationships and social networks. Managers must guard against any such excesses. In
countries characterized by an individualistic culture, associates appreciate autonomy pro-
vided to individuals rather than to teams, and emphasize individual goals. Because of this
focus, managers may need to explicitly channel associates’ attention to any required group
or team tasks. In countries characterized by a collectivistic culture, associates are unlikely
to be motivated by individual autonomy. Managers may wish to emphasize autonomy at
the team level in such cultures. Finally, in cultures characterized by high power distance,
autonomy may be diffi cult to implement. Associates expect a great deal of direction from
managers. In this situation, managers may want to provide small increases in autonomy
over time, allowing associates to become accustomed to having discretion. Managers may
want to maintain a fairly strong role even in the long run. In cultures characterized by
low power distance, associates welcome autonomy from managers and can channel their
efforts to be more innovative.105
Decision Power and Self-Managing Teams
In cultures with high uncertainty avoidance, associates need clear boundaries for self-
managing teams, and managers must be readily available for mentoring and coaching.106
In cultures with low uncertainty avoidance, teams can defi ne their own roles. In coun-
tries characterized by high assertiveness, teams often are task-focused. For low-assertive-
ness cultures, associates frequently devote a great deal of time to soft issues, such as team
dynamics, requiring managers to monitor the time focused on such issues. In cultures
characterized by individualism, managers must pay particular attention to team training
for associates and to the design of team-based reward systems. Alternatively, in cultures
characterized by collectivism, managers have a more favorable situation because associ-
ates prefer teamwork. Finally, in cultures characterized by high power distance, associates
may have diffi culties using their decision power if their manager is too visible. Managers
must be less visible and resist the temptation to offer a great deal of assistance to the team.
Where power distance is low, associates work comfortably with the manager as an equal or
as a coach rather than a supervisor.
AES, a U.S.-based power-generation company, is known for its high-involvement
management system. Associates enjoy tremendous freedom to make decisions individually
and in teams. Firing vendors for safety violations, expending funds from capital budgets,
and making key decisions about important day-to-day work are common for associates.
With careful selection and training, and with access to key information, AES associates
typically use their freedom wisely.
As AES began to grow and establish operations in several countries, many analysts and
reporters questioned whether its high-involvement system and underlying values could be
applied in an international context. Although AES leaders remained committed to the
system, they realized that some modifi cations might be needed for a particular country.
Therefore, while the core of the approach was preserved, some aspects were altered to fi t
each local culture.
c03.indd 105c03.indd 105 12/08/10 10:45 AM12/08/10 10:45 AM
106 Chapter 3 Organizational Behavior in a Global Context
When entering Nigeria, for example, AES responded appropriately to the prevailing
culture. Norman Bell, the lead on the Nigerian project, and his AES colleagues encoun-
tered high power distance and high individualism among the associates in Nigeria. These
prominent cultural values initially forced Bell to adopt a more autocratic management
system. Bell needed time to delegate decision power to associates, and teams required
training and team-based reward systems.
AES used the same basic approach in its operations across 29 countries and 25,000
managers and associates: high-involvement management built on the company’s core
values with sensitivity to local cultural differences.107 Thus, executives and managers
at AES effectively used the high-involvement approach on a global basis while modify-
ing the approach to fi t local cultures. The high-involvement approach facilitated the
global strategy used by AES. Therefore, it helped top managers to implement the fi rm’s
strategy.
Ethics in the International Context
A critically important issue in globalization and international business is ethics. The
American Heritage Dictionary defi nes ethics as “principle[s] of right or good conduct; a sys-
tem of moral principles and values.” Implicit in this defi nition is the idea that ethical con-
duct can be different in different cultures. What one society deems “appropriate conduct”
may be unacceptable to another. For example, nepotism that is unacceptable in many
Western cultures is often more acceptable in relationship-oriented cultures. Alternatively,
the use of formal contracts and lawsuits are highly acceptable in many Western cultures
but are perceived negatively in other cultures.108 Thus, international ethics are complex.
Corruption is often considered to be the misuse of power for private gain.109 Three is-
sues are prominent in discussions of proper conduct in developed nations: (1) corruption,
(2) exploitation of labor, and (3) environmental impact.110 For corruption, the chief issue
involves bribing foreign public offi cials in order to win business. Asking for payment of
bribes is based partially on culture and partly on economic needs and institutional weak-
nesses in a country.111 Many developed nations have taken steps to fi ght corruption because
it creates uncertainty and results in a reduction of merit-based decision making. The United
States, for example, passed the Foreign Corrupt Practices Act in 1977 to prevent U.S. man-
agers from bribing foreign offi cials. (See Exhibit 3-6 for a recent ranking of countries based
on corruption.) Exploitation of labor involves the employment of children, the forced use
of prison labor, unreasonably low wages, and poor working conditions. In one well-known
example involving a line of clothing produced for Wal-Mart, Chinese women were work-
ing 84 hours per week in dangerous conditions while living in monitored dormitories with
12 persons to a room.112 Americans and others expressed their strong unhappiness with this
practice, and Wal-Mart discontinued it. Finally, environmental impact relates to pollution
and overuse of scarce resources. From global warming to clear cutting of forests, the con-
cerns are many. In the United States and globally, many people have become more sensitive
to the environment because of the obvious effects of global warming.
The economic development of countries with higher levels of corruption tends to
suffer. For example, countries with high corruption index scores as shown in Exhibit 3-6
often receive less direct investment from foreign fi rms. In addition, the foreign investment
in these countries more commonly comes from fi rms based in other countries with greater
corruption.113 Thus, corruption harms the country and its citizens.
international ethics
Principles of proper
conduct focused on
issues such as corruption,
exploitation of labor, and
environmental impact.
c03.indd 106c03.indd 106 12/08/10 10:45 AM12/08/10 10:45 AM
Ethics in the International Context 107
EXHIBIT 3-6 Absence of Corruption in Select Countries
Rank Country Rank Country
1 New Zealand 158 Tajikistan
2 Denmark 162 Angola
3 Singapore 162 Congo Brazzaville
3 Sweden 162Democratic Republic of Congo
5 Switzerland 162 Guinea-Bissau
6 Finland 162 Kyrgyzstan
6 Netherlands 162 Venezuela
8 Australia 168 Burundi
8 Canada 168 Equatorial Guinea
8 Iceland 168 Guinea
11 Norway 168 Haiti
12 Hong Kong 168 Iran
12 Luxembourg 168 Turkmenistan
14 Germany 174 Uzbekistan
14 Ireland175 Chad
16 Austria 176 Iraq
17 Japan 176 Sudan
17 United Kingdom 178 Myanmar
19 United States 179 Afghanistan
20 Barbados 180 Somalia
Source: Rankings are drawn from Transparency International’s Corruption Perception’s Index 2009 for 180
countries (http://www.transparency.org). Scores are based on the perceptions of the degree of corruption as
seen by businesspeople and country analysts. The score ranges from 10 (highly clean) to 0 (highly corrupt).
The United Nations, the World Bank, the International Labor Organization, the
World Trade Organization, and the Organization for Economic Co-operation and De-
velopment are among many organizations that advocate a unifi ed set of global ethical
standards to govern labor practices and general issues related to international business. As
shown in the Exhibit 3-7, business leaders from Japan, Europe, and North America in the
Caux Round Table have developed a list of expectations for companies engaging in inter-
national business. These ethical standards are intended to govern what strategies managers
select and how they implement those strategies in dealings with others, both within and
outside their organizations.
c03.indd 107c03.indd 107 12/08/10 10:45 AM12/08/10 10:45 AM
http://www.transparency.org
108 Chapter 3 Organizational Behavior in a Global Context
EXHIBIT 3-7 Caux Round Table Principles for Business
Business leaders from Japan, Europe, and North America formed the Caux Round Table in 1986 to promote moral
values in business. The principles they developed are based on two ideals: kyosei and human dignity. Kyosei, a
Japanese concept, means “living and working together for the common good, enabling cooperation and mutual
prosperity to exist with healthy and fair competition.” The seven specifi c principles the executives promote are
listed below:
1.The Responsibilities of Business. The value of a business to society is the wealth and employment it creates and
the marketable products and services it provides to consumers at a reasonable price commensurate with quality.
To create such value, a business must maintain its economic health and viability, but survival is not a suffi cient
goal. Businesses have a role to play in improving the lives of all of their customers, associates, and shareholders
by sharing with them the wealth they have created. Suppliers and competitors as well should expect businesses
to honor their obligations in a spirit of honesty and fairness. As responsible citizens of the local, national,
regional, and global communities in which they operate, businesses have a part in shaping the future of those
communities.
2.The Economic and Social Impact of Business. Businesses established in foreign countries to develop, produce,
or sell should also contribute to the social advancement of those countries by creating productive employment
and helping to raise the purchasing power of their citizens. Businesses also should contribute to human rights,
education, welfare, and vitalization of the countries in which they operate.
Businesses should contribute to economic and social development not only in the countries in which they operate,
but also in the world community at large, through effective and prudent use of resources, free and fair competition,
and emphasis upon innovation in technology, production methods, marketing, and communications.
3.Business Behavior. While accepting the legitimacy of trade secrets, businesses should recognize that sincerity,
candor, truthfulness, the keeping of promises, and transparency contribute not only to their own credibility
and stability but also to the smoothness and effi ciency of business transactions, particularly on the international
level.
4.Respect for Rules. To avoid trade frictions and to promote freer trade, equal conditions for competition, and fair
and equitable treatment for all participants, businesses should respect international and domestic rules. In addition,
they should recognize that some behavior, although legal, can still have adverse consequences.
5.Support for Multilateral Trade. Businesses should support the multilateral trade systems of the General Agreement
in Tariffs and Trade (GATT) World Trade Organization (WTO), and similar international agreements. They
should cooperate in efforts to promote the progressive and judicious liberalization of trade and to relax
those domestic measures that unreasonably hinder global commerce, while giving respect to national policy
objectives.
6.Respect for the Environment. A business should protect and, where possible, improve the environment, promote
sustainable development, and prevent the wasteful use of natural resources.
7.Avoidance of Illicit Operations. A business should not participate in or condone bribery, money laundering, or
other corrupt practices: indeed, it should seek cooperation with others to eliminate these practices. It should not
trade in arms or other materials used for terrorist activities, drug traffi c, or other organized crime.
Sources: Caux Round Table, “Principles for Business,” 2007, at http://www.cauxroundtable.org; P. Carlson and M.S. Blodgett. 1997. “International Eth-
ics Standards for Business: NAFTA, CAUX Principles and Corporate Code of Ethics,” Review of Business, 18, no. 3: 20–23.
c03.indd 108c03.indd 108 12/08/10 10:45 AM12/08/10 10:45 AM

Home


What This Chapter Adds to Your Knowledge Portfolio 109
What This Chapter Adds to Your
Knowledge Portfolio
In this chapter, we have defi ned globalization and discussed the forces that infl uence it. We
have also discussed three types of international involvement on the part of associates and
managers: internationally focused jobs, foreign job assignments, and working with foreign
nationals in the home country. After describing differing opportunities for international
involvement, we explored dimensions of culture from the GLOBE project and examined
the implications of cultural differences for high-involvement management. Finally, we
examined issues regarding ethics in international settings. More specifi cally, we covered
the following points:
• Globalization is the trend toward a global economy whereby products, services,
people, technologies, and fi nancial capital move relatively freely across national
borders. Globalization increased dramatically in the last 20 years of the twentieth
century and in the fi rst decade of the twenty-fi rst century.
• Globalization presents opportunities and challenges for nations. The principal
opportunity is for economic growth. Challenges include the possible loss of a
nation’s cultural uniqueness as uniform goods and services become commonplace
throughout the world. For developing nations, additional challenges include the
THE STRATEGIC LENS
Organizations large and small must develop strategies to compete in the global econ-
omy. For some organizations, strate-
gies leading to direct investment in
foreign operations are valuable for
growth, lower costs, and better man-
agement of the organization’s risk. For
other organizations, only exporting
goods and services for selling in other
countries is suffi cient to meet their
goals. For still other fi rms, particularly
small ones, participation in interna-
tional markets may be limited, but com-
petition from foreign fi rms in their local
domestic markets may require that
they respond with competitive actions.
In all cases, understanding other cul-
tures and effectively managing cross-
cultural activities and contexts are
crucial. Without insight and sensitivity
to other cultures, senior managers are
unlikely to formulate effective strate-
gies. Without appreciation for other
cultures, associates and midlevel and
lower-level managers can also fail in
their efforts to implement carefully de-
veloped strategic plans. Furthermore,
managers must prepare associates to
work in international environments.
This preparation often requires train-
ing and international assignments.
Managers must also develop all of the
organization’s human capital—includ-
ing women, who often have not had
as many opportunities for expatriate
assignments as men—and must ensure
that the organization has the capabili-
ties to take advantage of and exploit
opportunities in international markets
when they are identifi ed. Cultural di-
versity among the fi rm’s human capital
can be an advantage if managers use
it effectively. Many organizations op-
erate or sell their products in foreign
markets. Thus, managers and associ-
ates must understand cultural diversity
and use this knowledge to their advan-
tage in managing it.
Critical Thinking Questions
1. Given the complexity and chal-
lenges in operating in foreign
countries, why do organizations
enter international markets?
2. How can understanding and man-
aging cultural diversity among as-
sociates contribute positively to an
organization’s performance?
3. How can being knowledgeable of
diverse cultures enhance an indi-
vidual’s professional career?
c03.indd 109c03.indd 109 12/08/10 10:45 AM12/08/10 10:45 AM
110 Chapter 3 Organizational Behavior in a Global Context
protection of labor from exploitation and natural
resources from depletion. For wealthy nations,
additional challenges include prevention of job
loss to lower-wage countries and preservation of
high-level wage structures at home.
• Globalization presents opportunities and chal-
lenges for organizations. Opportunities include
growth, risk reduction through diversifi cation,
greater economies of scale, and location advan-
tages (e.g., moving into an area with a particularly
talented labor pool). Challenges includepolitical
risk (instability of national governments, threat
of war, and threat of state- sponsoredterrorism),
economic risk (fl uctuation in the value of
foreign currencies and the possibility of sudden
economic contraction in some countries), and
managerial risk (diffi culties inherent in managing
the complex resource fl ows required in a global
or transnational fi rm).
• Individuals can be involved in the international
domain through internationally focused jobs.
Such individuals work from their home countries
but focus on international issues as part of their day-to-day work. Membership
in one or more virtual teams is often part of the job. Members of a virtual team
coordinate their activities mainly through videoconferencing, teleconferencing,
chat rooms, and e-mail. Having some face-to-face meetings and taking steps to
ensure that individuals identify with the team facilitate team success.
• Individuals can also be involved in the international domain through foreign job
assignments. These individuals are known as expatriates, and they often are on
a fast track for advancement. In their new countries, expatriates may experience
culture shock, a stress reaction caused by the foreign context. Failure of a spouse
to adjust and strong ethnocentrism in the host country are two additional factors
leading to stress for expats. Careful screening of candidates for foreign assignments
and rich cultural training can reduce stress and improve chances for success.
• Individuals can be involved in the international domain by working alongside
foreign nationals. This is often exciting and rewarding, but cultural differences
must be appreciated and accommodated, particularly those differences related to
low- versus high-context values and monochronic versus polychronic time values.
• Some executives and managers choose a multidomestic strategy for their fi rm’s
international activities. This strategy, involving tailoring products and services
for different countries or regions, tends to be used when preferences vary
substantially across local markets where the fi rm has subsidiary operations.
Because country-based or regionally based units are focused on their own local
domains, associates and managers have limited opportunities for international
exposure and experience.
• Some executives and managers choose a global strategy for their fi rm’s international
activities. This strategy, involving standardized products and services for world
markets, tends to be emphasized when needs for global effi ciency are strong.
?back to the knowledge objectives
1. What is globalization?
2. What are the three types of international involvement
available to associates and managers? What problems
can be encountered with each type?
3. How do opportunities for international involvement dif-
fer in fi rms emphasizing multidomestic, global, and
transnational strategies? Which type of fi rm would you
prefer to join and why?
4. What are the key dimensions of national culture that
infl uence the success of high-involvement management?
How should high-involvement management be adapted
to differences in culture?
5. What are several international standards for ethical
behavior by businesses (refer to the Caux Round Table
Principles)? Briefl y discuss each one.
c03.indd 110c03.indd 110 12/08/10 10:45 AM12/08/10 10:45 AM
Key Terms 111
Country- or region-based units are not self-contained, independent, or exclusively
focused on local markets. Instead, at a minimum, each unit interacts frequently and
intensively with the home country, and probably with some units located in other
countries. Global fi rms offer associates and managers many more opportunities for
international involvement than do multidomestic fi rms.
• Some executives and managers choose a transnational strategy for their fi rm’s
international activities. This strategy balances needs for local responsiveness and
global effi ciency through a complex network of highly interdependent local units.
Associates and managers enjoy many opportunities for international involvement in
transnational fi rms.
• National cultures differ in many ways. Four dimensions have proven to be
particularly useful in understanding these differences: uncertainty avoidance, power
distance, individualism, and assertiveness. Organizational behavior researchers
have proposed fi ve other dimensions: in-group collectivism, gender egalitarianism,
future orientation, performance orientation, and humane orientation.
• High-involvement management must be adapted to differences in national culture.
Two aspects of this management approach, information sharing and decision
power, are particularly important for adaptation.
• Many groups, including the World Trade Organization and the Caux Round
Table, have developed guidelines for ethics in the international context. Key issues
for developed countries include: (1) corruption, (2) exploitation of children, and
(3) environmental impact.
Thinking about Ethics
1. Some have argued that globalization is a negative process because it can destroy national
cultures. Do senior managers in global fi rms have a responsibility to prevent such damage? Or
is their primary responsibility to maximize profi ts for their shareholders?
2. The members of cross-cultural virtual teams are prone to misperceptions and
misunderstandings due to the lack of rich face-to-face communication. Under these
circumstances, should a manager terminate an individual who has been a source of
interpersonal problems in the context of such a team? Explain your answer.
3. A hard-working and generally effective associate has shown little appreciation for the cultural
diversity in his unit. In fact, he has expressed some minor hostility toward several foreign
nationals in the workplace. Also, he has not taken cross-cultural training seriously. How should
the manager respond?
4. An experienced expatriate has hired underage labor at a cheap rate in order to save money.
How should her fi rm respond to this situation?
Key Terms
globalization, p. 86
culture, p. 86
virtual electronic teams, p. 90
swift trust, p. 90
expatriate, p. 91
culture shock, p. 92
ethnocentrism, p. 92
glass border, p. 95
high-context cultures, p. 96
low-context cultures, p. 96
monochronic time
orientation, p. 96
polychronic time
orientation, p. 96
cultural intelligence, p. 97
multidomestic
strategy, p. 98
global strategy, p. 98
transnational
strategy, p. 99
international ethics, p. 106
c03.indd 111c03.indd 111 12/08/10 10:45 AM12/08/10 10:45 AM
112 Chapter 3 Organizational Behavior in a Global Context
Human Resource Management Applications
The Human Resource Management (HRM) function plays a key role in a fi rm’s capability to
manage international operations and to compete effectively in global markets. Following are several
activities in which they facilitate management in the fi rm.
The HRM unit is often responsible for establishing the policies related to expatriate assign-
ments. For example, there are often important compensation issues that must be handled for expatri-
ates. Questions must be answered, such as: (1) Should they receive extra pay while on assignment
away from home (Commonly, they retain their current home and must have living quarters in the
foreign location as well)? (2) How are the tax differences in the different countries to be handled? (3)
Do they need additional or different benefi ts (e.g., health care) in the foreign location?
Training (an HRM responsibility) plays a key role in expatriate assignments and in building
managerial capabilities. For example, associates and managers undertaking expatriate assignments
often receive cultural training to prepare them to live and work in the new cultural environment.
Training may also be used to help managers learn how to more effectively manage in a global market
environment. Frequently, such training will emphasize the value of cultural diversity and effectively
using all of the organization’s available human capital. Career planning (an HRM responsibility) is
important for identifying when to give associates and managers expatriate assignments based on the
knowledge and skills needed for the future positions in positions projected for their careers in the
organization.
building your human capital
Assessment of Openness for International Work
In this age of globalization, it is important to clearly understand your own feelings about interna-
tional teams and assignments. In the following installment of Building Your Human Capital, we
present an assessment of openness for international work. The assessment measures specifi c atti-
tudes and behaviors thought to be associated with this type of openness.
Instructions
In the following assessment, you will read 24 statements. After carefully reading each statement,
use the accompanying rating scale to indicate how the statement applies to you. Rate yourself as
honestly as possible.
Never Often
1. I eat at a variety of ethnic restaurants. 12345
2. I attend foreign fi lms. 12345
3. I read magazines that address world events. 12345
4. I follow world news on television or the Internet. 12345
5. I attend ethnic festivals. 12345
6. I visit art galleries and/or museums. 12345
7. I attend the theater, concerts, ballet, etc. 12345
8. I travel widely within my own country. 12345
Strongly Strongly
Disagree Agree
9. I would host a foreign exchange student. 12345
10. I have extensively studied a foreign language. 12345
c03.indd 112c03.indd 112 12/08/10 10:45 AM12/08/10 10:45 AM
Building Your Human Capital 113
11. I am fl uent in another language.12345
12. I have spent substantial time in another part of the world.
13. I visited another part of the world by the age of 18. 12345
14. My friends’ career goals, interests, and education are diverse. 12345
15. My friends’ ethnic backgrounds are diverse.12345
16. My friends’ religious affi liations are diverse.
17. My friends’ fi rst languages are diverse.12345
18. I have moved or been relocated substantial distances.12345
19. I hope the company I work for (or will work for) will
send me on an assignment to another part of the world.12345
20. Foreign-language skills should be taught in12345
elementary school.
21. Traveling the world is a priority in my life.12345
22. A year-long assignment in another part of the world would12345
be a fantastic opportunity for me and/or my family.
23. Other cultures fascinate me.12345
24. If I took a vacation in another part of the world, I would 12345
prefer to stay in a small, locally owned hotel rather than
a global chain.
Scoring Key for Openness to International Work
Four aspects of openness to international work have been assessed. To create scores for each of the
four, combine your responses as follows:
Extent of participation in cross-cultural activities:Item 1 � Item 2 � Item 3 � Item 4 � Item 5
� Item 6 � Item 7 � Item 8
Participation scores can range from 8 to 40. Scores
of 32 and above may be considered high, while
scores of 16 and below may be considered low.
Extent to which international attitudes are held:Item 9 � Item 19 � Item 20 � Item 21 �
Item 22 � Item 23 � Item 24
Attitude scores can range from 7 to 35. Scores
of 28 and above may be considered high, while
scores of 14 and below may be considered low.
Extent of international activities:Item 10 � Item 11 � Item 12 � Item 13 �
Item 18
Activity scores can range from 5 to 25. Scores
of 20 and above may be considered high, while
scores of 10 and below may be considered low.
Degree of comfort with cross-cultural diversity:Item 14 � Item 15 � Item 16 � Item 17
Diversity scores can range from 4 to 20. Scores
of 16 and above may be considered high, while
scores of 8 and below may be considered low.
High scores on two or more aspects of openness, with no low scores on any aspects, suggest strong
interest in and aptitude for international work.
Source: Based on P.M. Caligiuri, R.R. Jacobs, & J.L. Farr. 2000. “The Attitudinal and Behavioral Openness Scale: Scale
Development and Construct Validation,” International Journal of Intercultural Relations, 24: 27–46.
c03.indd 113c03.indd 113 12/08/10 10:45 AM12/08/10 10:45 AM
114 Chapter 3 Organizational Behavior in a Global Context
an organizational behavior moment
Managing in a Foreign Land
Spumonti, Inc., is a small manufacturer of furniture. The com-
pany was founded in 1987 by Joe Spumonti, who had been em-
ployed as a cabinetmaker in a large fi rm before he decided to open
his own shop in the town of Colorado Springs. He soon found
that some of his customers were interested in special furniture
that could be built to complement their cabinets. Joe found their
requests easy to accommodate. In fact, it wasn’t long before their
requests for custom furniture increased to the point that Joe no
longer had time to build cabinets.
Joe visited a banker, obtained a loan, and opened a larger
shop. He hired several craftspeople, purchased more equipment,
and obtained exclusive rights to manufacture a special line of
furniture. By 1997, the business had grown considerably. He
then expanded the shop by purchasing adjoining buildings and
converting them into production facilities. Because of the high
noise level, he also opened a sales and administrative offi ce several
blocks away, in the more exclusive downtown business district.
Morale was very good among all associates. The workers
often commented on Joe Spumonti’s dynamic enthusiasm, as he
shared his dreams and aspirations with them and made them feel
like members of a big but close-knit family. Associates viewed the
future with optimism and anticipated the growth of the com-
pany along with associated growth in their own responsibilities.
Although their pay was competitive with that provided by other
local businesses, it was not exceptional. Still, associates and others
in the community viewed jobs with Spumonti as prestigious and
desirable. The training, open sharing of information, and indi-
vidual autonomy were noteworthy.
By 2009, business volume had grown to the extent that Joe
found it necessary to hire a chief operating offi cer (COO) and to
incorporate the business. Although incorporation posed no prob-
lem, the COO did. Joe wanted someone well acquainted with
modern management techniques who could monitor internal op-
erations and help computerize many of the procedures. Although
he preferred to promote one of his loyal associates, none of them
seemed interested in management at that time. Ultimately, he
hired Wolfgang Schmidt, a visa holder from Germany who had
recently completed his MBA at a German university. Joe thought
Wolfgang was the most qualifi ed among the applicants, especially
with his experience in his family’s furniture company in Germany.
Almost immediately after Wolfgang was hired, Joe began to
spend most of his time on strategic planning and building exter-
nal relationships with key constituents. Joe had neglected these
functions for a long time and felt they demanded his immediate
attention. Wolfgang did not object to being left on his own be-
cause he was enthusiastic about his duties. It was his fi rst leader-
ship opportunity.
Wolfgang was more conservative in his approach than Joe
had been. He did not like to leave things to chance or to the
gut feel of the associates, so he tried to intervene in many deci-
sions the associates previously had been making for themselves. It
wasn’t that Wolfgang didn’t trust the associates; rather, he simply
felt the need to be in control. Nonetheless, his approach was not
popular.
Dissatisfaction soon spread to most associates in the shop,
who began to complain about lack of opportunity, noise, and low
pay. Morale was now poor, and productivity was low among all
associates. Absenteeism increased, and several longtime associates
expressed their intention to fi nd other jobs. Wolfgang’s approach
had not been successful, but he attributed its failure to the lack of
employee openness to new management methods. He suggested
to Joe that they give a pay raise to all associates “across the board”
to improve their morale and reestablish their commitment. The
pay raise would cost the company $120,000 annually, but Joe ap-
proved it as a necessary expense.
Morale and satisfaction did not improve, however. Shortly
after the pay raise was announced, two of Spumonti’s senior as-
sociates accepted jobs at other companies and announced their
resignations. Wolfgang was bewildered and was considering rec-
ommending a second pay increase.
Discussion Questions
1. What weaknesses do you see in Joe’s handling of Wolfgang?
2. Could Joe have anticipated Wolfgang’s approach?
3. Can Wolfgang’s career at Spumonti be saved?
team exercise
International Etiquette
A business traveler or expatriate must be aware of local customs governing punctuality, greetings,
introductions, gift-giving, dining behavior, and gestures. Customs vary dramatically around the
world, and what is accepted or even valued in one culture may be highly insulting in another. Many
c03.indd 114c03.indd 114 12/08/10 10:45 AM12/08/10 10:45 AM
Endnotes 115
business deals and relationships have been harmed by a lack of awareness. In the exercise that fol-
lows, your team will compete with other teams in a test of international etiquette.
STEP 1: As an individual, complete the following quiz by selecting T (True) or F (False) for
each item.
a. In Japan, slurping soup is considered bad manners.
b. In Italy, giving chrysanthemums is appropriate for a festive event.
c. In Ecuador, it is generally acceptable to be a few minutes late for a business meeting.
d. In England, the “V” sign formed with two fi ngers means victory when the palm faces outward
but is an ugly gesture if the palm is facing inward.
e. In China, a person’s surname is often given or written fi rst with the given name appearing after.
f. In Japan, shoes are generally not worn past the doorway of a home.
g. In Brazil, hugs among business associates are considered inappropriate.
h. In Germany, use of formal titles when addressing another person is very common.
i. In Saudi Arabia, crossing one’s legs in the typical style of U.S. men may cause problems.
j. In China, green hats are a symbol of achievement for men.
k. In China, a gift wrapped in red paper or enclosed in a red box is appropriate for celebrating a
successful negotiation.
l. In Kuwait, an invitation to a pig roast would be warmly received.
m. In India, a leather organizer would be warmly received as a gift.
n. In Japan, it is most appropriate to give a gift with two hands.
o. In Iraq, passing a bowl or plate with the left hand is appropriate.
p. In Saudi Arabia, ignoring a woman encountered in a public place is insulting to the woman’s
family.
STEP 2: Assemble into groups of four to fi ve, using the assignments or guidelines provided by the
instructor.
STEP 3: Discuss the quiz as a group, and develop a set of answers for the group as a whole.
STEP 4: Complete the scoring form that follows using the answer key provided by your instructor.
Number of answers that I had correct: ________
Average number of answers that individuals in the group had correct: ________
Number of answers that the group had correct following its discussion: ________
International mastery: 13–15 correct
International competence: 9–12 correct
International defi ciency: 5–8 correct
International danger: 1–4 correct
STEP 5: Designate a spokesperson to report your group’s overall score and to explain the logic or
information used by the group in arriving at wrong answers.
TF
TF
TF
TF
TF
TF
TF
TF
TF
TF
TF
TF
TF
TF
TF
TF
Endnotes
1. Dastidar, P. 2009. International corporate diversifi cation and per-
formance: Does fi rm self-selection matter? Journal of International
Business Studies, 40: 71–85; Gande, A., Schenzler, C. & Senbet,
L.W. 2009. Valuation of global diversifi cation. Journal of Interna-
tional Business Studies, 40: 1515–1532; Makino, S., Isobe, T., &
Chan, C.M. 2005. Does country matter? Strategic Management
Journal, 25: 1027–1043.
2. Bouquet, C, Morrison, A., & Birkinshaw, J. 2009. International
attention and multinational enterprise performance. Journal of
International Business Studies, 40: 108–131.
3. Loveman, G., Schlesinger, L., & Anthony, R. 1993. Euro Disney:
The fi rst 100 days. Boston: Harvard Business School Publishing.
4. Ibid.
c03.indd 115c03.indd 115 12/08/10 10:45 AM12/08/10 10:45 AM
116 Chapter 3 Organizational Behavior in a Global Context
5. Hitt, M.A., Ireland, R.D., & Hoskisson, R.E. 2011. Strategic
management: Competitiveness and globalization (9th ed.). Mason,
OH: South-Western Cengage Learning.
6. United Nations Conference on Trade and Development. 2008.
World Investment Report, New York, U.S.A.; United Nations Con-
ference on Trade and Development. 2009. World Investment Re-
port, New York, U.S.A.
7. United Nations Conference on Trade and Development. 2010.
World Investment Report, New York, U.S.A.
8. World Trade Organization. 2009. World Trade Report 2009. Ge-
neva, Switzerland.
9. Hitt, M.A. & He, X. 2008. Firm strategies in a changing global
competitive landscape. Business Horizons, 51: 363–369.
10. World Investment Report, 2005. Transnational corporations and
the internationalization of R&D. Geneva, Switzerland: United
Nations Conference on Trade and Development (UNTAD).
11. Wiersema, M.E. & Bowen, H.P. Corporate diversifi cation: The
impact of foreign competition, industry globalization and prod-
uct diversifi cation. Strategic Management Journal, 29: 115–132;
Malik, O.R. & Kotabe, M. 2009. Dynamic capabilities, govern-
ment policies and performance in fi rms from emerging econo-
mies: Evidence from India and Pakistan. Journal of Management
Studies, 46:421–450.
12. Hitt, Ireland, & Hoskisson, Strategic management.
13. For a discussion of this issue, see Asgary, N., & Walle, A.H. 2002.
The cultural impact of globalization: Economic activity and so-
cial change. Cross Cultural Management, 9(3): 58–75; Holton, R.
2000. Globalization’s cultural consequences. The Annals of the
American Academy of Political and Social Science, 570: 140–152;
Zhelezniak, O. 2003. Japanese culture and globalization. Far
Eastern Affairs, 31(2): 114–120.
14. Hall, P.A. & Soskice, D. 2001. An introduction to the varieties of
capitalism. In P. A. Hall & D. Soskice (Eds.), Varieties of capital-
ism: The institutional foundations of comparative advantage. Ox-
ford, UK: Oxford University Press, 1–68; Hall, E.T. 1976.Beyond
culture. New York: Anchor Books–Doubleday.
15. Sheth, J.N. 2006. Clash of cultures or fusion of cultures? Implica-
tions for international business. Journal of International Manage-
ment, 12: 218–221; Gong, W. 2009. National culture and global
diffusion of business-to-consumer e-commerce. Cross Cultural
Management, 16: 83–101.
16. Asgary & Walle, The cultural impact of globalization.
17. Friedman, T.L. 2005. The world is fl at. New York: Farrar, Straus
and Giroux.
18. Towsend, J.D., Yeniyurt, S., & Talay, M.B. 2009. Getting to
global: An evolutionary perspective of brand expansion in in-
ternational markets. Journal of International Business Studies, 40:
539–558.
19. Hitt, Ireland & Hoskisson, Strategic management.
20. Ibid.; Hitt, M.A., Tihanyi, L., Miller, T., & Connelly, B. 2006.
International diversifi cation: Antecedents, outcomes and mod-
erators. Journal of Management, 32: 831–867; Bruton, G.D.,
Ahlstrom, D., & Puky, T. 2009. Institutional differences and the
development of entrepreneurial ventures: A comparison of the
venture capital industries in Latin America and Asia. Journal of
International Business Studies, 40:762–778.
21. Meyer, K. 2006. Global focusing: From domestic conglomerates
to global specialists. Journal of Management Studies, 43: 1109–
1144.
22. Sapienza, H.J., Autio, E., George, G., & Zahra, S. 2006. A ca-
pabilities perspective on the effects of early internationalization
on fi rm survival and growth. Academy of Management Review,
31: 914–933; Madhaven, R. & Iriyama, A. 2009. Understanding
global fl ows of venture capital: Human networks as the carrier
wave of globalization. Journal of International Business Studies, 40:
1241–1259.
23. Hitt, M.A., Franklin, V., & Zhu, H. 2006. Culture, institutions
and international strategy. Journal of International Management,
12: 222–234
24. Hitt, Ireland, & Hoskisson, Strategic management
25. Xia, J., Boal, K., Delios, A. 2009. When experience meets na-
tional institutional environmental change: Foreign entry attempts
of U.S. fi rms in the central and Eastern European region. Strategic
Management Journal, 30: 1286–1309.
26. Lin, Z, Peng, M.W., Yang, H. & Sun, S.L. 2009. How do net-
works and learning drive M&As? An institutional comparison be-
tween China and the United States. Strategic Management Journal,
30: 1113–1132.
27. Estrin, S., Baghdasaryan, D. & Meyer, K.E. 2009. The impact of
institutional and human resource distance on international entry
strategies. Journal of Management Studies, 461171–1196.
28. Chung, W. & Yeaple, S. 2008. International knowledge sourcing:
Evidence from U.S. fi rms expanding abroad. Strategic Manage-
ment Journal, 29: 1207–1224.
29. Shapiro, D.L., Furst, S.A., Spreitzer, G.M., & Von Glinow, M.A.
2002. Transnational teams in the electronic age: Are team identity
and high performance at risk? Journal of Organizational Behavior,
23: 455–467.
30. Cohen, S.G., & Gibson, C.B. 2003. In the beginning: Intro-
duction and framework. In C.B. Gibson & S.G. Cohen (Eds.),
Virtual teams that work: Creating conditions for virtual team
effectiveness. San Francisco: Jossey-Bass.
31. Gibson, C.B., & Manuel, J.A. 2003. Building trust: Effective
multicultural communication processes in virtual teams. In Gib-
son & Cohen (Eds.), Virtual teams that work.
32. Kim, P.H., Dirks, K.T., & Cooper, C.D. 2009.The repair of trust:
A dynamic bilateral perspective and multilevel conceptualization.
Academy of Management Review, 34: 401–422.
33. Shin, Y. 2004. A person–environment fi t model for virtual or-
ganizations. Journal of Management, 30: 725–743. Also see:
Grabowski, M., & Roberts, K.H. 1999. Risk mitigation in virtual
organizations. Organization Science, 10: 704–721; Jarvenpaa, S.L.,
& Leidner, D.E. 1999. Communication and trust in global virtual
teams. Organization Science, 10: 791–815; Kasper-Fuehrer, E.C.,
& Ashkanasy, N.M. 2001. Communicating trustworthiness and
building trust in interorganizational virtual organizations. Journal
of Management, 27: 235–254; Raghuram, S., Garud, R., Wiesen-
feld, B., & Gupta, V. 2001. Factors contributing to virtual work
adjustment. Journal of Management, 27: 383–405.
34. Shin, A person–environment fi t model for virtual organizations.
35. Jarvenpaa & Leidner, Communication and trust in global virtual
teams.
c03.indd 116c03.indd 116 12/08/10 10:45 AM12/08/10 10:45 AM
Endnotes 117
36. Chua, R.Y.J., Morris, M.W., & Ingram, P. 2009. Guanxi vs
networking: Distinctive confi gurations of affect- and cognition-
based trust in the networks of Chinese vs American managers.
Journal of international Business Studies, 40: 490–508.
37. Blackburn, R.S., Furst, S.A., & Rosen, B. 2003. Building a win-
ning virtual team: KSAs, selection, training, and evaluation. In
Gibson & Cohen (Eds.), Virtual teams that work; Shapiro, Furst,
Spreitzer, & Von Glinow, Transnational teams in the electronic age.
38. Weiss, S.E. 1994. Negotiating with “Romans”—Part 2. Sloan
Management Review, 35(3): 85–99.
39. Blackburn, Furst, & Rosen, Building a winning virtual team.
40. Shapiro, Furst, Spreitzer, & Von Glinow, Transnational teams in
the electronic age.
41. Cramton, C.D., & Webber, S.S. 2002. The impact of virtual
design on the processes and effectiveness of information technology
work teams. Fairfax, VA: George Washington University.
42. Blackburn, Furst, & Rosen, Building a winning virtual team.
43. Shin, A person–environment fi t model for virtual organizations.
44. Brock, D.M., Shenkar, O., Shoham, A., & Siscovick, I.C. Na-
tional culture and expatriate deployment, Journal of International
Business Studies, 39: 1293–1309.
45. Li, S. & Scullion, H. 2006. Bridging the distance: Managing
cross-border knowledge holders. Asia Pacifi c Journal of Manage-
ment, 23: 71–92; Nielsen, B.B. and Nelson, S. 2009. Learning
andinnovation in international strategic alliances: An empirical
test of the role of trust and tacitness. Journal of Management Stud-
ies, 46: 1031–1056.
46. Reiche, B.S., Harzing, A.-W. & Kraimer, M.L. 2009. The role of
international assignees’ social capital in creating inter-unit intel-
lectual capital: A cross-level model. Journal of International Busi-
ness Studies, 40: 509–526.
47. Tan, D., & Mahoney, J. T. 2006. Why a multinational fi rm
chooses expatriates: Integrating resource-based, agency and trans-
action costs perspectives. Journal of Management Studies, 43: 457–
484; Brannen, M.Y., & Peterson, M.F. 2009. Merging without
alienating: Interventions promoting cross-cultural organizational
integration and their limitations. Journal of International Business
Studies, 40: 468–489.
48. Andreason, A.W. 2003. Direct and indirect forms of in-country
support for expatriates and their families as a means of reducing
premature returns and improving job performance. International
Journal of Management, 20: 548–555; McCall, M.W., & Hollen-
beck, G.P. 2002. Global fatalities: When international executives
derail. Ivey Business Journal, 66(5): 74–78.
49. Black, J.S., & Gregersen, H.B. 1991. The other half of the pic-
ture: Antecedents of spouse cross-cultural adjustment. Journal
of International Business Studies, 3: 461–478; Sims, R.H., &
Schraeder, M. 2004. An examination of salient factors affecting
expatriate culture shock. Journal of Business and Management, 10:
73–87
50. See, for example: Andreason, Direct and indirect forms of in-
country support for expatriates and their families as a means of re-
ducing premature returns and improving job performance; Tung,
R. 1982. Selection and training procedures of U.S., European,
and Japanese multinationals. California Management Review,
25(1): 57–71.
51. Shaffer, M.A., & Harrison, D.A. 2001. Forgotten partners of
international assignments: Development and test of a model of
spouse adjustment. Journal of Applied Psychology, 86: 238–254.
52. Rothausen, T.J. 2009. Management work-family research and
work-family fi t. Family Business Review, 22: 220–234.
53. Gouttefarde, C. 1992. Host national culture shock: What man-
agement can do. European Management Review, 92(4): 1–3.
54. Andreason, Direct and indirect forms of in-country support for
expatriates and their families as a means of reducing premature
returns and improving job performance; Caligiuri, P.M. 2002.
The big fi ve personality characteristics as predictors of expatriate’s
desire to terminate the assignment and supervisor-rated perform-
ance. Personnel Psychology, 53: 67–98; McCall & Hollenbeck,
Global fatalities; Sims & Schraeder, An examination of salient
factors affecting expatriate culture shock.
55. For a recent information company training in cross-cultural envi-
ronments see: Beck, N., Labst, R., & Walgenbach, P. 2009. The
cultural dependence of vocational training. Journal of Interna-
tional Business Studies, 40: 1374–1395.
56. Frazee, V. 1999. Culture and language training: Send your expats
prepared for success. Workforce, 4(2): 6–11.
57. Aperian Global, 2007. Global assignment services. At http://
www.aperianglobal.com/practice_areas_global_assignment_
services. asp.
58. Sims & Schraeder, An examination of salient factors affecting ex-
patriate culture shock.
59. Furuya, N., Stevens, M.J., Bird, A., Oddou, G., & Mendenhall,
M. 2009. Managing the learning and transfer of global manage-
ment competence: Antecedents and outcomes of Japanese repa-
triation effectiveness. Journal of International Business Studies, 40:
200–215.
60. Oddou, G., Osland, J.S. & Blakeney, R.N. 2009. Repatriating
knowledge: Variables infl uencing the “transfer” process. Jour-
nal of International Business Studies, 40: 181–199. Black, J.S.,
& Gregersen, H. 1999. The right way to manage expatriates.
Harvard Business Review, 77(2): 52–63; Paik, Y., Segaud, B., &
Malinowski, C. 2002. How to improve repatriation manage-
ment: Are motivations and expectations congruent between the
company and expatriates? International Journal of Manpower, 23:
635–648; Stroh, L., Gregersen, H., & Black, S. 1998. Closing
the gap: Expectations versus reality among repatriates. Journal of
World Business, 33: 111–124.
61. Fisher, C.M. 2002. Increase in female expatriates raises dual-
career concerns. Benefi ts & Compensation International, 32(1): 73.
62. Janssens, M., Cappellen, T., & Zanoni, P. 2006. Successful female
expatriates as agents: Positioning oneself through gender, hierar-
chy and culture. Journal of World Business, 41: 133–148.
63. Manning, S., Massini, S., & Lewin, A.Y. 2008. A dynamic per-
spective on next-generation offshoring: The global sourcing of sci-
ence and engineering talent. Academy of ManagementPerspectives,
22(3): 35–54; Farrell, D., Laboissiere, M.A., & Rosenfeld, J.
2006. Sizing the emerging global labor market: Rational behavior
from both companies and countries can help it work. Academy of
Management Perspectives, 20 (4): 23–34.
64. Anonymous. 2003. College careers: Pride in diversity. At http://
www.microsoft.com/college/diversity/jose.asp.
c03.indd 117c03.indd 117 12/08/10 10:45 AM12/08/10 10:45 AM
http://www.aperianglobal.com/practice_areas_global_assignment_services.asp
http://www.aperianglobal.com/practice_areas_global_assignment_services.asp
http://www.aperianglobal.com/practice_areas_global_assignment_services.asp
http://www.microsoft.com/college/diversity/jose.asp
http://www.microsoft.com/college/diversity/jose.asp
118 Chapter 3 Organizational Behavior in a Global Context
65. Microsoft Corporations. 2007. Pride in diversity: Diversity &
employee groups. At http://members.microsoft.com/careers/
mslife/diversepride/employeegroups.mspx.
66. Rothhausen, T.J., Gonzales, J.A., & Griffi n, A.E.C. 2009. Are all
the parts there everywhere? Facet job satisfaction in the United
States and the Philippines. Asia Pacifi c Journal of Management, 26:
681–700.
67. Tomlinson, F., & Egan, S. 2002. Organizational sensemaking in
a culturally diverse setting: Limits to the “valuing diversity” dis-
course. Management Learning, 33: 79–98.
68. Hall, Beyond culture.
69. Fitzgerald, M. 2007. Can you ace this test? A new exam forces
managers to prove their mettle. Fast Company, February: 27.
70. Katsikeas, C.S., Skarmeas, D., & Bello, D.C. 2009. Developing
successful trust-based international exchange relationships. Jour-
nal of International Business Studies, 40: 132–155.
71. Munter, M. 1993. Cross-cultural communication for managers.
Business Horizons, 36(3): 69–78.
72. Hall, E.T. 1983. The dance of life: The other dimension of time.
New York: Anchor Books.
73. Bluedorn, A.C., Felker, C., & Lane, P.M. 1992. How many
things do you like to do at once? An introduction to monochronic
and polychronic time. Academy of Management Executive, 6(4):
17–26; Wessel, R. 2003. Is there time to slow down? As the world
speeds up, how cultures defi ne the elastic nature of time may af-
fect our environmental health. Christian Science Monitor, January
9: 13.
74. Bluedorn, Felker, & Lane. 1992. How many things do you like to
do at once? Wessel, Is there time to slow down?
75. Earley, P.C., & Ang, S. 2003. Cultural intelligence: Individual
interactions across cultures. Stanford, CA: Stanford University
Press.
76. Williamson, I.O., Burnett, M.F. & Bartol, K.M. 2009. The inter-
active effect of collectivism and organizational rewards on affec-
tive organizational commitment. Cross Cultural Management, 16:
28–43.
77. Zhou, K.Z., Li, J.J., Zhou, N., & Su, C. 2008. Market orienta-
tion, job satisfaction, product quality and fi rm performance: Evi-
dence from China. Strategic Management Journal, 29: 985–1000.
78. Bartlett, C.A., & Ghoshal, S. 1998. Managing across borders: The
transnational solution (2nd ed.). Boston: Harvard Business School
Press; Harzing, A.-W. 2000. An empirical analysis and extension
of the Bartlett and Ghoshal typology of multinational companies.
Journal of International Business Studies, 31: 101–120; Hitt, Ire-
land, & Hoskisson, Strategic management.
79. Unilever N.V./Unilever PLC. 2007. About Unilever. At http://
www.unilever.com/ourcompany/aboutunilever/introducinguni-
lever/asp.
80. Li, L. 2005. Is regional strategy more effective than global strategy
in the U.S. service industries? Management International Review,
45: 37–57; Harzing, An empirical analysis and extension of the
Bartlett and Ghoshal typology of multinational companies.
81. Harzing, A.-W., & Nooderhaven, N. 2006. Geographical dis-
tance and the role and management of subsidiaries: The case of
subsidiaries down-under. Asia Pacifi c Journal of Management, 23:
167–185; Capron, L., & Guillen, M. 2009. National corporate
governance institutions and post-acquisition target reorganiza-
tion. Strategic Management Journal, 30: 803–833.
82. Bartlett & Ghoshal, Managing across borders: The transnational
solution; Harzing, An empirical analysis and extension of the
Bartlett and Ghoshal typology of multinational companies; Hitt,
Ireland, & Hoskisson, Strategic management.
83. This is Cemex. 2009. Cemex web site. At http://www.cemex.
com/tc/tc_lp.asp, December.
84. Zellmer-Bruhn, M., & Gibson, C. 2006. Multinational organi-
zation context: Implications for team learning and performance.
Academy of Management Journal, 49: 501–518; Zhang, Y., Dol an,
S., Lingham, T., & Altman, Y. 2009. International strategic
human resource management: A comparative case analysis of
Spanish fi rms in China. Management and Organization Review, 5:
195–222.
85. Bartlett & Ghoshal, Managing across borders: The transnational
solution; Harzing, An empirical analysis and extension of the
Bartlett and Ghoshal typology of multinational companies; Hitt,
Ireland, & Hoskisson, Strategic management.
86. Ibarra, H., & Sackley, N. 1995. Charlotte Beers at Ogilvy &
Mather Worldwide. Boston: Harvard Business School Publishing.
87. Ogilvy & Mather. 2009. Company information. At http://www.
ogilvy.com/company.
88. Bentley, S. 1997. Big agencies profi t from global tactics. Market-
ing Week, 19(43): 25–26.
89. Ogilvy & Mather. 2009. About OgilvyAction. At http://www.
ogilvy.com/#/About/Network/OgilvyAction.aspx, December.
90. Birkinshaw, J., Braunerhjelm, P., & Holm, U. 2006. Why some
multinational corporations relocate their headquarters overseas.
Strategic Management Journal, 27: 681–700.
91. See, for example, Zatzick, C.D., & Iverson, R.D. 2006. High-
involvement and workforce reduction: Competitive advan-
tage or disadvantage? Academy of Management Journal, 49:
999–1015.
92. MacDuffi e, J.P. 1995. Human resource bundles and manufactur-
ing performance: Organizational logic and fl exible production
systems. Industrial and Labor Relations Review, 48: 197–221.
93. Guthrie, J.P. 2001. High-involvement work practices, turn-
over, and productivity: Evidence from New Zealand. Academy of
Management Journal, 44: 180–190.
94. Black, B. 1999. National culture and high commitment manage-
ment. Employee Management, 21: 389–404.
95. Huang, X., Shi, K., Zhang, Z., & Cheung, Y.L. 2006. The impact
of participative leadership behavior on psychological empower-
ment and organizational commitment in Chinese state-owned
enterprises: The moderating role of organizational tenure. Asia
Pacifi c Journal of Management, 23: 345–367.
96. Benito, G.R.G., Petersen, B., & Welch, L.S. 2009. Towards more
realistic conceptualizations of foreign operation modes. Journal of
International Business Studies, 40: 1455–1470.
97. House, R., Javidan, M., Hanges, P., & Dorfman, P. 2002. Un-
derstanding cultures and implicit leadership theories across the
globe: An introduction to project GLOBE. Journal of World
Business, 37: 3–10; Javidan, M., & House, R.J. 2001. Cultural
acumen for the global manager: Lessons from Project GLOBE.
Organizational Dynamics, 29: 289–305.
c03.indd 118c03.indd 118 12/08/10 10:45 AM12/08/10 10:45 AM
http://members.microsoft.com/careers/mslife/diversepride/employeegroups.mspx
http://members.microsoft.com/careers/mslife/diversepride/employeegroups.mspx
http://www.unilever.com/ourcompany/aboutunilever/introducinguni-lever/asp
http://www.unilever.com/ourcompany/aboutunilever/introducinguni-lever/asp
http://www.unilever.com/ourcompany/aboutunilever/introducinguni-lever/asp
http://www.cemex.com/tc/tc_lp.asp
http://www.cemex.com/tc/tc_lp.asp
http://www.ogilvy.com/company
http://www.ogilvy.com/company
http://www.ogilvy.com/#/About/Network/OgilvyAction.aspx
http://www.ogilvy.com/#/About/Network/OgilvyAction.aspx
Endnotes 119
98. Hofstede, G. 1984. Culture’s consequences: International differences
in work-related values (abridged edition). Beverly Hills, CA: Sage
Publications.
99. Witt, M.A., & Redding, G. 2009. Culture, meaning and institu-
tions: Executive rationale in Germany and Japan. Journal of Inter-
national Business Studies, 40: 859–885.
100. Leung. K., Bhagat, R.S., Buchan, N.R., Erez, M., & Gibson,
C.B. 2005. Culture and international business: Recent advances
and their implications for future research. Journal of International
Business Studies, 36: 357–378.
101. Rothaermel, F.T., Kotha, S., & Steensma, H.K. 2006. Interna-
tional market entry by U.S. Internet fi rms: An empirical analy-
sis of country risk, national culture and market size. Journal of
Management, 32: 56–82; Bhaskaran, S., & Gligorovska, E. 2009.
Infl uence of national culture on transnational alliance relation-
ships. Cross Cultural Management, 16: 44–61.
102. Zaheer, S., & Zaheer, A. 2006. Trust across borders. Journal of
International Business Studies, 37: 21–29.
103. Randolph, W.A., & Sashkin, M. 2002. Can organizational em-
powerment work in multinational settings? Academy of Manage-
ment Executive, 16: 112–115.
104. Michailova, S., & Hutchings, K. 2006. National cultural infl u-
ences on knowledge sharing: A comparison of China and Russia.
Journal of Management Studies, 43: 383–405; Wong, A., & Tjos-
vold, D. 2006. Collectivist values for learning in organizational
relationships in China: The role of trust and vertical coordina-
tion. Asia Pacifi c Journal of Management, 23: 299–317.
105. van der Vegt, G.S., van de Vliert, E., & Huang, X. 2005. Loca-
tion-level links between diversity and innovative climate depend
on national power distance. Academy of Management Journal, 48:
1171–1182.
106. Newburry, W., & Yakova, N. 2006. Standardization preferences:
A function of national culture, work interdependence and lo-
cal embeddedness. Journal of International Business Studies, 37:
44–60.
107. AES Company home page, 2009, at http://www.aes.com/aes/
index?page=home, December; Hamilton, M.M. 2003. AES’s
new power structure: Struggling utility overhauls corporate (lack
of ) structure. The Washington Post, June 2, E1; McMillan, J., &
Dosunmu, A. 2002. Nigeria. Palo Alto, CA: Stanford Gradu-
ate School of Business; O’Reilly, C.A., & Pfeffer, J. 2000. Hid-
den value: How great companies achieve extraordinary results with
ordinary people. Boston: Harvard Business School Press.
108. Hooker, J. 2009. Corruption from a cross-cultural perspective.
Cross Cultural Management, 16: 251–267.
109. Rodriguez, P., Siegel, D.S., Hillman, A., & Eden, L. 2006. Three
lenses on the multinational enterprise: Politics, corruption, and
corporate social responsibility. Journal of International Business
Studies, 37: 733–746; Meschi, P.-X. 2009. Government corrup-
tion and foreign stakes in international joint ventures in emerging
economies. Asia Pacifi c Journal of Management, 26: 241–261.
110. Davids, M. 1999. Global standards, local problems. The Journal
of Business Strategy, 20: 38–43.
111. Sanyal, R. 2009. The propensity to bribe in internationalbusiness:
The relevance of cultural variables. Cross Cultural Management,
16: 287–300.
112. Davids, Global standards, local problems.
113. Cuervo-Cazurra, A. 2006. Who cares about corruption? Journal
of International Business Studies, 37: 807–822; Ralston, D.A.,
Egri, C.P., Garcia Carranza, M.T., Ramburuth, P., et al., 2009.
Ethical preferences for infl uencing superiors: A 41-society study.
Journal of International Business Studies, 40: 1022–1045.
c03.indd 119c03.indd 119 12/08/10 10:45 AM12/08/10 10:45 AM
http://www.aes.com/aes/index?page=home
http://www.aes.com/aes/index?page=home
This page intentionally left blank
PA R TIC A S ES T U D Y
1. SITUATION: THE PROJECT IS
DOMINATED BY GERMANS
The American perspective
Introduction
Two months ago I was sent by my
company from our Philadelphia head-
quarters to Stuttgart in order to pre-
pare the launch of a new product on
the European market. The product, a
laser for eye surgery, was developed
by a joint venture between us and
our German partner. Even though the
joint venture belongs in equal shares
to both companies it was agreed that
our German partner would take the
lead in introducing the product on
the European market and that we
COOPERATING AND
communicating
across cultures
Americans and Germans
Working in a Project Team
Markus Pudelko
University of Edinburgh Management School
T
his case was written by Dr Markus
Pudelko, The University of Edinburgh
Management School. It is intended to
be used as the basis for class discussion rather
than to illustrate either effective or ineffective
handling of a management situation. The case
was compiled from generalized experience and
on relevant literature, in particular Schroll-Machl,
S. (1996) ‘Kulturbedingte Unterschiede im Prob-
lemlösungsprozeß beideutsch-amerikanischen
Arbeitsgruppen’, in Thomas, A. (ed) Psychologie
interkulturellen Handelns,
Göttingen et al: Hogrefe,
383–409).
Reference no 406-034-1.
© 2006, The University of Edinburgh. No part of this publication may be copied,
stored, transmitted, reproduced or distributed in any form or medium whatsoever with-
out the permission of the copyright owner.
case01.indd 121case01.indd 121 12/08/10 10:41 AM12/08/10 10:41 AM
PA R TIC A S ES T U D Y
122Cooperating and Communicating Across Cultures
would have the say for launching
the product in North America. For all
other regions both partners agreed
to work in tandem.
So I was selected to represent
our company on what was otherwise
a German team. Even though I had
never worked in Germany before,
I was considered to be the natural
candidate for the assignment: I speak
fluent German as my wife is Ger-
man. In addition, I thought I was also
culturally quite well prepared for the
job. Next to speaking the language
and having gotten used to putting up
with my wife’s tick for over-punctu-
ality, I also regularly travel to Ger-
many to visit my wife’s family. Also, I
have had frequent e-mail exchanges
and telephone conversations with
our German partners. But now, after
two months working around the clock
with my German team colleagues, I
realize how difficult it has been for
me to cooperate and communicate
effectively with them. Our project of
preparing the launch of our new la-
ser is finished now and in the end
we did a good job, but it was very
tough and certainly not without fric-
tions. Now I am happy and relieved
to be returning to the States.
Planning phase
The problems already started with
our first meeting. We were sup-
posed to define our key objectives,
our main challenges and our overall
strategy. I was expecting something
like a brainstorming session, in or-
der to develop some general ideas
and solutions, select the best ones,
develop a plan and delegate specific
tasks to the project team members.
I anticipated this meeting to last for
one morning or so. Instead, we sat
there for three full days. All details
were discussed at great length, but
no concrete decisions were taken,
no real plan was developed and no
clear-cut objectives were formulated.
The Germans love to see themselves
as “Volk der Dichter und Denker”
(people of poets and thinkers), but
we don’t have to endlessly dispute
everything and act like a bunch of
little Immanuel Kants in order to get
a laser on the market! In the begin-
ning, I patiently sat there, joined the
discussion and thought it best to just
go with the flow. On the second day,
however, I became increasingly im-
patient and suggested several times
to focus on what we should do now
and then start working. But I was
only looked at with amazement and
was told that this was still much too
early for any specific plan and so
our philosophy seminar continued.
Much of the third day of the debate
I hardly bothered to pay attention
anymore.
At the end of day three we fi-
nally came up with a decision of
where to go from there, but I still was
not content. We had wasted a lot of
time to achieve so little. This was all
very inefficient. How would we ever
get the project finished if we contin-
ued like this? And moreover, I still
did not have a precise idea of what
I was supposed to do now. My Ger-
man team members had discussed
all issues at great length and from
every possible perspective and devel-
oped a fantastic picture of the overall
problem, but spent little time on spell-
ing out our next activities. Many de-
tails which were relevant to our tasks
were mentioned in our lengthy discus-
sions but were never systematically
summarized on a chart. How could I
remember everything which was said
during a three day long discussion?
Furthermore, we came up with over-
all objectives to achieve, but never
specified any broken down targets.
How can we effectively work with-
out having specific targets by which
we can measure our progress and
our performance along the way? An
overall objective is just not provid-
ing enough guidance. To summarize,
the Germans are obsessed with their
focus on the problem, whereas we
Americans focus more on solutions.
Working under the team leader
I would have expected my German
team leader to be much more deci-
sive. He was the boss, so he should
have called the shots. But no, in par-
ticular during the planning phase he
consistently asked his team members
what they were thinking, was patiently
listening to everyone and acted more
like just another team member. For a
while I would have listened to every-
one’s opinion, but then I would just
have made my mind up, announced
my decision, delegated the tasks and
controlled the outcome.
I also got particularly annoyed
that the team leader frequently inter-
fered in my work. He kept insisting
that I had to double-check every lit-
tle detail before I pass it on to other
teammembers. I don’t like to be con-
trolled all the time, I know what I am
doing. At the end of the assignment I
am happy to get evaluated on my per-
formance, but until then I prefer to be
left alone, so that I can do my job. My
team leader also constantly reminded
me to observe certainprocedural rules
of which the company seemed to have
an endless amount. It seemed to me
case01.indd 122case01.indd 122 12/08/10 10:41 AM12/08/10 10:41 AM
123Cooperating and Communicating Across Cultures
PA R TIC A S ES T U D Y
that theyfollowed their internal proce-
dural rules for the sake of it. It is like
the red traffic lights. NoGerman
pedestrian crosses the street on red,
even if no car is in sight for miles.
Another thing, I thought our team
leader was a poor motivator. Instead
of pushing people, making them ex-
cited about the job and provide them
with encouraging feedback, our team
leader was always very reserved, for-
mal and fact oriented. No emotions
ever came across. Sometimes a pat
on the shoulder wouldn’t do any harm.
Working with the team members
Not only had I no clear understand-
ing of what I was supposed to do
when we started our assignments, I
also didn’t have a good understand-
ing of what my German colleagues
were working on. And there was lit-
tle exchange of information among
us. I am used to working sequentially
on a clear set of well broken down
targets and at every step of the way
getting the information I need from
my colleagues. However, whenever I
went over to my team members and
asked them a specific question, they
did answer me politely, but I had the
impression they felt disturbed by me
asking them questions. Everyone just
worked on his or her own.
Furthermore, I was deliberately
brought in to share my specific know-
how with the Germans. But when
we started working on our assign-
ments no one came to see me and
asked me for advice. They probably
thought they knew everything better
and didn’t need my expertise. But
then why did they want an expert
from the States on their team?
I was also puzzled by how
badly my German counterparts
reacted when I suggested some
changes in our strategy. Whenever
we hit a problem, it seemed natural
for me to adapt our strategy, after
all one cannot foresee everything
at first and one needs to keep an
open mind and remain flexible. It is
through trial and error that objectives
are reached. But no, we had to stick
to our grand master-plan, because so
much time was invested in reaching
it in the first place.
The German perspective
Introduction
For two months we had Jim, a mar-
keting expert from our joint venture
partner in the States, here in Stutt-
gart. His job was to help us in
preparing the launch of our new
laser on the European market. He
was certainly well qualified for the
job and also a really nice guy. He
even spoke fluent German. That fa-
cilitated our job greatly. Otherwise
it would have been quite odd, on
a team with 16 Germans and one
American, to speak English all the
time. It’s not so much of a problem
during a formal meeting, when eve-
ryone listens to what the one speak-
ing has to say. But what about a
more informal setting, over lunch for
example? If the American is listen-
ing, it’s fine to talk in English, but if
he directs his attention to someone
else, should I then continue talking
in English with my other German col-
leagues, as he might want to enter
our conversation again? It is com-
pletely awkward to talk among Ger-
mans in English, searching for words
for what you could otherwise express
so easily in your own language.
Also, to adapt to the Anglo-Saxon
style and not look overly formal, we
use first names when speaking in
English. But it is very embarrassing
to call my boss “Hans” when talk-
ing in English and then switch right
away to “Herr Doktor Fischer” when
speaking German again. In the end,
with English entering our company
communication more and more, we
even tend to avoid addressing by
name colleagues we have known
for years, out of pure confusion over
what to say. Therefore, we were re-
ally relieved when we heard that our
American colleague was speaking
German, it saved us from a lot of
potentially embarrassing situations.
But, as we found out, mastering the
language is one thing, being able to
truly communicate is a completely dif-
ferent story. I think Jim had no clue of
how we do things here and he was
little willing to adapt, always thinking
that the American way is the only
one which makes sense.
Planning phase
First, all members of a newly estab-
lished team gather all relevant infor-
mation and discuss them intensively.
The objective is to reach a holistic
understanding of the problems to
be solved. During this phase team
leader and team members cooper-
ate on quite equal terms. The team
leader is more the moderator of this
thought process. Our deliberations
are rather complex and abstract,
with the intention to establish an
overall conceptual foundation that
covers all possible eventualities, as-
sumptions and ramifications which
lead to a set of logical conclusions.
In this process we focus on the under-
lying principles but already include
all potentially relevant details to get
to the bottom of our problem. From
case01.indd 123case01.indd 123 12/08/10 10:41 AM12/08/10 10:41 AM
PA R TIC A S ES T U D Y
124Cooperating and Communicating Across Cultures
the multitude of information and
ideas we subsequently generate the
solution to our problem. By doing so,
we frequently recur to theories and
scholarly methods. Subsequently,
the group decides which tasks need
to be tackled in order to reach the
overall objective. It is expected that
every team member brings his or
her expertise and thoughts into this
discussion process. The decisions to
be reached should be based on a
general consensus, be supported by
everyone and be regarded as final.
The decisions taken at this meeting
will direct all ensuing activities. This
process might take some time in the
beginning, but in the end it might
well save us time as we don’t need
to go back to the drawing board
anymore. Unfortunately, Jim didn’t
understand this concept at all. We
tried to encourage him to share with
us his perspective on our project. In
fact, we specifically asked for an
American expert who could share
with us the experiences won on the
American market, but he just didn’t
come forward with his knowledge.
We found this particularly unhelpful.
Instead, he always tried to push us
prematurely to break up the work
into individual assignments, but at
this initial phase we barely started to
grasp the problem we were facing.
How are we supposed to break our
work down into assignments if we
collectively still don’t fully understand
what we are trying to achieve? After
some time he even stopped paying
full attention to our deliberations. But
once we fully understood the prob-
lem, developed our strategy and sub-
sequently started working we noticed
that Jim just had not grasped the
concept which was the basis of our
work. Typical American: no willing-
ness to invest time in the beginning
to thoroughly understand a problem,
just focusing on setting some superfi-
cial targets and then seeing later on
how one gets along and muddling
your way through. We prefer to do
things a lot more methodically.
Working under the team leader
Once we reached an agreement
about what to do, all the team
members started working on their
assignments. They had a good under-
standing of our overall objective and
how we wanted to achieve this. We
had discussed all eventualities during
the planning phase, so everyone had
all the information which was needed
and was now ready to focus fully on
working individually on his or her
job. That is everyone except Jim. As
he hadn’t paid attention when we
had discussed our overall strategy,
he was subsequently unable to under-
stand what was expected from him.
Instead, he felt confused by not hav-
ing targets nicely broken down for
him, so that he didn’t have to think
about the overall picture but could
sequentially tick off one job after the
other. This is what I call intellectual
laziness. I also thought Jim had com-
pletely different expectations from
me as his team leader. He expected
me to show more authority and be
less participatory while we planned
our project. I tried to explain to him
my more “democratic” understand-
ing of my role as team leader, that I
perceived myself more as a “primus
inter pares”. As team leader I have
probably the best technical know-
how about our project and all its de-
tails, and this is also what my team
members expect from me. However,
this does not mean that I tell my team
what they have to do, I moderate
more the decision making process,
keep the group together, promote
consensus and control the outcome.
It is only in the case of conflict that
I will enforce a decision. But I think
he considered this leadership concept
just as a weakness. Also, during the
implementation phase he wanted
more guidance from me, as he con-
tinuously asked me what exactly he
should be doing and the exact target
against which his performance would
be measured. I think our German
team members are much more inde-
pendent in the way they do their job.
Jim also seemed quite annoyed
when I tried to align his work to
our way of operating and insisted
he knew best how to do his job. I
should judge his results, not his meth-
ods, he said. However, we have cer-
tain procedures here and everyone
is expected to follow them. I under-
stand that while we have all worked
here for at least 10 years and know
our company procedures very well,
all this was unknown to Jim. But he
should have at least shown some
respect for our methods and should
have tried to follow them, instead of
insisting on doing things in his own
way. Furthermore, it only makes
sense to check on someone regularly
and not just evaluate the final result,
because by then it can be already
too late to adjust things.
Working with the team members
While all team members were con-
centrating on their jobs, Jim both-
ered them all the time with specific
questions. If he had paid more at-
tention in the first place, this would
case01.indd 124case01.indd 124 12/08/10 10:41 AM12/08/10 10:41 AM
125Cooperating and Communicating Across Cultures
PA R TIC A S ES T U D Y
have been completely unnecessary.
During the implementation phase
we prefer to work individually in
a focused way on our own and
don’t need much communication
with other members of the team.
At that stage group meetings only
take place if another exchange of
information is considered necessary.
The incentive to such meetings can
come from anybody in the group.
And if we come together, we tend
to have again a holistic discussion
of the entire project, but this time
based on a more advanced degree
of understanding. What we certainly
don’t like is to make some little
changes here and there, because it
might be momentarily more conven-
ient. We try to come up with fun-
damental solutions to fundamental
problems and some quick fixes will
only endanger the overall applicabil-
ity of these solutions. We therefore
expect that everybody sticks to what
was initially agreed upon and solves
their tasks in a way they will be in
harmony to our overall plan. If we
have to correct any mistakes then
we will do this in a very systematic
and thorough way and try to under-
stand all possible effects a change
in plan will have. Consequently, we
were not too pleased that whenever
a problem occurred Jim was willing
to throw overboard everything we
had carefully elaborated on and just
try out something different. Chang-
ing direction without prior intensive
reflection is a sign of sloppiness.
Good solutions should last a long
time and we try to work here for
the long-term.
When we had the final meeting
in which he presented us the results
of his work, we noticed that he had
actually done quite a good job. How-
ever, a little more modesty about his
work would have been appropriate.
He was also somewhat playing out
too much his certainly well established
presentation skills. I would have pre-
ferred a little more substance in his
presentation and less of a show. For
example, instead of just telling us his
conclusions of what we should be do-
ing and elaborating on that, he should
first have explained more about the
way he developed his proposals.
To sum up, I had thought the
Americans were such great manag-
ers. But now, having had the experi-
ence of working with Jim, I honestly
believe that our way of doing busi-
ness makes more sense.
2. SITUATION: THE PROJECT IS
DOMINATED BY AMERICANS
The German perspective
Introduction
While our company was responsible
for the launch of the new laser in
Europe, our American partners called
the shots for the NorthAmerican
market. Still, I was sent over from
our headquarters in Stuttgart to share
with our American partners the experi-
ences we gained in Germany and to
make sure that our interests were also
sufficiently considered on the Ameri-
can turf. In principle, the task wasn’t
that difficult, as we hardly had any
genuine conflicts ofinterest. It was
just a matter of getting it right. But,
as it turned out,working with the
Americans was not so easy. I always
thought they were so professional,
however I wasn’t overly impressed by
how the project was managed. But in
the end we did alright and I am glad
to return home now.
Planning phase
Problems had already started in the
planning phase. I am an expert in
my field and could have contributed
more thoroughly to the definition of
our overall strategy. Instead, I was
given right away specific targets and
was expected to reach them in a very
short period of time. But were these
really the best targets I could have
been given? I would have preferred
to give more of my input during the
all important planning phase. I was
actually not overly convinced about
the underlying assumptions on which
our strategy was based. But for the
sake of speed a thorough collection
of information and discussion did not
take place. How should one do qual-
ity work on this basis?
Working under the team leader
Right from the word go, I was put
under so much time pressure that
there was no way that I could deliver
something with real substance. And
yet to my surprise what I did was
good enough for my American team
leader. Well, it wasn’t for me. And
indeed later on I had to substantially
modify my original suggestions once
more information became available.
All these subsequent improvements
here and there annoyed me greatly.
These are indications of sloppy work
and in the end cost more time and
energy than if we had invested a lit-
tle more thought in the first place.
Moreover, these “quick and dirty”
solutions and quick fixes are not ex-
actly testament to the upholding of
high quality standards. There was no
sense of perfection.
I was always astonished to see
how quickly my American team leader
reached a decision. He briefly thought
case01.indd 125case01.indd 125 12/08/10 10:41 AM12/08/10 10:41 AM
PA R TIC A S ES T U D Y
126Cooperating and Communicating Across Cultures
about a problem, announced his deci-
sion and that was it. Never any doubts
about possibly being wrong. Also the
other team members just accepted
his decisions without ever questioning
them. They were even expecting our
team leader to make specific decisions
all the time, so that they knew exactly
what to do. Despite the casual tone in
the company, my American colleagues
were much more hierarchy oriented
compared to what I am used to in Ger-
many. Even though we are much more
formal in Germany, I thought in the
American company the atmosphere
was in the end more authoritarian. This
actually came as quite a surprise to
me, as I wasn’t expecting this.
The head of the department in-
sisted that everybody addressed him
by first name, but at the same time
he wouldn’t have the slightest prob-
lem firing someone as soon as he
detected some underperformance.
By contrast, in Germany we would
never call our boss by first name (and
neither would he address us by first
name) even though we have known
each other for more than ten years.
But he would also never fire someone
who works loyally for the company,
after all we are a team, care for each
other and the company has a social
responsibility.
I was also put off by the
speeches our team leader gave us all
the time. I guess they were supposed
to motivate us, but for me that was
just cheap pep talk, probably copied
from these motivation seminars the
Americans are so fond of. However,
what I really appreciated was the
feed-back our team leader gave us,
particularly as it always focused on
the positive. I think that is something
I’d also like to see in Germany.
Working with the team members
While working on our assignments,
frequent adaptations had to be
made. If we all had followed more
precise procedures this could have
been entirely avoided. Moreover, as
long as we met our individual tar-
gets my American team colleagues
didn’t even care if the overall result
made any sense or not. No team
member except the leader has any
holistic concern for the entire project
and feels responsible for the greater
picture. I found it somewhat of a
paradox that the Americans, the ar-
chetype of capitalists, were almost
as obsessed with reaching specific
targets as the communists were under
the centrally planned economy.
At one instance, I was criticized,
because my work didn’t fit with what
the others were doing. But this was
exactly my point. If we don’t bother
to make a detailed picture for our-
selves in the first place, how should
I know what to do? But I was only
told I should have checked with my
team members.
I always had problems with these
informalities. I don’t mind enjoying a
drink after work, but during work we
should refrain from joking around.
As we say in German: “Work is
work and schnaps are schnaps.” I
also noticed that women in the com-
pany don’t like to be treated with
special courtesy. Whenever I held a
door open for a woman or, after a
working lunch, helped a woman with
her coat, I was looked at as if I was
doing something bad.
And when we discussed our final
results, I felt my American colleagues
were all highlighting their individual in-
puts by far too much. We are all team
members and there is no reason to
brag about one’s own achievements.
All my American team members at
first appeared to be so collegial but
in the end everyone was fighting for
his or her own. Everyone pretends to
be good buddy with the others, but
at the same time I have never seen
so much open and almost aggressive
competition among team members. In
this company they always talk about
their team spirit, but I think that is all
corporate propaganda.
The American perspective
Introduction
For two months we had Klaus work-
ing with us in order to prepare the
presentation of our new laser system
on the North American market. Klaus
had been sent over by our German
joint venture partner. He was cer-
tainly very competent and in addition
a really nice guy, once one got to
know him a little better. Nevertheless,
working with him proved to be quite
difficult, he just drove us nuts with his
complete inflexibility. What can you
say, a real German.
Planning phase
Klaus just couldn’t focus on specific
targets and solutions. When we had
our first meeting in order to decide
who does what, Klaus wanted to drag
us into a long discussion about funda-
mental issues which we just perceived
as either irrelevant or something to
think about at a later stage. He wanted
to plan everything down to the last
detail. But you just can’t foresee every-
thing and therefore you have to adapt
and be flexible along the way. But
Klaus just misunderstood our flexibility
and open-mindedness for superficiality
which of course is nonsense. A first
planning meeting should be solution
driven. What exactly do we want to
case01.indd 126case01.indd 126 12/08/10 10:41 AM12/08/10 10:41 AM
127Cooperating and Communicating Across Cultures
PA R TIC A S ES T U D Y
achieve? Once we understand this,
we identify the specific steps we need
to take in order to get there. The main
task of the team leader in the plan-
ning phase is to assign specific team
members to clearly defined tasks and
develop a time plan, specifying what
and when tasks should be achieved.
With the delegation of responsibilities
the planning process is finished and
off you go.
Working under the team leader
Klaus was always quite nervous
about the fact that as team leader I
expected him to be fully responsible
for his assignment. When I told him
his evaluation would be primarily
based on his results he got quite anx-
ious about it, always saying that the
final result could depend on many
things some of which could well be
beyond his control. But as a man-
ager you have to stand up for your
own performance. No excuses.
In our company it is the team
leader who defines the overall objec-
tive and specific targets, who struc-
tures the assignments, and delegates
responsibilities. Subsequently, during
the implementation phase, the team
leader is always available for ques-
tions, provides constant feed-back,
supports the information exchange,
keeps the morale of the team up,
controls whether the various tasks
are achieved on time and evaluates
the team members according to their
individual performance. Overall, the
team leader has a strong position, he
pushes the project forward.
In the end, Klaus came up with
some good results, but in the final
presentation he was completely un-
derselling himself. How should people
see whether you are a high performer
if you can’t even show how good you
are? Also, instead of telling us his pro-
posal right away he started out ex-
plaining at great lengths the specific
assumptions on which his proposal
was based, the various alternative
solutions he formulated, what his se-
lection criteria were etc. etc. When
we all thought he would never come
to the point, he finally told us what
his proposal was. That was quite a
clumsy way of doing a presentation.
Working with the team members
Once Klaus got his assignment he com-
plained that he didn’t have enough
information to do his job. But that is
what a manager is about: to make de-
cisions under uncertainty. And if you
don’t have the information you need,
well, then get it. First he complained
that we hadn’t discussed the problem
enough, but then he just never really
communicated with his team mem-
bers or participated in the ongoing
exchange of information. While we
continuously popped into each others’
offices to clarify things, Klaus just sat
in his office and worked by himself.
When we get our tasks from
our team leader we are expected to
clearly structure our working schedule
and solve each single task, one after
the other. The trial-and-error principle
is an important and often used mecha-
nism. In this phase we use our own
knowledge but also frequently ask our
colleagues for advice. This implemen-
tation phase is usually characterized
by an intense information exchange.
We see constant feed-back from both
team leader and team members as
essential to achieving our individual
tasks. This information exchange takes
place in a very informal way, through
e-mails, telephone calls, dropping by
at others’ offices or just a quick chat
on the corridor. Everyone is available
at every point in time for a short dis-
cussion. We frequently circulate writ-
ten documentation to update each
other on the various working steps. If
we feel that we can improve the final
solution by modifying our plan we do
so at every stage in the process. If one
solution doesn’t work we try the next
one. To quickly come up with a solu-
tion is important, but to be prepared
to quickly drop a decision if a bet-
ter one is found is equally important.
This way we constantly improve the
final outcome. For all this, good time
management is important so that we
can stick to the initial time plan. But
I think Klaus had little understanding
for all that.
Overall, I think Klaus should
loosen up a bit. He can actually be
quite a humorous guy and when we
went to a bar after work we often
had a good laugh. But the next day
at work he was dead serious again,
never made a joke and came across
as rather unfriendly and cold. In par-
ticular, the secretaries didn’t like him
much, as he never spoke a private
word with them, only focused on the
job. Also female colleagues felt at
times rather uncomfortable with his
manners. They thought of the spe-
cial attention and courtesy he paid
them as rather sexist. I don’t think
he meant it in that way, but female
managers in this country prefer to
be treated as fully equal to men
and that includes no preferential
treatment.
Anyway, Klaus will be going
back to Germany now. It was inter-
esting to see how differently people
from other countries act and behave.
And I am relieved to say that our
way of doing things clearly appears
to me to make most sense.
case01.indd 127case01.indd 127 12/08/10 10:41 AM12/08/10 10:41 AM
This page intentionally left blank
PART 2
The chapters in Part I provided the
strategic lens that is central to discus-
sions throughout the book, and they
explained how organizational diversity
and the global environment affect all
organizations. In Part II, we explore im-
portant concepts related to individual-
level processes in organizations.
Chapter 4 explains the concepts
of learning and perception. Through
individual learning, associates gain
the knowledge and skills they need to
perform their jobs in organizations.
Individual learning contributes to the
value of an organization’s human capi-
tal and provides the base for organi-
zational learning, both of which are
critical for organizations to capture a
competitive advantage.
Chapter 5 focuses on personality,
intelligence, attitudes, and emotions.
Managers in organizations need to
understand how each of these human
characteristics affects individual behav-
ior. Personality and intelligence are an
important determinant of a person’s
behavior and performance and cannot
be easily changed. Thus, organizations
must learn how to select associates
with desirable personalities and intel-
ligence levels to maximize the value
of their human capital. However, atti-
tudes and emotions can and do vary.
Attitudes and emotions affect behavior,
and managers can have a signifi cant
effect on individuals’ behavior by tak-
ing actions that affect their attitudes
and emotions.
Chapter 6 examines a fundamen-
tal concept in organizational behavior:
motivation. Individuals can be moti-
vated in various ways and by various
factors. Because individual motivation
is highly critical to individual and or-
ganizational productivity, understand-
ing how to motivate is vital to effective
management.
Chapter 7 deals with stress and
well-being, critical issues in today’s
workplace. While some stress can be
functional, much of the stress individu-
als experience can have negative ef-
fects on their productivity and health.
When managers understand the causes
and consequences of stress, they can
attempt to manage it to reduce dysfunc-
tional outcomes.
individual processes
ORGANIZATIONAL
BEHAVIOR
A GLOBAL CONTEXT
ORGANIZATIONAL
BEHAVIOR
A STRATEGIC APPROACH
ORGANIZATIONAL
DIVERSITY
THE STRATEGIC LENS
INDIVIDUAL PROCESSES
LEARNING AND PERCEPTION
PERSONALITY, INTELLIGENCE, ATTITUDES, AND EMOTIONS
WORK MOTIVATION
STRESS AND WELL-BEING
GROUPS, TEAMS, AND SOCIAL PROCESSES
LEADERSHIP
COMMUNICATION
DECISION MAKING BY INDIVIDUALS AND GROUPS
GROUPS AND TEAMS
CONFLICT, NEGOTIATION, POWER, AND POLITICS
THE ORGANIZATIONAL CONTEXT
ORGANIZATIONAL STRUCTURE AND CULTURE
ORGANIZATIONAL CHANGE AND DEVELOPMENT
c04.indd 129c04.indd 129 12/08/10 10:45 AM12/08/10 10:45 AM
This page intentionally left blank
4
?knowledge objectives
After reading this chapter, you should be able to:
1. Describe the effects on learning of positive rein-
forcement, negative reinforcement, punishment,
and extinction.
2. Discuss continuous and intermittent schedules of
reinforcement.
3. Explain how principles of learning can be used to
train newcomers as well as to modify the behavior
of existing associates.
4. Describe the conditions under which adults learn,
in addition to rewards and punishments.
5. Describe some specifi c methods that organizations
use to train associates.
6. Discuss learning from failure.
7. Identify typical problems in accurately perceiving
others and solutions to these problems.
8. Explain the complexities of causal attributions and
task perception.
learning and
perception
exploring behavior in action
The Strategic Importance of Learning
and Perception
V
F Corporation, headquartered in Greensboro, North Carolina, is the world’s largest apparel manufacturer, with
revenues of $7 billion plus annually. Chances are that you have several items of their clothing in your closet.
Their more than thirty brands include: Wran-
gler, Lee, Vans, The North Face, 7 for all mankind, and
Jansport. In 2004, the VF Corporation launched a new
growth plan, that has been incredibly successful. The
goal of this plan was to transform the VF Corporation
in a global lifestyle apparel company. At the center of
the plan are six Growth Drivers, one of which is build-
ing new growth enablers. The company describes this
goal as: “Taking our company to new heights requires
new capabilities and skills, and we’ve invested in areas
that are specifi cally designed to support our growth. …
[W]e know that providing our leaders and associates
with new tools and training that stretches their capa-
bilities is crucial to our continued success.” Thus, as-
sociate learning, development, and knowledge sharing
has become one of the crucial drivers of the VF Cor-
poration’s new strategy. Tom Nelson, VF Corporation’s
manager of global sourcing states, “Learning and devel-
opment makes a signifi cant contribution to the com-
pany’s ongoing success.”
VF Asia Ltd., a subsidiary of VF Corporation lo-
cated in Hong Kong, took this directive very seriously.
This subsidiary totally reorganized its learning unit,
which had previously been somewhat piecemeal, with
a program here, a learning opportunity there. Tommy
c04.indd 131c04.indd 131 12/08/10 10:45 AM12/08/10 10:45 AM
132
Sources: ASTD BEST Awards. At http://www.astd.org/ASTD/aboutus/AwardsandBestPractices/bestAwards/; ASTD Learning Circuits,
Nov. 17, 2009. At http://www.astd.org/LC/news.htm. J.J. Salopek, P. Harris, P. Ketter, M. Laff, & J. Llorens. 2009. “Success is in the
details.” T � D, Oct. 63, 10 ; pp. 36–38. VF Corporation. Dec. 2009. At http://www.vfc.com/about/our-strategy/growth-drivers.
The redevelopment of VF Asia Ltd.’s learning and development strategy illustrates the
importance of learning to the overall strategic goals of the organization. The learning
processes in this organization serve to develop current associates so that they have the
knowledge, skills, and abilities to allow the organization to grow. Associates simply do
not go through one-time training programs—what they learn in training is later assessed
Lo, learning and development manager, guided the two-
person regional training team by fi rst creating a strategy.
The company’s 780 employees were grouped into one of
four learning categories, determined by their level in the
organization and the content that needed to be learned and
skills developed. These categories are personal competen-
cies, functional leadership,
managerial leadership, and
strategic leadership. Fur-
thermore, all functions
associated with training,
performance review and de-
velopment, feedback, and
reward were grouped to-
gether in the same program.
Thus, training and develop-
ment is tied to on-the-job
performance. A further part
of the fi rm’s learning and
development strategy was
to keep as many programs
and initiatives as possible in-house rather than outsourc-
ing them to vendors and contractors. Not only is this
cost-effective, but it makes the most use out of in-house
knowledge and talent. Finally, although VF Asia is across
the world from its parent company, learning and develop-
ment at the subsidiary is well integrated with that which
takes place at headquarters. Tommy Lobelongs to the VF
Global Learning Community, which shares new ideas and
best practices through conference calls, andcertain em-
ployees attend corporate learning programs such as the VF
Leadership Institute.
There are many specifi c initiatives in place, all of
which are tied to company core competencies. One con-
cern was leadership development. To that end, Lo and his
team developed a senior executive curriculum and middle-
manager-level curriculum. Another concern was turnover.
Thus, they developed a program to improve managers’ in-
terviewing skills, so that they would be better at judging
job candidates. Turnover decreased from 26.8 percent in
2007 to 19.3 percent in 2008. In order to improve associ-
ates’ ability to deal with customers from diverse cultures,
the SELF (Self Enhancement Learning Fundamentals) pro-
gram was initiated. This is
an online training program
covering topics such as
etiquette and negotiations.
Associates can use this pro-
gram at their own leisure.
Overall, the 780 associates
at VF Asia Ltd. underwent
14,200 hours of training
in 2008.
The vast majority of
organizations do not assess
the effectiveness of their
training programs beyond
getting participants’ reac-
tions to the programs. Things are different at VF Asia
Ltd. Learning goals are tied into individual performance
evaluations and to the strategic goals of the organization.
Monthly learning and development summaries are sent
to executives. VF Asia Ltd. makes sure its training and
development dollars are well spent. In 2009, this focus on
learning was recognized with a BEST award by the Amer-
ican Society for Training and Development (ASTD). The
criteria for this award are:
• learning has an enterprise-wide role
• learning has value in the organization’s culture
• learning links to individual and organizational
performance
• investment is made in learning and performance
initiatives
©Martin Gerten/epa/Corbis
c04.indd 132c04.indd 132 12/08/10 10:45 AM12/08/10 10:45 AM
http://www.astd.org/ASTD/aboutus/AwardsandBestPractices/bestAwards/
http://www.astd.org/LC/news.htm
http://www.vfc.com/about/our-strategy/growth-drivers
Fundamental Learning Principles 133
as part of their job performance and is thus tied to individual rewards. As we will soon
discuss, rewards play an important role in the learning process.
At a second level, learning processes help VF Asia tie individual training, develop-
ment, performance evaluation, and rewards to the overall strategic vision of the organiza-
tion. The corporate strategy and goals determine what is to be learned, and the success of
training and development initiatives are evaluated at the executive level by the degree to
which they achieve the fi rm’s strategic goals. Learning is fully integrated into the culture at
VF Asia Ltd. and is therefore viewed as an important part of the organization’s success by
associates and leaders at all levels in the fi rm.
To be competitive in the dynamic twenty-fi rst century, an organization must have as-
sociates and managers who can effectively learn and grow. Continuous learning based on
trying new things plays a critical role in an organization’s capability to gain and sustain a
competitive advantage. Organizations can improve only when their human capital is en-
riched through learning. Their human capital must be better and produce more value for
customers than their competitors to gain an advantage in the marketplace and to maintain
that advantage.1 Furthermore, providing developmental opportunities to associates helps
organizations attract and retain the people most interested in personal growth and becom-
ing better at their work. Thus, managers need to develop the means for associates and all
managers to continuously improve their knowledge and skills.
To open this chapter, we explore the fundamentals of learning, including contin-
gencies of reinforcement and various schedules of reinforcement. From there, we apply
learning principles to the training of newcomers and the purposeful modifi cation of
existing associates’ behavior. We focus on specifi c conditions helpful to learning, the use
of behavior modifi cation, simulations, and how people can learn from failure. Next, we
move to a discussion of perception. Accurately perceiving characteristics of people, at-
tributes of tasks, and the nature of cause-and-effect relationships is critical to properly
assessing and learning from experiences. Several mental biases, however, can interfere
with accurate perceptions.
Fundamental Learning Principles
When individuals fi rst enter an organization, they bring with them their own unique
experiences, perceptions, and ways of behaving. These patterns of behavior have de-
veloped because they have helped these individuals cope with the world around them.
However, associates introduced to a new organization or to new tasks may need to
learn new behaviors that will make them effective in the new situation. Associates and
managers must therefore be acquainted with the principles and processes that govern
learning.
In the fi eld of organizational behavior, learning refers to relatively permanent changes
in human capabilities that occur as a result of experience rather than a natural growth pro-
cess.2 These capabilities are related to specifi c learning outcomes, such as new behaviors,
verbal information, intellectual skills, motor skills, attitudes, and cognitive strategies. Both
parts of this defi nition are important. First, learning takes place only when changes in
capabilities occur. Ultimately, these changes should result in changed behavior, since true
learning represents adaptation to circumstances, and this must be refl ected in behavior.
Furthermore, this change should be relatively permanent until a new response is learned
learning
A process through which
individuals change their
relatively permanent behavior
based on positive or negative
experiences in a situation.
c04.indd 133c04.indd 133 12/08/10 10:45 AM12/08/10 10:45 AM
134 Chapter Learning and Perception
to the given situation. Second, learning is driven by experience with a particular situation.
An associate may gain insights into a situation by thoughtfully trying different approaches
to see what happens, by randomly trying different actions in a trial-and-error process, or
by carefully observing others’ actions. In all cases, however, the associate has gained experi-
ence in the situation—experience that affects behavior when the situation occurs again.
Change in one’s capabilities due to a natural growth process (e.g., gaining muscle strength)
is not learning.
Operant Conditioning and Social Learning Theory
Most behavior exhibited by associates and managers is intentional in the sense that a given
behavior is designed to bring about a positive consequence or avoid a negative conse-
quence. Some associates shake hands when they see each other in the morning because it
feels good and expresses respect or affection. Other associates apply the brakes on a fork-
lift to avoid an accident. Managers may not develop close social relationships with their
organization’s associates in order to avoid the complications that can result. All of these
behaviors have been learned.
Operant conditioning theory and social learning theory both can be used to explain
learning. Both are reinforcement theories based on the idea that behavior is a function of
its consequences.3 Operant conditioning theory traces its roots at least back to a famous
set of experiments involving cats, dogs, and other animals in the late 1800s.4 The goal of
the experiments was to show that animals learn from the consequences of their behavior
in a very straightforward way—that presentation of a reward, such as food, conditions an
animal to repeat the rewarded behavior in the same or similar situations. In later years,
researchers such as B.F. Skinner emphasized this same conditioning in people.5 These
researchers, known as behaviorists, adopted the position that higher mental processes typi-
cally ascribed to human beings are irrelevant for behavior because all human learning is
the result of simple conditioning, just as in cats, rats, dogs, and monkeys. In other words,
people do not need to think to learn.
While operant conditioning explains a great deal of human learning, later scientists
argued that people can learn in other ways. The most prominent of these theories is social
learning theory. Social learning theory, developed by psychologist Albert Bandura, re-
jects the idea that higher mental processes are nonexistent or irrelevant in humans.6 This
theory emphasizes that humans can observe others in a situation and learn from what they
see. Thus, humans do not need to directly experience a particular situation to develop
some understanding of the behaviors that are rewarded in that situation.
Contingencies of Reinforcement
The basic elements of learning include:
• The situation (sometimes referred to as “the stimulus situation”)
• The behavioral response of the associate or manager to the situation
• The consequence(s) of the response for the associate or manager
These elements interact to form contingencies of reinforcement. These contingen-
cies, explained below, describe different types of consequences that can follow behavioral
responses.
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.
c04.indd 134c04.indd 134 12/08/10 10:45 AM12/08/10 10:45 AM
Fundamental Learning Principles 135
Positive and Negative Reinforcement
As shown in Exhibit 4-1, when the consequences of a behavior are positive in a particular
situation, individuals are likely to repeat that behavior when the situation occurs again.
The introduction of positive consequences, such as peer approval for an associate’s correc-
tion of quality problems, increases the likelihood of that behavior being repeated in similar
settings. This is called positive reinforcement. Similarly, when a particular behavior in
a given situation results in the removal of previous negative consequences, the likelihood
of repeating the behavior in similar settings will probably increase. Thus, the removal of
negative consequences is called negative reinforcement. If working harder and smarter
removes the frown from a manager’s face, an associate may attempt to work harder and
smarter.
Punishment
When behavior results in the introduction of a negative consequence, individuals are less
likely to repeat the behavior. This is called punishment. Punishment differs from nega-
tive reinforcement in that an undesirable consequence is introduced rather than removed.
Punishment reduces the likelihood of a behavior, whereas negative reinforcement increases
the likelihood. An associate who is reprimanded by peers for returning a few minutes late
from lunch experiences punishment, as does an associate whose manager assigns him less
preferred work hours in response to tardiness.
Punishment must be used judiciously in organizations because it can create a backlash
both among those punished and among those who witness the punishment.7 It is impera-
tive when punishment is doled out that it be made contingent upon associates engaging
in negative behavior.8 Several examples illustrate this problem. At the Providence Journal,
a newspaper organization in the northeastern United States, senior management repri-
manded two individuals and suspended a third for an editorial cartoon that seemed to
poke fun at the publisher. Union offi cials and many union members believed the punish-
ments were too harsh, resulting in ill will at a time when relations were already strained.9
At Fireman’s Fund, the leadership of a Tampa offi ce terminated an associate who had
“dangerous and violent propensities.” Although termination was probably a reasonable
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.
New behavioral
response to
the situation
Introducing positive consequences
or removing negative ones cause
a person to repeat behavior in
similar situations in the future.
Aversive consequences (punishment) cause the
person to avoid the same behavior and try new
behaviors in a similar situation in the future.
The situation
Behavioral response
to the situation
Consequences of
the behavior
Exhibit 4-1 Effects
of Reinforcing Conse-
quences on Learning
New Behaviors
c04.indd 135c04.indd 135 12/08/10 10:45 AM12/08/10 10:45 AM
136 Chapter Learning and Perception
response, the result was far from reasonable; the terminated individual returned intending
to harm former co-workers, illustrating the complexity of managing punishment.10 At the
IRS, some managers failed to discipline associates for tardiness, extended lunches, and so
forth in a consistent manner, resulting in numerous problems.11
What constitutes an appropriate use of punishment in an organization? When associ-
ates exhibit minor counterproductive behaviors, such as rudeness to a peer or a lunch that
lasts a few minutes too long, punishment involving a verbal reprimand can be delivered
informally by peers or a manager. For more serious behaviors, such as intentional and
repeated loafi ng or consistently leaving the workplace early, a more formal process should
be used. Based on requirements set by the National Labor Relations Act, Union Carbide
has successfully used the following formal process when dealing with problems as they
unfold over time: (1) the problem is discussed informally, and the associate is reminded of
expectations; (2) the associate receives one or more written reminders; (3) the associate is
suspended for one day, with pay, and asked to consider his future with the organization;
and (4) the associate is terminated.12
Whether they are imposing minor informal punishment or major formal punish-
ment, associates and managers should follow several guidelines:
• Deliver the punishment as quickly as possible following the undesirable behavior.
• Direct the punishment at specifi c 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.
The problems at Korean Air discussed in the Managerial Advice feature were caused
at least in part by the overuse of punishment. Clearly, as the case illustrates, the use of
punishment at this airline played a role in the crash. Being struck by a person above you
in the organization is a particularly diffi cult situation, even for those in an authoritarian
culture. Such an approach is inappropriate in a high-involvement organization. In com-
plex situations, associates and managers need the input of others to avoid making possibly
serious errors such as those leading to the Korean Air crash. The changes implemented by
the new president of the airline and the director of fl ight operations have helped to resolve
the problem. Because Korean culture respects traditional authority, changing the culture
at this airline was diffi cult.13 Yet the changes were important for the airline to compete in
a global marketplace.
Extinction
Because punishment can be a diffi cult process to manage, organizations may instead de-
sire to extinguish dysfunctional behavior by removing its reinforcing consequences. This
procedure is called extinction. It is diffi cult to use extinction, however, unless a manager
has full control over all reinforcing consequences. For instance, an associate may be con-
sistently late to work because he prefers to avoid morning rush-hour traffi c or likes to
sleep late. Missing the rush hour and sleeping late are both activities that offer rewarding
consequences for being late to work. Associates and managers desiring to extinguish this
behavior are unlikely to be able to remove these reinforcing consequences.
The reinforcing consequences of some dysfunctional work behaviors, however, may be
completely removable. For example, an associate may have developed a habit of regularly
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.
c04.indd 136c04.indd 136 12/08/10 10:45 AM12/08/10 10:45 AM
Fundamental Learning Principles 137
MANAGERIAL ADVICE
A t 1:00 A.M. on August 6, 1997, the pilots of a Ko-rean Air 747 prepared to
land at the Guam airport. Because
the airport’s glide slope guidance
system had been turned off for main-
tenance and because the airport’s ra-
dio beacon was located in a nonstan-
dard position, the landing was more
diffi cult than usual. A rainstorm fur-
ther complicated the situation. Under
these conditions, the captain needed
frank and timely advice from a fully
informed and empowered co-pilot
and fl ight engineer. Sadly, no such
advice was given by the intimidated
subordinates. The resulting crash
claimed 228 lives.
The suboptimal cockpit climate on
board the aircraft that morning seems
to have been caused in part by Ko-
rean Air’s authoritarian culture, which
included heavy-handed punishment
delivered by captains for unwanted
subordinate input and mistakes. Park
Jae Hyun, a former captain with the
airline and then a fl ight inspector
with the Ministry of Transportation,
believed that teamwork in the cockpit
was nearly impossible in the existing
“obey or else” environment, where
co-pilots “couldn’t express themselves
if they found something wrong with
the captain’s piloting skills.” This
environment was perhaps
most clearly evident dur-
ing training. An Ameri-
can working as a pilot for
the airline reported, “I’ve
seen a captain punch a
co-pilot … for a mistake
and the co-pilot just said,
’Oh, sorry, sorry.’” An-
other American reports
being hit as well, but as
an outsider he did not ac-
cept the abuse and said
to the captain, “Do it again and I’ll
break your arm.”
Korean offi cials, American offi –
cials, and many others believed
change was necessary to prevent
additional accidents and to gener-
ally improve the organization. Fol-
lowing another crash and the forced
resignations of key leaders in the late
1990s, new leaders inside Korean
Air took actions to change the au-
thoritarian, punishment-oriented cul-
ture. Yi Taek Shim, the new president,
vowed that cultural and technologi-
cal problems would be addressed
whatever the cost. Koh Myung Joon,
who became the new director of
fl ight operations, sought captains
for training duty who had “the right
temperament,” meaning they would
not use inappropriate, heavy-handed
punishment but rather would focus
on positive reinforcement for desired
behavior. These leaders clearly had
useful insights. Korean Air has had
an excellent safety record in the
twenty-fi rst century, and crucial rela-
tionships with partner airlines have
been strengthened.
Consistent with actions and out-
comes at Korean Air, Francis Fried-
man of Time & Place Strategies in
New York has said that individuals
in positions of authority should not
“get into a kick-the-dog mentality.”
Even Simon Kukes, a Russian who
achieved notoriety as CEO of Tyu-
men Oil, has suggested that manag-
ers should not “yell, scream, and try
to fi nd someone to punish.” This is
interesting advice, given the general
authoritarian culture in Russia.
Punishment Taken Too Far
Sources: “Korean Air Is Restructuring Its Flight Operations Division,” Aviation Week & Space Technology, 152,
no. 21 (2000): 21; “Cargo Airline of the Year: Korean Air Cargo,” Air Transport World, 40, no. 2 (2000): 30–31;
W.M.Carley and A. Pasztor. 1999. “Pilot Error: Korean Air Confronts Dismal Safety Record Rooted in Its Culture,”
Wall Street Journal, July 7; Z. Coleman and M. Song. 2001. “Inquiry Blames Cockpit Crew for KAL Crash,” Wall Street
Journal, June 6, P.M. Perry. 2001. “Cage the Rage,” Warehousing Management, 8, no. 2: 37–40; P. Starobin. 2001.
“The Oilman as Teacher,” BusinessWeek, June 25, G. Thomas. 2000. “Korean Air CEO Vows ’No More Excuses,’”
Aviation Week & Space Technology, 153, no. 1: 48; G. Thomas. 2002. “The Yin and Yang of Korean Air,” Air Trans-
port World, 39, no. 10: 26–29.
©Charles Polidano/Touch the Skies/Alamy
c04.indd 137c04.indd 137 12/08/10 10:45 AM12/08/10 10:45 AM
138 Chapter Learning and Perception
visiting the manager’s offi ce to complain about her co-workers. Most of the complaints
are trivial, and the manager wishes to extinguish this practice. However, the fact that the
manager has appeared to be attentive and understanding is a positive, reinforcing conse-
quence. The manager may therefore extinguish the behavior by refusing to listen whenever
this associate complains about her co-workers. (During a useful conversation with the
associate, the manager would, of course, be attentive; only the dysfunctional behavior
should be extinguished.) To use extinction, then, managers must recognize the reinforcing
consequences of a behavior, and these consequences must be controllable.
Extinction is supposedly used to eliminate dysfunctional behavior. However, this phe-
nomenon can also result in unintended consequences by extinguishing desirable behavior.
In a study of hospital employees, some researchers found that when managers failed to
provide feedback for good performance (a reward), employees performed more poorly and
became unsatisfi ed with their jobs.14
Schedules of Reinforcement
Positive and negative reinforcement are powerful tools in many situations. To fully lever-
age these two tools, it is important to understand schedules of reinforcement.15 These
schedules determine how often reinforcement is given for desired behavior. Reinforcement
does not necessarily need to follow every instance of a positive behavior.
The simplest schedule is continuous reinforcement, whereby reward occurs after
each instance of a particular behavior or set of behaviors. This schedule tends to produce
reasonably high rates of the rewarded behavior because it is relatively easy for an indi-
vidual to understand the connection between a behavior and its positive consequences.16
Behavior in organizations, however, often is not reinforced on a continuous schedule, for
several reasons. First, once initial learning has occurred through training and/or coach-
ing, continuous reinforcement is not required to maintain learned behavior. Second, in
today’s organizations, both managers and associates are presumed to be self-managing,
at least to some degree. Thus, they do not need continuous reinforcement of positive
actions.
Intermittent reinforcement, then, is often used to maintain learned behavior. Sched-
ules can vary by rewarding responses only after a specifi ed number of correct behaviors
have occurred or after a specifi ed amount of time has passed. The four most common
intermittent schedules found in organizations are as follows:
1. Fixed interval. With this schedule, a reinforcement becomes available only after
a fi xed period of time has passed since the previous reinforcement. For example,
an associate at an airport car rental counter might receive a dollar and praise for
saying “May I help you?” rather than using the grammatically incorrect “Can
I help you?” Because the manager delivering the reinforcement has a limited
amount of money and time to devote to this bonus plan, he might listen from
his back offi ce for the proper greeting only after two hours have passed since
his last delivery of reinforcement. Upon hearing the greeting after the two-hour
interval, the manager would provide the next reinforcement. A fi xed-interval
schedule like this one can make the desired behavior more resistant to extinction
than the continuous schedule because the associate is not accustomed to being
reinforced for every instance of the desired behavior. However, it can also yield
lower probabilities of the desired behavior immediately after reinforcement has
continuous
reinforcement
A reinforcement schedule
in which a reward occurs
after each instance of a
behavior or set of behaviors.
intermittent
reinforcement
A reinforcement schedule
in which a reward does not
occur after each instance of a
behavior or set of behaviors.
c04.indd 138c04.indd 138 12/08/10 10:45 AM12/08/10 10:45 AM
Fundamental Learning Principles 139
occurred because the person may realize that no additional reinforcement is
possible for a period of time. Moreover, it can yield generally low probabilities of
the desired behavior if the fi xed interval is too long for the situation.17 Overall,
this schedule of reinforcement tends to be the least effective.
2. Variable interval. With this second schedule, a reinforcement becomes available
after a variable period of time has passed since the previous reinforcement. In our
car rental example, the manager might listen for and reward the desired greeting
one hour after the previous reinforcement and then again after one half hour, and
then again after three hours. This schedule can produce a consistently high rate
of the desired behavior because the associate does not know when reinforcement
might be given next. If, however, the average time between reinforcements
becomes too great, the variable-interval schedule can lose its effectiveness.18
3. Fixed ratio. With this third reinforcement schedule, a reinforcer is introduced
after the desired behavior has occurred a fi xed number of times. In our car rental
example, the manager might listen closely to all of the greetings used by a given
associate and reward the desired greeting every third time it is used. In industrial
settings, managers may create piece-rate incentive systems whereby individual
production workers are paid, for example, $5.00 after producing every fi fth
piece. Although the fi xed-ratio schedule can produce a reasonably high rate
of desired behavior, it can also result in a short period immediately following
reinforcement when the desired behavior does not occur.19 Such outcomes occur
because associates and managers relax following reinforcement, knowing they
are starting over.
4. Variable ratio. With our fi nal schedule, a reinforcement is introduced after the
desired behavior has occurred a variable number of times. The manager of our car
rental counter may listen closely all day to the greetings but, because of money
and time constraints, reward only the fi rst desired greeting, the fi fth, the eight,
the fi fteenth, the seventeenth, and so on. This schedule of reinforcement tends to
produce consistently high rates of desired behavior and tends to make extinction
less likely than under the other schedules.20 The variable-ratio schedule is very
common in many areas of life, including sports: baseball and softball players
are reinforced on this schedule in their hitting, basketball players in their shot
making, anglers in their fi shing, and gamblers in their slot machine activities. In
business organizations, salespersons are perhaps more subject to this schedule than
others, with a variable number of sales contacts occurring between actual sales.
Exhibit 4-2 summarizes various schedules of reinforcement.
Social Learning Theory
Although the principles of operant conditioning explain a great deal of learning that takes
place, people also learn in other ways. Social learning theory—and later, social cognitive
theory—argues that in addition to learning through direct reinforcement, people can also
learn by anticipating consequences of their behavior and by modeling others.21 In other
words, learning occurs through the mental processing of information.22
According to these approaches to learning, one way that associates can learn is
through symbolization and forethought.23 People have the ability to symbolize events and
c04.indd 139c04.indd 139 12/08/10 10:45 AM12/08/10 10:45 AM
140 Chapter Learning and Perception
to anticipate consequences. This means that rather than having to directly experience pos-
sible consequences of one’s behavior, a person can try out various scenarios in his or her
mind to determine what potential consequences may result from a particular behavior. For
example, if a manager has to make a decision about whether to open a new branch offi ce,
she can rely on past experience to come up with symbolic representation of the problem
and then anticipate what outcomes may occur if she decides to open the new offi ce.
According to social learning theory, people also learn by observing others. Rather than
having to experience consequences fi rst-hand, associates can observe the behavior of oth-
ers and the results of that behavior.24 When results are positive, then associates will model
the behavior demonstrated by the other person. For example, if an associate is trying to
learn how to give presentations, rather than try out many different presentation styles, he
may observe his supervisor, who is a wonderful presenter, and then model the supervisor’s
presentation style. Associates are most likely to model the behavior of people they perceive
to be competent, powerful, friendly, and of high status within the organization.25
Social learning theory also states that an individual’s belief that he will be able to per-
form a specifi c task in a given situation is important to learning. This belief is referred to as
one’s self-effi cacy.26 When associates have high self-effi cacy toward a particular task, they
believe that they can perform that task well. People will not engage in behaviors or will
perform poorly when they do not believe that they are able to accomplish the task at a sat-
isfactory level. Athletes are often trained to visualize themselves performing extremely well
self-effi cacy
An individual’s belief that
he or she will be able to
perform a specifi c task
in a given situation.
Fixed Interval (Reinforcement based on a consistent unit of lapsed time following previous reinforcement)
Continuous Schedule (Reinforcement follows each instance of the desired behavior)
Intermittent Schedules (Reinforcement does not follow each instance of the desired behavior)
B R B R B R B R
B R B R B R B R
1 unit of time 1 unit of time 1 unit of time
Variable Interval (Reinforcement based on varying lapses of time)
B R B R B R B R
1 unit of time 2 units of time 1 unit of time
Fixed Ratio (Reinforcement based on consistent number of instances of the desired behavior)
R
3 instances
of the behavior
3 B R
3 instances
of the behavior
3 B R
3 instances
of the behavior
3 B R
3 instances
of the behavior
3 B
Variable Ratio (Reinforcement based on varying numbers of instances of the desired behavior)
R
1 instance of
desired behavior
1 B R
3 instances of
desired behavior
3 B R
2 instances of
desired behavior
2 B R
1 instance of
desired behavior
1 B
Exhibit 4-2 Schedules of Reinforcement
c04.indd 140c04.indd 140 12/08/10 10:45 AM12/08/10 10:45 AM
Training and Enhancing the Performance of Associates141
in order to increase their self-effi cacy, and consequently their performance. A great deal of
research has shown that self-effi cacy increases performance and learning, beyond ability.27
If there are two people with the same ability, the person with the higher self-effi cacy will
tend to perform better and learn more.
Other Conditions for Learning
In addition to learning through consequences and observing others, more recent research
has noted that the following conditions help facilitate adult learning:28
• Associates need to know why they are learning what they are learning. People become
more motivated to learn when they understand why what they are learning is
important.29 For example, in order for associates to successfully train to engage
in safe behaviors, they must fi rst understand what constitutes safe behavior and
then understand the consequences of not engaging in these behaviors.30 In order
for associates to know why they are learning what they are learning, they must
be provided with specifi c learning objectives.31 Also, allowing associates to either
directly or vicariously experience the negative effects of not learning may help
them understand why learning the material is important.32 We discuss learning
from failure in more detail later in this chapter.
• Associates need to use their own experiences as the basis for learning. Many teaching
and learning experts believe that people learn best when they can tie newly
learned material to their past experiences, take an active role in their own
learning, and are able to refl ect on their learning experiences.33 According to the
experiential learning perspective, it is imperative for learning to include active
experimentation and refl ective observation.34 This is why many MBA programs
include team exercises to teach teamwork skills. Rather than just reading about
the importance of teamwork and how to achieve it, students actually experience
their lessons and later are asked to refl ect upon what they have learned.
• Associates need to practice what they have learned. Practicing means repetitively
demonstrating performance stated in the learning objectives. Overlearning due
to constant practice improves the likelihood that associates will engage in newly
learned behaviors once they leave the learning situation.35 Overlearning means
that performing the new behavior takes little conscious thought, so that the
performance becomes automatic.
• Associates need feedback. A great deal of research has been conducted on the effects
of feedback on learning.36 Feedback can facilitate learning by providing associates
with information about what they should be learning and it can also act as a
reward. Feedback is most conducive to learning when associates are comfortably
familiar with the material to be learned or when the material is relatively simple.37
Training and Enhancing the
Performance of Associates
The learning concepts discussed thus far have been successfully used over the years to train
newcomers as well as to improve the performance of existing associates. To achieve posi-
tive results when training a newcomer, managers often reinforce individuals as they move
c04.indd 141c04.indd 141 12/08/10 10:45 AM12/08/10 10:45 AM
142 Chapter Learning and Perception
closer to the desired set of behaviors. The following steps capture the most important
elements in the process:
1. Determine the new behaviors to be learned.
2. For more complex behavior, break the new behavior down into smaller, logically
arranged segments.
3. Demonstrate desired behaviors to the trainee. Research indicates that modeling
appropriate behaviors is very useful.38 Research also indicates that unless the key
behaviors are distinctive and meaningful, the trainee is not likely to remember
them on the job.39
4. Have the trainee practice the new behaviors in the presence of the trainer.
5. Make reinforcement contingent on approximations of desired behavior.
At the outset, mild reinforcement can be given for a good start. As the
training continues, reinforcement should be given only as progress is made.
Reinforcement should be immediate, and over time behavior should be
reinforced only if it comes closer to the ultimate desired behavior.40
In newcomer training, managers in many organizations use this approach. Trilogy,
a software fi rm based in Austin, Texas, uses positive reinforcement as new hires work
through successively more diffi cult assignments in a boot camp that lasts several months.41
E.L. Harvey & Sons, a refuse collector based in Westborough, Massachusetts, has used
positive reinforcement as well as mild punishment in its training and orientation program
for new drivers.42 Dallas-based Greyhound Bus Company has used positive reinforcement
and mild punishment as drivers master proper city, rural, and mountain driving tech-
niques. As one recent trainee stated, “You’re not going to be perfect the fi rst time. Some
things you’ll get used to doing. I’ll get better.”43
Organizations use numerous methods to train employees.44 On-the-job training meth-
ods include orientation programs, organizational socialization experiences, apprenticeship
training, coaching, formal mentoring, job rotation, career development activities, and tech-
nology-based training. Off-site training methods include instructor-led classrooms, video-
conferencing, corporate universities and institutes, and virtual-reality simulators. Learning
can also take place informally through trial-and-error, informal mentoring relationships,
interactions with co-workers, and from learning from one’s mistakes. We highlight three
learning methods below: OB Mod, simulation learning, and learning from failure.
OB Mod
To improve the performance of existing associates on ongoing tasks, organizations must be
concerned not only with developing good habits but also with breaking bad ones. As an
aid in this process, a formal procedure known as organizational behavior modifi cation, or
OB Mod, is often used.45 The basic goal of OB Mod, which some refer to as performance
management, is to improve task performance through positive reinforcement of desirable
behaviors and elimination of reinforcements that support undesirable behaviors.46 Its
value lies in the specifi c, detailed steps that it offers.
As shown in Exhibit 4-3, the OB Mod framework can be represented as a simple fl ow-
chart. In the initial steps, managers determine desirable and undesirable behaviors and
assess the extent to which individuals are currently exhibiting those behaviors. Desirable
OB Mod
A formal procedure
focused on improving task
performance through positive
reinforcement of desired
behaviors and extinction
of undesired behaviors.
c04.indd 142c04.indd 142 12/08/10 10:45 AM12/08/10 10:45 AM
Training and Enhancing the Performance of Associates143
Must be
IDENTIFY
Behaviors for change
Use
• Positive reinforcement
• Extinction
Measure
Post-intervention
frequency
Apply intervention
Develop intervention
INTERVENE
ANALYZE
Existing reinforcers
• Observable
• Measurable
• Task-related
• Critical to the task
Use
MEASURE
Existing frequency of
desired behaviors
• Direct observation
• Archival data
No
EVALUATE
For performance
improvement
Schedules of
Reinforcement
Use
• Continuous
• Intermittent
• Ratio
• Interval
Yes
Behavior
modified?
Maintain the modification
Exhibit 4-3 Shaping Behavior through OB Modifi cation
Source: Adapted from Luthans, F., & Stajkovic, A.D. 1999. “Reinforce for Performance: The Need to Go Beyond Pay
and Even Rewards,” Academy of Management Executive, 13 (2): 49–57.
c04.indd 143c04.indd 143 12/08/10 10:45 AM12/08/10 10:45 AM
144 Chapter Learning and Perception
behaviors may be as simple as using a production machine or answering the telephone in
a different way. In the next step, the functional analysis, managers determine reinforcers
that can be used to increase the frequency of desired behavior (e.g., praise, preferential
work arrangements, time off ) and reinforcers that must be eliminated to extinguish un-
desirable behaviors (e.g., social approval from co-workers for loafi ng). Next, managers
apply the knowledge they have gained concerning reinforcers in an effort to alter behavior
in a fruitful way. If successful in this step, they can develop an appropriate reinforcement
schedule for the future. Finally, the impact of modifi ed behaviors on job performance
indicators, such as units produced per day, is assessed.
Research has been generally supportive of OB Mod. One study found that PIGS
(positive, immediate, graphic, and specifi c) feedback, coupled with social reinforcement
for desired behavior (e.g., praise, attention, compliments), improved the delivery of qual-
ity service by tellers in a bank.47 Another study found that feedback coupled with social
reinforcement and time off helped overcome signifi cant performance problems among
municipal workers.48 In Russia, a study determined that feedback and social reinforce-
ment improved the quality of fabric produced by textile workers.49 Overall, research has
found an average performance gain of 17 percent when OB Mod was explicitly used.50
OB Mod research reveals that performance improvements tend to be greater in manu-
facturing organizations (33 percent on average) than in service organizations (13 percent
on average).51 This difference across types of organizations highlights a weakness of the
OB Mod approach. For jobs that are complex and nonroutine, such as those found in
some service organizations (e.g., accounting fi rms, law fi rms, and hospitals), OB Mod
tends to be less effective. In complex jobs, where excellent performance in core job areas
(successful audits, effective surgical procedures) is based on deep, rich knowledge and on
skills that can take months or years to develop, short-term interventions based on the
simple principles of operant conditioning and social learning may not yield particularly
strong performance gains.52 For organizations seeking to develop their human capital for
competitive advantage, this limitation must be considered.
OB Mod research also reveals another important fact: performance feedback coupled
with social reinforcements can be as effective as feedback coupled with monetary reinforc-
ers.53 In the studies of bank tellers, municipal workers, and Russian textile workers, for
example, no monetary reinforcement was involved. For managers and organizations, this
is very important. Although managers, as part of high-involvement management, should
provide fair fi nancial compensation overall, they do not necessarily need to spend signifi –
cant amounts of money to improve performance.
Simulations
In some situations, an associate or manager may take a particular action with unclear con-
sequences.54 This happens when the effects of an action combine with the effects of other
factors in unpredictable ways. Suppose, for example, that a team leader brings pizza to
celebrate a week of high productivity. The team members express appreciation and appear
generally pleased with the gesture, but the appreciation is not overwhelming. The team
leader may conclude that having a pizza party is not worth the trouble. She may be cor-
rect, or she may be incorrect because other factors may have contributed to the situation.
At the time of the pizza party, a key member of the team was out caring for a sick parent.
In addition, rumors circulated among the team members that the new plant controller did
c04.indd 144c04.indd 144 12/08/10 10:45 AM12/08/10 10:45 AM
Training and Enhancing the Performance of Associates145
not embrace high-involvement management. Did these two factors affect the team’s reac-
tion to the pizza?
In this example, the team leader could discuss the situation with team members in
order to better understand their reactions. Other situations may be so complex that discus-
sions with team members may not be adequate. Consider the complex situation facing the
general manager at a Canadian curling club. He plans to increase the annual membership
fee to enhance profi ts. As shown in Exhibit 4-4, the annual fee does infl uence profi ts, but
the effects are not clear. On the one hand, increasing the annual fee has a positive effect
on revenue from membership fees because members who stay are paying more, and this in
turn has a positive effect on profi ts. On the other hand, increasing the annual fee puts up-
ward pressure on the cancellation rate among members and therefore downward pressure
on the total number of club members. As the number of club members declines, revenue
TOTAL
PROFIT
BAR B
FOOD
REVENUE
ICE RENTAL
REVENUE
NO. OF
RENTERS APPLICATION
RATE
NO. OF
CLUB
MEMBERS
MEMBERSHIP
REVENUE
RAFFLE
PROFIT CANCELLATION
RATE
ANNUAL
FEE
ALLOWED
WAGE COST
OF BAR B
FOOD SERVICE
COSTS
NO. OF
EMPLOYEES
QUALITY
OF SERVICE QUALITY
OF ICE
QUALITY OF MANAGEMENT
+
+
+
+
+
+
+
+
+
+
+
+
+++
+
+
+
+








Exhibit 4-4 Causal Relationships at a Sports Club
Note: A “�” between two variables indicates a direct, noninverse relationship. When the variable at the start of an
arrow exhibits an increase, there is upward pressure on the variable at the end of that arrow. When the variable at the
start exhibits a decrease, there is downward pressure on the variable at the end. A “�” between two variables indicates
an inverse relationship. When the variable at the start of an arrow exhibits an increase, there is downward pressure on
the variable at the end of that arrow. When the variable at the start exhibits a decrease, there is upward pressure on
the variable at the end.
Source: Reprinted by permission, R.D. Hall. 1983. “A Corporate System Model of a Sports Club: Using Simulation as
an Aid to Policy Making in a Crisis,” Management Science, 29 (1): 52–64, the Institute for Operations Research and
the Management Sciences (INFORMS), 901 Elkridge Landing Road, Suite 400, Linthicum, Maryland 21090-2909 USA.
c04.indd 145c04.indd 145 12/08/10 10:45 AM12/08/10 10:45 AM
146 Chapter Learning and Perception
is lost, which reduces profi ts. What actual effect, then, will an increase in the membership
fee have? Is the overall effect positive or negative? Perhaps an increase up to a point results
in more revenue from the members who stay than is lost from the members who leave. But
where is the point at which total revenue begins to decline? A further complication is that
factors other than the membership fee infl uence revenues and costs and profi ts.
In situations where a complex system of variables exists and we have some under-
standing of how the variables affect one another, a simulation may be a useful tool for
understanding the effects of a potential action. A simulation mimics the real system but
allows us to take one action at a time to understand its effects. In our curling club ex-
ample, the relationships among the variables shown in Exhibit 4-4 could be developed
into a simulation. If the manager of the club wanted to change the annual fee to affect
profi ts, he could implement various increases in this fee within the simulation to observe
the effects.
Although simulations are important and useful, they typically represent simplifi ed
models of reality. For this reason, and because some situations are too complex to be ac-
curately represented in simulations, some organizations prefer to substitute or augment
simulations with formal experimentation in the real world.55 The idea is to have associates
and managers try different approaches, even though some will no doubt fail to discover
which approach seems to work best under particular conditions. Such experimentation
has often been used in the development of technology for new products,56 and it has
also been used in areas such as setting the strategic direction of the organization.57 Bank
of America is one of many organizations that regularly conducts experiments.58 It has a
number of branches specifi cally designated for testing new ideas in décor, kiosks, service
procedures, and so on.
Learning from Failure
High-involvement fi rms often attempt to leverage their human capital in ways that will
enhance innovation.59 Accordingly, they often empower associates and managers to ex-
periment. In addition to the formal experimentation discussed earlier, these organizations
often promote informal and smaller-scale experimentation in almost all areas of organi-
zational life, ranging from a manager trying a new leadership style to an associate on the
assembly line trying a new method of machine setup. Such experimentation yields learn-
ing that otherwise would not occur. A manager’s leadership style may have been working
well, but trying a new style will provide him with information on the effectiveness of the
new style.
Experimentation, however, does not always result in success; by its nature, it often
produces failure. New approaches sometimes are less effective than old ways of doing
things. New product ideas sometimes are not attractive in the marketplace. Gerber Singles
(adult foods produced by the baby food company), Life-Savers Soda (carbonated bever-
ages produced by the candy maker), and Ben-Gay Aspirin (pain relievers produced by the
heating-rub company) are reasonable ideas that failed in the marketplace.60
The key is to learn from failure.61 A failure that does not result in learning is a mis-
take; a failure that results in learning is an intelligent failure. Intelligent failures are the
result of certain kinds of actions:62
• Actions are thoughtfully planned.
• Actions have a reasonable chance of producing a successful outcome.
simulation
A representation of a
real system that allows
associates and managers
to try various actions and
receive feedback on the
consequences of those actions.
c04.indd 146c04.indd 146 12/08/10 10:45 AM12/08/10 10:45 AM
Training and Enhancing the Performance of Associates147
EXPERIENCING ORGANIZATIONAL BEHAVIOR
This credo of the Ritz-Carlton Hotel Associates may seem simple. However, in order to
enact it, associates must go through
constant training of a quality that led
Training magazine to name the Ritz-
Carlton the number-one company for
employee training and development
in 2007. The Ritz-Carlton is known
for its exemplary service, which has
been recognized by two Malcolm
Baldrige National Quality Awards
and consistently high rankings in
travel periodicals of the world’s great-
est hotels. The Ritz-Carlton has 78 ho-
tels worldwide, with at least 14 other
projects underway; 38,000 associ-
ates work for the company.
All Ritz-Carlton associates are
expected to go for what the company
calls the “wow” factor by not only
meeting guests’ needs but also antici-
pating them. If you order your favorite
drink at a Ritz-Carlton in Hong Kong,
the bartender at the Ritz-Carlton in
New Orleans will know what you
want when you sit down at his bar.
Special room requests, such as M&Ms
in the minibar, will be met each time
someone visits a Ritz-Carlton without
the guest ever having to ask for the
favor. Special software makes such
anticipatory service doable. How-
ever, this type of service could never
be carried out without exceptional as-
sociate service performance.
In order to reach this performance
level, all associates go through con-
stant training throughout their careers
with the Ritz-Carlton. It all begins with
a two-day orientation session taught
by master trainers. However, training
does not stop there. New associates
go through at least 310 hours of train-
ing in their fi rst year, where they are
personally paired with a departmen-
tal trainer. They receive a training cer-
tifi cation, much like mastercraftsmen,
when they can demonstrate mastery
of their job. Reviews take place on
days 21 and 365.
New employees are not the
only associates who receive constant
training. All Ritz-Carlton associates
are trained continuously. Methods of
training include:
• Daily meetings, where all employ-
ees give and receive feedback
on what has been done right and
what has been done wrong. Time
is also spent discussing one of the
Ritz-Carlton’s 12 service values.
• On-the-job training by mentors
and training directors.
• Classroom training delivery.
• Good performance is clearly re-
warded either monetarily or by
verbal praise. Ritz-Carlton Associ-
ates are almost twice as likely as
other hotel associates to report
that they receive constructive feed-
back and are clearly rewarded.
Unlike many other companies,
the Ritz-Carlton also devotes a great
deal of time to evaluating their train-
ing programs, using knowledge tests,
performance appraisals, associate
and guest surveys, and quantitative
service-quality measures. Their train-
ing programs are responsible for the
fact that the Ritz-Carlton sets industry
standards for the total revenue per
hours worked, employee satisfaction,
low turnover rates, and customer sat-
isfaction. In fact, the Ritz-Carlton train-
ing methods are so successful that the
company began the Leadership Cen-
ter, which provides training to asso-
ciates, mostly senior managers, from
other companies.
“We Are Ladies and Gentlemen Serving
Ladies and Gentlemen”
Sources: http://corporate.ritzcarlton.com. Anonymous, “Ritz-Carlton: Redefi ning Elegance (No. 1 of the Training Top
125),”Training, Mar. 1, 2007, at http://www.trainingmag.com; Lampton, B. 2003. “My Pleasure,”ExpertMagazine.
com, Dec. 1, at http://www.expertmagazine.com; The Ritz-Carlton Hotel Company, L.L.C., “Application Summary for
the Malcolm Baldrige National Quality Award,” 2000, at http://corporate.ritzcarlton.com.; Ritz-Carlton Press Release
facts sheet. December, 2009, at http://corporate.ritzcarlton.com/en/Press/FactSheet.htm.
©
K
ei
th
B
ed
fo
rd
/T
he
N
ew
Y
or
k
Ti
m
es
/R
ed
ux
P
ic
tu
re
s
c04.indd 147c04.indd 147 12/08/10 10:45 AM12/08/10 10:45 AM
http://corporate.ritzcarlton.com

Training Magazine


http://www.expertmagazine.com
http://corporate.ritzcarlton.com.
http://corporate.ritzcarlton.com/en/Press/FactSheet.htm
148 Chapter Learning and Perception
• Actions are typically modest in scale, to avoid putting the entire fi rm or
substantial parts of it at risk.
• Actions are executed and evaluated in a speedy fashion, since delayed feedback
makes learning more diffi cult.
• Actions are limited to domains that are familiar enough to allow proper
understanding of the effects of the actions.
Firms serious about experimentation and intelligent failure create cultures that pro-
tect and nurture associates and managers willing to take calculated risks and to try new
things.63 Such cultures have visible examples of individuals who have been promoted even
after having failed in trying a new approach. Such cultures also have stories of associates
who have been rewarded for trying something new even though it did not work out. At
IDEO, a product design fi rm based in Palo Alto, California, the culture is built on the
idea that designers should “fail often to succeed sooner.”64 At 3-M, the global giant based
in St. Paul, Minnesota, the culture is built on the idea that thoughtful failure should not
be a source of shame.65
Learning from failure, OB Mod, and simulations are just three ways in which or-
ganizations can train associates. Many organizations, such as the Ritz-Carlton Hotel
Company, use multiple methods as evidenced in the Experiencing Organizational Behav-
ior feature. The Ritz-Carlton provides an excellent example of the strategic importance
of training and continuous employee learning. Although the Ritz-Carlton Hotel Com-
pany spends much more on associate training than its competitors, the company sees
payoff from its training on all important indicators. Customer satisfaction is higher and
associates work harder and turn over less frequently at the Ritz-Carlton than they do
at other hotels. This superb performance has led the Ritz-Carlton to win almost every
prestigious business and training award, while making it an exceptionally successful
company.
Perception
As we have shown in the preceding sections, associates and managers who can effectively
learn from experience, and help others to do so, contribute positively to an organization’s
human capital and therefore contribute positively to its capacity to develop sustainable
competitive advantage. To further develop the story of learning, we now turn to issues
of perception. If an associate or manager does not perceive people, tasks, and events ac-
curately, learning from experience is diffi cult. If an associate or manager does not perceive
the world accurately, he will base his behavior on inaccurate perceptions of the world rather
than on reality.
Associates and managers are constantly exposed to a variety of sensory inputs that
infl uence their perceptions. Sensory inputs refer to things that are heard, seen, smelled,
tasted, and touched. These inputs are processed in the mind and organized to form con-
cepts pertaining to what has been sensed or experienced. For instance, an associate in a
catering fi rm may sense a common item such as a loaf of bread. He touches it, squeezes it,
smells it, looks at its shape and color, and tastes it. His mind processes all of the sensory
inputs, and he forms ideas and attitudes about that loaf of bread and the bakery that pro-
duced it. He may determine that the bread is fresh or stale, good or bad, worth the price
or not, and may subsequently decide whether products of this particular bakery are to be
used. These are his perceptions of the bread and of the producer.
perception
A process that involves
sensing various aspects of
a person, task, or event
and forming impressions
based on selected inputs.
c04.indd 148c04.indd 148 12/08/10 10:45 AM12/08/10 10:45 AM
Perception 149
Perception comprises three basic stages:66
1. Sensing various characteristics of a person, task, or event. This stage consists of
using the senses (touch, sight, smell, and so on) to obtain data. Some data in the
environment, however, cannot be detected by the sensory organs. For example,
operators of the Three Mile Island nuclear facility, which almost melted down
in the 1970s, could not sense that a relief valve was stuck open in the nuclear
core because they could not see it and the instrument panel indicated that it was
closed.67 Some data, though accessible, are not sensed. Engineers and managers
with NASA and Morton Thiokol failed to sense certain features of their booster
rockets when considering whether to launch the ill-fated Challenger shuttle in
the 1980s.68
2. Selecting from the data those facts that will be used to form the perception. An
individual does not necessarily use all of the data that she senses. At times,
a person may be overloaded by information and unable to use all of it. For
example, U.S. Defense Department offi cials dealt with overwhelming amounts
of data from various sources with regard to the events of September 11 and the
confl ict in Iraq. At other times, a person may purposely exclude information that
is inconsistent with her other existing perceptions. A manager who fi rmly believes
an associate is a weak performer, for example, may discount and ultimately
exclude information suggesting otherwise.69 Accurate perception, however,
requires the use of all relevant information.
3. Organizing the selected data into useful concepts pertaining to the object or person.
An individual must order and sort data in a way that is useful in establishing
approaches to dealing with the world. We now explore this aspect of perception
in discussing perceptions of people.
Perceptions of People
Shortcomings in the ability to sense the full range of data, to select appropriate data for
further processing, and to organize the data into useful information can lead to inaccurate
perceptions about people.70 These erroneous perceptions in turn can interfere with learning
how to best interact with a person and can lead to poor decisions about and actions toward
the person. Effective associates and managers are able to develop complete and accurate
perceptions of the various people with whom they interact—customers, sales representa-
tives, peers, and so on. An effective manager, for example, knows when a sales representative
is sincere, when an associate has truly achieved superior performance, and when another
manager is dependable. These accurate perceptions are crucial to a fi rm’s human capital that
contributes to competitive advantage. Next, we discuss several factors that infl uence the
process of perceiving other people. These factors are shown in Exhibit 4-5.
The Nature of the Perceiver
The perception process is infl uenced by several factors related to the nature of the per-
ceiver. Impaired hearing or sight and temporary conditions such as those induced by alco-
hol or prescribed medications can, of course, affect perception. Beyond those challenges,
the most important factors are the perceiver’s familiarity with the other person, the per-
ceiver’s existing feelings about the other person, and the emotional state of the perceiver.
©Ron Galella/WireImage/Getty
Images, Inc.
©E.Neitzel/WireImage/Getty
Images, Inc.
c04.indd 149c04.indd 149 12/08/10 10:45 AM12/08/10 10:45 AM
150 Chapter Learning and Perception
Nature of Perceiver
Familiarity with the Other Person
Feelings Toward the Other Person
General Emotional State
Perception
of the
Person
Nature of theSituation
General Nature of the Other Person
Apparent Intentions of the Other Person
Consequences of the Interaction
Problems in
Person Perception
Implicit Person Theories
Halo Effect
Projecting
Stereotyping
Exhibit 4-5 Person
Perception
Familiarity with the person is important. On the one hand, an individual may have
more accurate perceptions of people with whom she has had a substantial history. Over
time, the individual has had many opportunities to observe those people. On the other
hand, an individual may pay more attention to newcomers, making extra efforts to notice
and process data about them.
If an individual has put a great deal of effort over time into properly understanding
certain people, she probably has developed accurate perceptions of their characteristics
and abilities. If, however, those characteristics and abilities change, or if the people act
in ways that are not consistent with their longstanding characteristics and abilities, the
perceiving individual may not accurately interpret the new characteristics or behaviors.
In this case, the perceiver may be too focused on existing beliefs about the friends and as-
sociates to accurately interpret new characteristics or behaviors. A manager who has had
an excellent, trusting relationship with an associate over many years may thus disregard
evidence of lying or poor performance because it does not fi t preexisting conceptions of
the person.71
An individual’s feelings about another person also may affect the perception process.
If the individual generally has positive feelings toward a particular person, he may view
the person’s actions through a favorable lens and thus may interpret those actions more
positively than is warranted. In contrast, if the individual generally has negative feelings
toward a particular person, he may view the person’s actions through an unfavorable lens
and thus interpret those actions more negatively than is warranted.
Research conducted at a large multinational fi rm provides evidence for these com-
monsense effects. In this research, 344 middle managers were rated by 272 superiors, 470
peers, and 608 associates. The feelings of the 1,350 raters were assessed through measures
of admiration, respect, and liking. Raters who had positive feelings toward a particular
ratee consistently rated his or her performance more leniently than they should have. Rat-
ers who had negative feelings rated performance too severely.72
An individual’s emotional state may also affect perceptions of others. If the individual
is happy and excited, she may perceive others as more exuberant and cheerful than they
really are. If the individual is sad and depressed, she may perceive others as more unhappy
than they really are or even as more sinister than they really are. For example, in one study,
c04.indd 150c04.indd 150 12/08/10 10:45 AM12/08/10 10:45 AM
Perception 151
several women judged photographs of faces after they had played a frightening game called
“Murder.” Those women perceived the faces to be more menacing than did women who
had not played the game.73
The Nature of the Situation
Factors present in a situation can affect whether an associate or manager senses important
information, and these factors can infl uence whether this information is used in percep-
tions. Relevant factors are numerous and varied. Three of them are discussed here: obvious
characteristics of the other person, the other person’s apparent intentions, and the conse-
quences of interactions with the person.
As previously discussed, an individual’s perceptions of another person can be infl u-
enced by his own internal states and emotions. In addition, the individual’s perceptions of
another person are affected by that person’s most obvious characteristics (those that stand
out). For instance, the perceiver is likely to notice things that are intense, bright, noisy,
or in motion. He is also likely to notice highly attractive and highly unattractive people,
people dressed in expensive clothes and those dressed in clothes refl ecting poor taste, and
bright, intelligent people or extremely dull-witted ones. He is less likely to notice normal
or average people. This effect on perceptions has been demonstrated in research.74
In organizations, extremely good and bad performers may be noticed more than av-
erage associates. Managers must be aware of this tendency because most associates are
average. Large numbers of associates may go unnoticed, unrewarded, and passed over for
promotions, even though they have the potential to contribute to a fi rm’s goals and to the
achievement of competitive advantage.
An individual’s perceptions may also be affected by the assumed intentions behind
another person’s actions. If, for example, assumed intentions are undesirable from the per-
ceiver’s point of view, the other person may be seen as threatening or hostile.75
Finally, an individual may be affected by the consequences of a single interaction with
another person. If the consequences are basically positive,
the individual is likely to perceive the other person favor-
ably. If, however, the results of the interaction are nega-
tive, the individual is more likely to view the other person
unfavorably.
In one study, a researcher’s accomplice was the only
member of a work group to fail on the assigned task. The
study included two conditions. In one condition, the ac-
complice’s failure prevented the other members from re-
ceiving payment for the task. This accomplice was per-
ceived unfavorably (as less competent, less dependable,
and less likable). In a second condition, the other members
received payment despite the accomplice’s failure. This ac-
complice was seen as being more competent, dependable,
and likable, even though the actual level of performance
was the same as the fi rst accomplice’s.76
Problems in Person Perception
The preceding discussion shows that perceiving others
accurately can be challenging. In fact, some of the most
©Tobi Corney/Getty Images, Inc.
c04.indd 151c04.indd 151 12/08/10 10:45 AM12/08/10 10:45 AM
152 Chapter Learning and Perception
noteworthy confl icts in organizations have been the result of misperceiving others. In a
well-known example involving Apple Computer, a midlevel manager in charge of dis-
tribution misperceived the character and motives of a manager in charge of one of the
manufacturing operations, resulting in a battle that was unnecessarily protracted.77 The
distribution manager almost resigned her job with the organization before realizing the
other manager was not committed to dismantling the existing distribution function. Be-
cause perceptions infl uence how associates and managers behave toward one another, it is
important to strengthen our understanding of the perceptual process so that our percep-
tions of others refl ect reality.
The perceptual process is infl uenced by factors associated with both the perceiver and
the general situation. The problems that prevent the formation of accurate perceptions
arise from factors that can be ordered into four general problem groups: implicit personal-
ity theories, halo effect, projecting, and stereotyping.
People hold implicit person theories,78 which are personal theories about what per-
sonality traits and abilities occur together and how these attributes are manifested in be-
havior. For example, if an associate notices that her colleague’s offi ce is brightly decorated
and messy, she may infer that this associate will be very talkative and outgoing because
her implicit personality theory states that messiness and extraversion go together.79 One
type of implicit personality theory that individuals hold concerns whether people believe
that personality traits and abilities are fi xed and unchangeable in people.80 Those who
believe that people cannot change are called entity theorists, while those who believe that
people’s attributes such as skills and abilities can change and develop are called incremental
theorists. Research has shown that managers who hold an entity theorist perspective are
less likely to help and coach their subordinates because they believe that their behavior is
unchangeable.81
The halo effect occurs when a person makes a general assessment of another person
(such as “good” or “bad”), and then uses this general impression to interpret everything
that the person does, regardless of whether the general impression accurately portrays the
behavior.82 With regard to the halo effect, if a person is perceived as generally “good,” a
manager or associate will tend to view the person in a positive way in any circumstance
or on any evaluative measure. Thus, if Marianne is perceived as being a generally “good”
person, she may be seen as an active, positive force in the organization’s culture even if
she is actually neutral in promoting a positive culture. If Ted is perceived as being a “bad”
person, he may be considered insolent and cunning even if he does not truly exhibit those
particular negative traits. In the many studies of this phenomenon, halo error has been
found in ratings given to job candidates, teachers, ice skaters, and others.83
Assuming that most other people have the same values and beliefs as we do is known
as projecting. For example, a production manager may think that lathe operators should
always check with her on important decisions. The production manager may also believe
that the lathe operators prefer this checking to making their own decisions. This may be
an inaccurate perception, however, and the lathe operators may complain about the need
to check with the manager. Obviously, falsely believing that other persons share our beliefs
can lead to ineffective behavior. Specifi c problems include overestimating consensus, un-
dervaluing objective assessments, and undervaluing those with opposing views.84
As already noted in Chapter 2, when an individual has preconceived ideas or percep-
tions about a certain group of people, stereotyping can occur. When the individual meets
someone who is obviously a member of a particular group, he may perceive that person as
implicit person theories
Personal theories about
what personality traits and
abilities occur together and
how these attributes are
manifested in behavior.
halo effect
A perception problem in
which an individual assesses
a person positively or
negatively in all situations
based on an existing general
assessment of the person.
projecting
A perception problem in
which an individual assumes
that others share his or
her values and beliefs.
stereotyping
A perception problem
in which an individual
bases perceptions about
members of a group on a
generalized set of beliefs
about the characteristics of
a group of individuals.
c04.indd 152c04.indd 152 12/08/10 10:46 AM12/08/10 10:46 AM
Perception 153
having the general characteristics attributed to the group rather than perceiving the person
as an individual with a unique set of characteristics.85 For example, a manager may perceive
union members (a group) to be strong, assertive troublemakers. When she meets John,
a union member, she perceives him to be a troublemaker simply because he is a union
member. This type of perceptual problem is commonly found among managers who deal
ineffectively with union leaders, associates who deal ineffectively with members of the other
gender, and associates who deal ineffectively with members of other ethnic groups.
To fully leverage its human assets, an organization must have associates and managers
who respect one other and appreciate the unique characteristics of each person. Stereotyp-
ing can interfere with these outcomes. Effective, productive interactions require accurate
perceptions of people, and stereotypes are frequently incorrect, for two reasons. First, the
stereotyped characteristics of a group may simply be wrong. Erroneous stereotypes may re-
sult from a number of factors, such as fear of a group and contact with only a select subset
of a group. Obviously, when the stereotype itself is inaccurate, applying the stereotype to
an individual can only result in error. Second, even if stereotyped characteristics of a group
are generally correct, any given individual within the group is unlikely to have all, or even
most, of the characteristics attributed to the group.
One basis for stereotyping individuals is their physical attractiveness. Elysa Yanowitz
was fi red by L’Oreal USA, Inc. for not fi ring a Macy’s saleswoman who was “not good look-
ing enough.”86 A company executive said, “Get me somebody hot” for the job. Annette
McConnell, a sales company employee who weighed 300 pounds, was told by a manager
that “they were going to lay me off because people don’t like buying from fat people.”87 It
is well documented that people associate those who are physically attractive with positive
qualities and those who are unattractive with negative qualities.88 Thus, perceptions of a
person’s attractiveness and/or weight can infl uence how they are evaluated on the job and
even how much they get paid.89 For example, overweight women were found to earn 7
to 30 percent less than normal-weight women performing at the same level in the same
jobs.90 Such bias, while usually not illegal, is strategically unsound for organizations. Bias
of this type means that organizations are making less-than-optimal decisions about how
to use their human capital.91 Furthermore, such unfair treatment can be demoralizing and
stressful and may lead associates to perform at less-than-optimal levels.92 In some cases,
such as the L’Oreal case, such treatment can lead to charges of sex discrimination when
men and women are held to different attractiveness standards.93 As discussed in Chapter 2,
such cases are extremely costly for organizations, not to mention the individuals involved.
Self-Perception
It is widely recognized that perceptions of others have important consequences, but an
individual’s perception of self may have important consequences as well. Individuals who
perceive themselves as highly competent are likely to try new approaches to tasks and
perhaps be more productive than their peers. Self-confi dence is a powerful force. In an
examination of lower-level managers, self-perceptions of competence were found to play a
signifi cant role in task performance.94
Attributions of Causality
As individuals consider the behavior of others, they will perceive that actions have various
causes. Different people, however, may see the same behavior as being caused by different
c04.indd 153c04.indd 153 12/08/10 10:46 AM12/08/10 10:46 AM
154 Chapter Learning and Perception
factors. For example, suppose two people observe someone busily working at a task. Both
may conclude that he is being positively reinforced for the task, but they may disagree
about the nature of the reinforcement. One of the observers may believe that the person
is making diligent efforts “because the boss is looking and smiling,” whereas the other
observer may believe the efforts are caused by the satisfaction inherent in doing the task.
As evidenced in the Experiencing Organizational Behavior section, Pilot Long inaccurately
concluded that Ken Good’s lack of knowledge about how to radio was due to a general
lack of knowledge, and thus, later ignored his expert advice about their location. He could
have concluded that Ken Good’s lack of knowledge about the radio was simply due to his
not knowing the correct password. The process of deciding what caused the behavior is
known as attribution.95
Internal–External Attribution
A person’s behavior is often interpreted as having been caused by either internal factors
(such as personality, attitudes, and abilities) or external factors (such as organizational
EXPERIENCING ORGANIZATIONAL BEHAVIOR
Flight SEA04GA192 took off from Glacier National Park air-port on September 20, 2004.
On board were fi ve people, includ-
ing pilot Jim Long, 60; Chief of Party,
Ken Good, 58; and forestry scientists
Davita Bryant, 32; Matthew Ramige,
29; and Jodee Hogg, 23. They were
heading for Schafer Meadows, an air-
strip in 1.5 million acres of Montana
wilderness. They were heading out to
collect forestry data for the U.S. For-
est Service. The weather that day was
horrible, with low clouds obscuring
mountain peaks. Flight SEA04GA192
never reached her destination. Two
days later, only two of the crew mem-
bers barely survived, Matthew Ramige
and Jodee Hogg. The rest of the crew
lay dead at the site of the plane crash
in the Great Bear Wilderness.
The weather, which had ham-
pered visibility, led pilot Long to
abandon the planned fl ight course.
The plane fl ew into a boxed canyon
with mountain walls on three sides
and no way out. At the last minute,
Long attempted to turn out of the can-
yon and crashed into the side of the
mountain. Pilot Long and forestry sci-
entist Bryant were killed at the time of
the crash. Ken Good died at the crash
site the following morning. The next
day, Ramige and Hogg walked out
of the canyon by themselves, without
being rescued. They were found two
days later when they reached civiliza-
tion. Thus, apart from the disaster of
the crash, there was also the failure of
the search team to fi nd the survivors.
While weather seems the most
obvious cause of this problem, closer
examination reveals that human error,
based on a lack of learning and mis-
guided perceptions, played a role in
this disaster. Based on recollections
of survivors Hogg and Ramige, there
was confusion between pilot Long
and Chief of Party Good when the
plane ran into trouble. When trying
to call in the plane’s location, Good
was unable to do so.
“Ken tried to radio in and Jim—I think
Jim ended up actually making the
radio because Ken didn’t know the
code word. … [H]e looked at Jim
and said, What’s your number? …
He’s like, Okay, How do you do
it? And Jim’s like, Here. Just let me
do it. And Ken is like, I really want
to do it, blah, blah, blah. …”
Furthermore, while Good had
superior knowledge of the area,
Long failed to take his advice, possi-
bly because he did not know how to
Great Bear Wilderness Crash
©
A
P/
W
id
e
W
or
ld
P
ho
to
s
c04.indd 154c04.indd 154 12/08/10 10:46 AM12/08/10 10:46 AM
Perception 155
resources, luck, and uncontrollable infl uences). When making these internal–external at-
tributions, we depend to a great extent on our perceptions of the consistency, consensus,
and distinctiveness associated with the behavior.
• Consistency is the extent to which the same person behaves in the same manner in
the same situation over time (he returns from lunch late every day).
• Consensus is the degree to which other people in the same situation behave in the
same manner (everyone returns from lunch late).
• Distinctiveness is the degree to which the same person tends to behave differently
in other situations (he returns from lunch late every day but does not come to
work late in the morning or leave work early at night).96
As shown in Exhibit 4-6, when we see a person’s behavior as high in consistency, low
in consensus, and low in distinctiveness, we tend to attribute that behavior to internal fac-
tors. If the behavior is low in consistency, high in consensus, and high in distinctiveness,
we tend to attribute the behavior to external factors. If the behavior is perceived as having
call in their location. Thus, he attrib-
uted Long’s inability to use the radio
as being due to his general lack of
knowledge, and may have assumed
he didn’t know about anything. In-
deed, right before the crash, pilot
Long had radioed in a wrong posi-
tion, after arguing with Good about
it. Clearly, if these two men had been
able to learn from each other, this di-
saster may have been avoided. Fur-
thermore, Long was a retired chemist,
who had very little experience fl ying
in this type of terrain and certainly
under these weather conditions. He
just did not have the experience to
handle the crisis situation.
A second tragic aspect of this dis-
aster is that the search party arrived
at the site of the accident the next
day, September 21, after searching
the wrong location. They surveyed
the crash site and declared that
there were no survivors, when in fact
Hogg and Ramige had left the site
after realizing that the search plane
fl ying overhead had not seen them.
Rather than looking for the survivors,
it was just assumed that they were
dead and that their bodies had been
burned in the plane crash. Search ef-
forts were canceled and the families
were notifi ed that their loved ones
had perished. When asked to explain
how they had made this mistake,
the searchers blamed the survivors,
rather than their own misreading of
the scene. They stated, “There were
no footprints leaving the site, no piled
rocks, no written message—nothing
indicating anyone had survived or left
the area.” Clearly, they had failed to
learn from their error and engaged in
making self-serving bias attributions
for their failure to rescue the survivors.
In the end, learning, or lack of
it, played a big role in this disaster.
If Long and Good had been willing
or able to learn from each other, the
crash may have been avoided. If the
search team were more accurate in
their perceptions, Ken Good’s life
may have been saved and Jodee
Hogg and Matthew Ramige would
not have had to suffer for two days
in the bitter cold wilderness while se-
verely wounded.
Sources: W.S. Becker, & M.J. Burke. 2008. “Shared decision making in a wilderness aviation accident.” In M. Burke
(Chair), Shared Decision Making in Singular Events. Symposium at the 2008 Annual Meeting of the Academy of
Management, Anaheim, California; W.S. Becker. 2007. “Missed Opportunities: The Great Bear Wilderness Disas-
ter,“ Organizational Dynamics, 36; 363–376.; National Transportation Safety Board (NTSB. (2005). Aircraft Accident
Report: SEA04GA192, Essex, MT, September 20, 2004. Washington, D.C. Probable Cause and Narrative Report; U.S.
Department of Agriculture Forest Service (USFS) (2005). Accident Investigation Factual Report. Press Release FS-025A
USDA Forest Service, 9/23/2004.
c04.indd 155c04.indd 155 12/08/10 10:46 AM12/08/10 10:46 AM
156 Chapter Learning and Perception
a mixed profi le (such as high in consistency and high in distinctiveness with consensus
being neutral), we often are biased toward internal attributions.
Studies have highlighted many situations in which internal and external attributions play
major roles in attitudes and behavior. For example, one study suggests that unemployment
counselors and their clients are infl uenced by these attributions in contrasting ways. On the
one hand, unemployed persons are at the greatest risk for mental depression when they be-
lieve their situation is caused by uncontrollable external factors. The less control we perceive
ourselves to have over events, the more likely we are to become despondent. On the other
hand, a counselor is more likely to help an unemployed person if she sees that the unemploy-
ment is caused by uncontrollable external factors. If the counselor has attributed the cause of
a client’s unemployment to an internal factor (such as poor attitude or low motivation), she is
less likely to be helpful.97 Interestingly, researchers suggest that, in general, observers tend to
overestimate the impact of internal causes on other people’s behavior and underestimate the
effect of external causes. This general tendency is called the fundamental attribution error.98
Attributions of Success and Failure
Monitoring and responding to poor performance are important tasks for managers and, in
high-involvement organizations, for associates as well. To respond appropriately, managers
must accurately assess the cause of any poor performance they observe. If they are unable
to accurately identify the cause, individuals could suffer or benefi t unjustly. Unfortunately,
several troublesome attributional tendencies play a role.
First, the fundamental attribution error has an effect, although it may be minor. This
error causes managers to attribute the behavior of others to internal factors. Thus, an
individual’s poor performance may have an external cause, but a manager may attribute
it to an internal cause. For example, equity fund managers who perform poorly are often
subjected to unfair criticism from those above them in the fi rm. Although skill is involved,
fund-manager performance is often determined by uncontrollable factors.
Second, the self-serving bias plays a role, and it often has a signifi cant effect on at-
tributions. This bias works as follows. We have a strong tendency to attribute our own
successes to internal factors (a high level of skill or hard work) and our own failures to
fundamental attribution
error
A perception problem in
which an individual is too
likely to attribute the behavior
of others to internal rather
than external causes.
self-serving bias
A perception problem in which
an individual is too likely to
attribute the failure of others
to internal causes and the
successes of others to external
causes, whereas the same
individual will be too likely
to attribute his own failure to
external causes and his own
successes to internal causes.
External
High
Low
Distinctiveness
Individual
Behavior
Internal
External
High
Low
Consensus
Internal
Internal
High
Low
Consistency
ExternalExhibit 4-6
Attribution Theory
c04.indd 156c04.indd 156 12/08/10 10:46 AM12/08/10 10:46 AM
Perception 157
external causes (a diffi cult task or bad luck). Conversely, we tend to attribute someone
else’s success to external factors and someone else’s failures to internal factors. We saw this
bias at work when the rescue team in the Great Bear Wilderness case blamed the survivors
for the team’s failure to recognize that there had been survivors.
The fundamental attribution error and the self-serving bias work together to
produce a signifi cant bias toward assessments of internal causation for poor perform-
ance.99 This bias means that managers and others make evaluation errors more often
than they should. Was the Three Mile Island nuclear disaster in the late 1970s a func-
tion of several unforeseeable events coming together unexpectedly or a function of
simple operator error? Operators received much of the blame, but it is not clear that
they deserved it.100 Are failures of new ventures typically a function of uncontrollable
market developments or the missteps of entrepreneurs? Entrepreneurs receive much of
the blame from venture capitalists,101 but they may not deserve as much blame as they
receive.
Task Perception
As we have described, perceptions of people and their behavior are created in subjective
ways. Similarly, perceptions of tasks develop through subjective and sometimes idiosyn-
cratic processes. Factors such as intelligence, age, and gender have been found to infl u-
ence perceptions of tasks. One study, for example, found that individuals with higher
levels of intelligence perceive more complexity in various tasks than individuals with
lower levels of intelligence.102 In addition, many studies have found that individuals
with higher levels of satisfaction in the workplace perceive more autonomy and variety
in their tasks than individuals with lower levels of satisfaction. In a study focused on
THE STRATEGIC LENS
O rganizations compete on the basis of their resources. The strongest organizations usu-
ally win the competitive battles if their
managers develop effective strategies
and implement them well. To be com-
petitive, managers use the organiza-
tion’s resources to create capabilities
to act.107 A critical component of
these capabilities is knowledge. In
fact, Bill Breen of Fast Company sug-
gests that “Companies compete with
their brains as well as their brawn.
Organizations today must not only
outgun and outhustle competitors,
they must also outthink them. Compa-
nies win with ideas.”108
Given the importance of knowl-
edge in gaining a competitive advan-
tage, learning is critical to organiza-
tional success. Managers and associ-
ates must continuously learn if they
are to stay ahead of the competition.
Perception is a key component of
learning. It is particularly important to
top executives, as they must carefully
and thoroughly analyze their organi-
zation’s external environment, with
special emphasis on competitors. If
they do not perceive their environment
correctly, these executives may formu-
late ineffective strategies and cause
the organization to lose its competi-
tive advantage. Understanding the
concepts of learning and perception,
then, is absolutely essential to the ef-
fective operation of an organization.
Critical Thinking Questions
1. How does the knowledge held by
managers and associates affect the
performance of an organization?
2. What are some important ways
in which associates can learn and
thereby enhance their stock of knowl-
edge? What role does perception
play in the learning process?
3. What are the connections between
learning, perception, and organi-
zational strategies?
c04.indd 157c04.indd 157 12/08/10 10:46 AM12/08/10 10:46 AM
158 Chapter Learning and Perception
past graduates of a Hong Kong university, satisfaction and job perceptions were assessed
multiple times over a two-year period. Satisfaction was found to infl uence job percep-
tions to a greater extent than job perceptions were found to infl uence satisfaction.103
How managers and associates perceive their jobs has important implications for be-
havior and outcomes. Task perceptions have been linked to intrinsic motivation as well
as job performance.104 They have even been linked to mood.105 One group of researchers
proposed that employees fi rst perceive their jobs at an information level, then perceive the
tasks at an evaluative level, and thereafter react to their jobs behaviorally and emotion-
ally.106 The process of task perception and the resulting effects on behavior have important
consequences for organizations. We explore these issues in greater depth in Chapter 6.
What This Chapter Adds to Your
Knowledge Portfolio
In this chapter, we have discussed basic learning principles and described how they can
be used in effectively training and developing associates and managers. We have discussed
problems that can occur in complex learning situations and how these problems can be
avoided. Finally, we have seen many problems associated with perception processes. For
individuals to function as effectively as possible, these perception issues must be under-
stood and managed. At a more detailed level, we have covered the following points:
• Learning is the process by which we acquire new, relatively permanent, behav-
iors from experience. Operant conditioning theory and social learning theory
are important explanations for how learning from experience works in practice.
Learning new behaviors involves three basic elements: the situation, the behav-
ioral response to the situation, and the consequences of that response for the
person.
• Positive reinforcement involves the presentation of positive consequences for a
behavior, such as praise for working hard, which increases the probability of an
individual repeating the behavior in similar settings. Negative reinforcement is
the removal of a negative consequence following a behavior, such as taking an
employee off probation, which also increases the probability of an individual
repeating the behavior. Punishment involves the presentation of negative conse-
quences, such as a reduction in pay, which reduces the probability of repeating a
behavior. Extinction refers to the removal of all reinforcing consequences, which
can be effective in eliminating undesired behaviors.
• Various schedules of reinforcement exist for learning, including continuous re-
inforcement and several types of intermittent schedules. Although continuous
schedules are rare in organizational settings, several applications of intermit-
tent schedules can be found. Strategic use of reinforcement schedules helps in
effectively shaping the behavior of newcomers and modifying the behavior of
current associates and managers.
• In addition to direct reinforcement or punishment, individuals also learn by an-
ticipating potential outcomes associated with certain behaviors and by modeling
similar or important others.
• Self-effi cacy is an important condition for learning to occur. Other important condi-
tions are that people know why they are learning what they are learning, that they
c04.indd 158c04.indd 158 12/08/10 10:46 AM12/08/10 10:46 AM
Thinking About Ethics 159
can tie the material to be learned to their
own previous experiences, that they have
the opportunity to practice, and that they
receive feedback.
• People learn through many formal and
informal mechanisms in organizations.
Three examples are OB Mod programs,
simulations, and learning from failure.
• Perception refers to the way people view
the world around them. It is the process
of receiving sensory inputs and organiz-
ing these inputs into useful ideas and
concepts. The process consists of three
stages: sensing, selecting, and organizing.
• Person perception is infl uenced by several
factors associated with the nature of the
perceiver, including the perceiver’s famil-
iarity with the person, feelings toward
the person, and general emotional state.
Situational factors infl uencing person
perception include the general nature of
the other person, that person’s apparent
intentions, and the anticipated or actual
consequences of the interaction between
perceiver and perceived.
• Four general perceptual problems are implicit person theories, halo effect, project-
ing, and stereotyping. Implicit person theories are individuals’ beliefs about the
nature of human personality and attributes that can infl uence how they perceive
other people. Halo effect is similar but involves having a general impression of
a person and allowing it to affect perceptions of all other aspects of the person.
Projecting is the tendency to believe that other people have characteristics like our
own. Stereotyping occurs when we have generalized perceptions about a group
that we apply to an individual who belongs to that group.
• Attribution refers to the process by which individuals interpret the causes of be-
havior. Whether behavior is seen as resulting from internal or external forces is
infl uenced by three factors: distinctiveness, consistency, and consensus. Beyond
these factors, there is a general tendency to attribute someone else’s failures to
internal causes.
Thinking about Ethics
1. Should associates be punished for making mistakes? If so, for what types of mistakes should they
be punished? Are there mistakes for which they should not be punished? If so, what are they?
2. Should all associates be given the opportunity to learn new skills? If not, explain. Should some
associates have greater learning opportunities than others? If so, when should this occur?
3. Are there circumstances when it is acceptable to use perceptual stereotypes of others? Explain
why or why not.
?back to the knowledge objectives
1. Explain the difference between negative reinforcement
and punishment. Give examples of how each process
might be used by managers with their associates.
2. What are four intermittent schedules of reinforcement?
Give an example of how each schedule might be used
by managers with their associates.
3. Explain how an instructor might effectively apply OB
Mod in the classroom.
4. What can an organization do to promote learning from
failure?
5. What can organizations do to train people to deal with
complex and novel problems?
6. What are implicit person theories and the halo effect?
How can an individual overcome a tendency to make
these mistakes?
7. Give an example of a situation in which you attributed
someone’s behavior to internal or external factors.
What infl uenced the attribution?
c04.indd 159c04.indd 159 12/08/10 10:46 AM12/08/10 10:46 AM
160 Chapter Learning and Perception
4. Are accurate perceptions always necessary? In what situations (if any) is it less important to
ensure that perceptions are accurate?
5. You are a manager of a unit with 15 associates. These associates have varying levels of
education (high school to college-educated) and varying levels of skills and motivation. In your
organization, associates receive higher pay for acquiring new and valuable skills. How would
you decide to whom you would give learning opportunities and to whom you would not
provide such opportunities?
Key Terms
learning, p. 133
operant conditioning
theory, p. 134
social learning theory, p. 134
positive reinforcement, p. 135
negative reinforcement, p. 135
punishment, p. 135
extinction, p. 136
continuous reinforcement,
p. 138
intermittent reinforcement,
p. 138
self-effi cacy, p. 140
OB Mod, p. 142
simulation, p. 146
perception, p. 148
implicit person theories,
p. 152
halo effect, p. 152
projecting, p. 152
stereotyping, p. 152
fundamental attribution
error, p. 156
self-serving bias, p. 156
building your human capital
Assessment of Approaches Used to Handle Diffi cult
Learning Situations
Associates and managers often face diffi culties in learning from experience. When there is little
opportunity to learn from experience and when experience is unclear, individuals at all levels in an
organization may draw the wrong conclusions. Interestingly, individuals vary in how they handle
these situations. Some are prone to contemplate major issues alone. Others tend to discuss major
issues with others. Both approaches can be useful, but extremes in either direction may be risky.
In this installment of Building Your Human Capital, we present an assessment tool focused on ap-
proaches to handling diffi cult learning situations.
Instructions
In this assessment, you will read 12 phrases that describe people. Use the rating scale below to in-
dicate how accurately each phrase describes you. Rate yourself as you generally are now, not as you
wish to be in the future, and rate yourself as you honestly see yourself. Keep in mind that very few
Human Resource Management Applications
Training is usually carried out with the human resource management (HRM) function. In addition
to conducting the actual training, the HRM department may also conduct a needs analysis to
determine what type of training is needed and by whom and follow through with an evaluation of
the training. It may be the HRM department’s responsibility to make sure that the organization
realizes a fi nancial and/or performance return on their investment of training dollars.
Many companies also offer outside learning opportunities for their associates. For example,
some companies may pay for college tuition or reimburse expenses for adult learning classes. This
type of learning opportunity is often viewed as a benefi t of employment, and the HRM function
involves developing such benefi t plans.
c04.indd 160c04.indd 160 12/08/10 10:46 AM12/08/10 10:46 AM
An Organizational Behavior Moment 161
people have extreme scores on all or even most of the items (a “1” or a “5” is an extreme score);
most people have midrange scores for many of the items. Read each item carefully, and then circle
the number that corresponds to your choice from the rating scale.
1 2 3 4 5
Not at all
like me
Somewhat
unlike me
Neither like
nor unlike me
Somewhat
like me
Very much
like me
1. Spend time refl ecting on things. 1 2 3 4 5
2. Enjoy spending time by myself. 1 2 3 4 5
3. Live in a world of my own. 1 2 3 4 5
4. Enjoy my privacy. 1 2 3 4 5
5. Don’t mind eating alone. 1 2 3 4 5
6. Can’t stand being alone. 1 2 3 4 5
7. Do things at my own pace. 1 2 3 4 5
8. Enjoy contemplation. 1 2 3 4 5
9. Prefer to be alone. 1 2 3 4 5
10. Have point of view all my own. 1 2 3 4 5
11. Don’t like to ponder over things. 1 2 3 4 5
12. Want to be left alone. 1 2 3 4 5
Scoring Key for Approaches to Handling Diffi cult Learning Situations
To create your score, combine your responses to the items as follows:
Private refl ection �(Item 1 � Item 2 � Item 3 � Item 4 � Item 5 � Item 7 � Item 8
� Item 9 � Item 10 � Item 12) � (12 � (Item 6 � Item 11))
Scores can range from 12 to 60. Scores of 50 and above may be considered high, while scores of
22 and below may be considered low. Other scores are moderate. High scores suggest that a person
prefers to spend time alone considering major issues (high private refl ection). Such a person spends
quality quiet time considering the possibilities. Low scores suggest that a person prefers to talk
through problems with others (low private refl ection). This type of person spends time exchanging
information and viewpoints with others.
Additional Task
Think of a time when you faced a major problem with no clear answer. Did you handle the situ-
ation mostly by thinking alone, mostly by consulting with others, or with a mix of these two ap-
proaches? How effective was your approach? Explain.
Source of the Assessment Tool: International Personality Item Pool (2001). A Scientifi c Collaboration for the Development
of Advanced Measures of Personality Traits and Other Individual Differences, at http://ipip.ori.org.
an organizational behavior moment
It’s Just a Matter of Timing
Teresa Alvarez ate dinner slowly and without enthusiasm. Mike,
her husband of only a few months, had learned that Teresa’s “blue
funks” were usually caused by her job. He knew that it was best to
let her work out the problem alone. He excused himself and went
to watch TV. Teresa poked at her dinner, but the large knot in her
stomach kept her from eating much.
She had been very excited when Vegas Brown had ap-
proached her about managing his small interior decorating fi rm.
c04.indd 161c04.indd 161 12/08/10 10:46 AM12/08/10 10:46 AM
http://ipip.ori.org
162 Chapter Learning and Perception
At the time, she was a loan offi cer for a local bank and knew Vegas
through his fi nancial dealings with the bank. As Vegas explained
to her, his biggest problem was in managing the fi rm’s fi nancial
assets, mostly because the fi rm was undercapitalized. It was not a
severe problem, he assured her. “Mostly,” he had said, “it’s a cash
fl ow problem. We have to be sure that the customers pay their
accounts in time to pay our creditors. With your experience, you
should be able to ensure a timely cash fl ow.”
Teresa thought this was a good opportunity to build her
managerial skills, since she had never had full responsibility for a
company. It also meant a substantial raise in salary. After explor-
ing the opportunity with Mike, she accepted the job.
During her fi rst week with Vegas, she discovered that the
fi nancial problems were much more severe than he had led her
to believe. The fi rm’s checking account was overdrawn by about
$40,000. There was a substantial list of creditors, mostly compa-
nies that sold furniture and carpeting to the fi rm on short-term
credit. She was astonished that this fi nancial position did not seem
to bother Vegas.
“All you have to do, Teresa, is collect enough money each
day to cover the checks we have written to our creditors. As you’ll
see, I’m the best sales rep in the business, so we have lots of money
coming in. It’s just a matter of timing. With you here, we should
turn this problem around in short order.”
Teresa, despite her misgivings, put substantial effort into the
new job. She worked late almost every day and began to realize
that it was more than simple cash-fl ow timing. For example, if
the carpet layers made an error or if the furniture came in dam-
aged, the customer would refuse to pay. This would mean that the
customer’s complaint must be serviced. However, the carpet lay-
ers disliked correcting service complaints, and furniture reorders
might take several weeks.
Thus, Teresa personally began to examine all customer or-
ders at crucial points in the process. Eventually, this minimized
problems with new orders, but there remained a large number of
old orders still awaiting corrections.
Teresa also arranged a priority system for paying creditors
that eased some fi nancial pressures in the short run and that
would allow old, noncritical debts to be repaid when old cus-
tomer accounts were repaid. After six months, the day arrived
when the checking account had a zero balance, which was sub-
stantial progress. A few weeks later, it actually had a $9,000 posi-
tive balance. During all this time Teresa had made a point of
concealing the fi nancial status from Vegas. But with the $9,000
positive balance, she felt elated and told Vegas.
Vegas was ecstatic, said she had done a remarkable job, and
gave her an immediate raise. Then it was Teresa’s turn to be ec-
static. She had turned a pressure-packed job into one of prom-
ise. The future looked exciting, and the fi nancial pressures had
developed into fi nancial opportunities. But that was last week.
This morning Vegas came into Teresa’s offi ce and asked
her to write him a check for $30,000. Vegas said everything was
looking so good that he was buying a new home for his family
($30,000 was the down payment). Teresa objected violently. “But
this will overdraw our account by $21,000 again. I just got us out
of one hole, and you want to put us back in. Either you delay the
home purchase or I quit. I’m not going to go through all the late
nights and all the pressure again because of some stupid personal
decision you make. Can’t you see what it means for the business
to have money in the bank?”
“No, I can’t!” Vegas said sternly. “I don’t want to have money
in the bank. It doesn’t do me any good there. I’ll just go out and
keep selling our services, and the money will come in like always.
You’ve proved to me that it’s just a matter of timing. Quit if you
want, but I’m going to buy the house. It’s still my company, and
I’ll do what I want.”
Discussion Questions
1. What did Teresa learn?
2. Other than quitting, what can Teresa do to resolve the
problem? What learning and perception factors should she
consider as she analyzes the situation?
3. If you were an outside consultant to the fi rm, could you rec-
ommend solutions that might not occur to Teresa or Vegas?
What would they be?
team exercise
Best Bet for Training
Management-development programs are expensive. When organizations are determining which of
several managers to send to these programs, they must evaluate each person. Some of the criteria
considered might be whether the manager has the ability to learn, whether the manager and the
organization will benefi t, and whether a manager is moving into or has recently moved into a new
position. The purpose of this exercise is to evaluate three potential candidates for developmental
training, thus gaining insight into the process.
c04.indd 162c04.indd 162 12/08/10 10:46 AM12/08/10 10:46 AM
Endnotes 163
The exercise should take about 20 minutes to complete and an additional 15 to 20 minutes to
discuss. The steps are as follows.
1. Read the following case about High Tech International.
2. Assemble into groups of four.
3. List the criteria you should consider for determining which of the three managers to send to
the training program.
4. Choose the manager to send using the criteria developed in step 3.
5. Reassemble. Discuss your group’s choice with the rest of the class, and listen to other groups’
choices and criteria. Do you still prefer your group’s choice? Why or why not?
6. The instructor will present additional points for consideration.
High Tech International
High Tech International has reserved one training slot every other year in an off-site leadership-
development program. The program emphasizes personal and professional assessment and requires
six days of residency to complete. High Tech’s vice president for human resources must choose the
manager to attend the next available program, which is to be run in three months. The cost of the
program is high, including a tuition fee of $7,500, round-trip airfare, and lodging. The challenge is
to choose the individual who has the greatest capacity to learn from the assessment and apply that
learning back in the organization. Because of prior commitments and ongoing projects, the list of
nominees has been narrowed to three:
• Gerry is slated for a major promotion in four months from regional sales manager to vice
president for marketing. Her division has run smoothly during the past three years. Antici-
pating the move upward, she has asked for training to increase her managerial skills. Gerry
is to be married in two months.
• John was a supervisor over a portion of a production process for two years before being pro-
moted one year ago to manager of the entire process. His unit has been under stress for the
past eight months due to the implementation of new technology and a consequent decline
in productivity and morale. No new technological changes are planned in John’s unit for at
least another year.
• Bill has been considered a “fast-tracker” by his colleagues in the organization. He came to the
company four years ago, at the age of 37, as a vice president for foreign operations. Histori-
cally, this position has been the stepping stone for division president. In the past year, Bill
has displayed less energy and enthusiasm for the work. Eight months ago Bill and his wife
separated, and two months ago he was hospitalized temporarily with a mild heart problem.
For one month twice a year Bill has to travel abroad. His next trip will be in four months.
Endnotes
1. Hitt, M.A., Bierman, L., Shimizu, K., & Kochhar, R. 2001.
Direct and moderating effects of human capital on strategy and
performance in professional service fi rms: A resource-based per-
spective. Academy of Management Journal, 44: 13–28; Sirmon,
D.G., Hitt, M.A., & Ireland, R.D. 2007. Managing resources in
dynamic environments to create value: Looking inside the black
box. Academy of Management Review, 32, 273–292.
2. Gange, R.M., & Medsker, K.L. 1996. The conditions of learning.
Fort Worth, TX: Harcourt-Brace.
3. Luthans, F., & Stajkovic, A.D. 1999. Reinforce for performance:
The need to go beyond pay and even performance. Academy of
Management Executive, 13(2): 49–57.
4. Thorndike, E.L. 1898. Animal intelligence. Psychological Review,
2: all of issue 8; Thorndike, E.L. 1911. Animal intelligence: Ex-
perimental studies. New York: Macmillan.
5. Hull, C.L. 1943. Principles of behavior. New York: D. Apple-
ton Century; Skinner, B.F. 1969. Contingencies of reinforce-
ment: A theoretical analysis. Englewood Cliffs, NJ: Prentice
Hall.
6. Bandura, A. 1996. Social foundations of thought and action: A so-
cial cognitive theory. Englewood Cliffs, NJ: Prentice Hall; Kreit-
ner, R., & Luthans, F. 1984. A social learning theory approach
to behavioral management: Radical behaviorists “mellowing out.”
Organizational Dynamics, 13 (2): 47–65.
c04.indd 163c04.indd 163 12/08/10 10:46 AM12/08/10 10:46 AM
164 Chapter Learning and Perception
7. Podsakoff, P.M., Bommer, W.H., Podsakoff, N.P., & MacKenzie,
S.B. 2006. Relationships between leader reward behavior and
punishment behavior and subordinate attitudes, perceptions, and
behaviors: A meta-analytic review of existing and new research.
Organizational Behavior and Human Decision Processes, 99: 113–142.
8. Trevino, L.K., 1992. The social effects of punishment in organiza-
tions: A justice perspective. Academy of Management Review, 17:
647–676.
9. Strupp, J. 2000. No providence in Rhode Island. Editor and Pub-
lisher, 133 (11): 6–8.
10. Friedman, S. 1994. Allstate faces suit over Fireman’s Fund Shoot-
ing. National Underwriter, 98 (39): 3.
11. Guffey, C.J., & Helms, M.M. 2001. Effective employee disci-
pline: A case of the Internal Revenue Service. Public Personnel
Management, 30: 111–127.
12. Ibid.
13. Hitt, M.A., Lee, H., & Yucel, E. 2002. The importance of social
capital to the management of multinational enterprises: Rela-
tional networks among Asian and western fi rms. Asia Pacifi c Jour-
nal of Management, 19: 353–372.
14. Hinkin, T.R., & Schreisheim, C.A. 2004. “If you don’t hear from
me you know you are doing fi ne”: The effects of management
nonresponse to employee performance. Cornell Hotel and Restau-
rant Administration Quarterly, 45: 362–373.
15. Latham, G.P., & Huber, V. 1992. Schedules of reinforcement:
Lessons from the past and issues for the future. Journal of Organi-
zational Behavior Management, 12(1): 125–149.
16. Scott, W.E., & Podsakoff, P.M. 1985. Behavioral principles in the
practice of management. New York: John Wiley & Sons.
17. Ibid.
18. Ibid.
19. Ibid.
20. Ibid.
21. Bandura, A. 1986. Social foundations of thought and action. Eng-
lewood Cliffs, NJ: Prentice Hall; Bandura, A. 2001. Social cogni-
tive theory: An agentic perspective. Annual Review of Psychology,
52: 1–26.
22. Stajkovic, A.D., Luthans, F., & Slocum, J.W., Jr. 1998. Social cogni-
tive theory and self-effi cacy: Going beyond traditional motivational
and behavioral approaches. Organizational Dynamics, 26: 62–74.
23. Ibid.
24. Bandura, Social foundations of thought and action.
25. Wexley, K.N, & Latham, G.P. 2002. Developing and training hu-
man resources in organizations (3rd ed.). Upper Saddle River, NJ:
Prentice Hall.
26. Bandura, A. 1997. Self-effi cacy: The exercise of self-control. New
York: W.H. Freeman.
27. Judge, T.A., & Bono, J.E. 2001. Relationship of core self-evalua-
tions traits, self-esteem, generalized self-effi cacy, locus of control
and emotional stability with job satisfaction and job performance:
A meta-analysis. Journal of Applied Psychology, 86: 80–93; Judge,
T.A., Jackson, C.L., Shaw, J.C., Scott, B.A., & Rich, B.L. 2007.
Self-effi cacy and work-related performance: The integral role of
individual differences. Journal of Applied Psychology, 92: 107–127;
Stajkovic, A.D., & Luthans, F. 1998. Social cognitive theory and
work-related performance: A meta-analysis. Psychological Bulletin,
124: 240–261.
28. Noe, R.A. 1999. Employee training and development. Boston: Ir-
win McGraw-Hill.
29. Colquitt, J., Lepine, J., & Noe, R.A. 2000. Toward an integrative
theory of training motivation: A meta-analytic pat analysis of 20
years of research. Journal of Applied Psychology, 85: 678–707.
30. Burke, M.J., Bradley, J., & Bowers, H.N. 2003. Health and safety
programs. In J.E. Edwards, J. Scott, & N.S. Raju (Eds.), The hu-
man resources-evaluation handbook. Thousand Oaks, CA: Sage, pp.
429–446.
31. Noe, Employee training and development.
32. Burke, M.J., Holman, D., & Birdi, K. 2006. A walk on the
safe side: The implications of learning theory for developing
effective safety and health training. In G.P. Hodgkinson, &
J.K. Ford (Eds.), International review of industrial and organi-
zational psychology, vol. 21. Hoboken, NJ: John Wiley & Sons,
pp. 1–44.
33. Weill, S., & McGill, I. 1989. Making sense of experiential learning.
Buckingham, UK: SRHE/OU Press.
34. Kolb, D.A. 1984. Experiential learning: Experience as the source of
learning and development. Englewood Cliffs, NJ: Prentice Hall.
35. Ford, J.K., Smith, E.M., Weissbein, D.A., Gully, S.M., & Salas,
E. 1998. Relationships of goal orientation, metacognitive mem-
ory, and practice strategies with learning outcomes and transfer.
Journal of Applied Psychology, 83: 218–233.
36. Kluger, A.N., & DeNisi, A.S. 1996. The effects of feedback inter-
ventions on performance: Historical review, a meta-analysis and
a preliminary feedback intervention theory. Psychological Bulletin,
119:254–284.
37. Ibid.
38. Bandura, A. 1977. Social learning theory. Englewood Cliffs, NJ:
Prentice Hall.
39. Mann, R.B., & Decker, P.J. 1984. The effect of key behavior
distinctiveness on generalization and recall in behavior modeling
training. Academy of Management Journal, 27: 900–910.
40. Sidman, M. 1962. Operant techniques. In A.J. Bachrach (Ed.), Ex-
perimental foundations of clinical psychology. New York: Basic Books.
41. Tichy, N.M. 2001. No ordinary boot camp. Harvard Business Re-
view, 79(4): 63–70.
42. Fickes, M. 2000. Taking driver training to new levels. Waste Age,
31 (4): 238–248.
43. Robertson, G. 2001. Steering true: Greyhound’s training is weed-
ing-out process. Richmond Times-Dispatch, May 14: B1, B3.
44. Wexley & Latham, Developing and training human resources in
organizations.
45. Luthans, F., & Kreitner, R. 1975. Organizational behavior modifi –
cation. Glenview, IL: Scott & Foresman; Luthans, F., & Kreitner,
R. 1985. Organizational behavior modifi cation and beyond. Glen-
view, IL: Scott & Foresman.
46. Frederiksen, L.W. 1982. Handbook of organizational behavior
management. New York: John Wiley & Sons.
47. Luthans, F., & Davis, E. 1991. Improving the delivery of quality
service: Behavioral management techniques. Leadership and Or-
ganization Development Journal, 12(2): 3–6.
c04.indd 164c04.indd 164 12/08/10 10:46 AM12/08/10 10:46 AM
Endnotes 165
48. Nordstrom, R., Hall, R.V., Lorenzi, P., & Delquadri, J. 1988.
Organizational behavior modifi cation in the public sector. Journal
of Organizational Behavior Management, 9 (2): 91–112.
49. Welsh, D.H.B., Luthans, F., & Sommer, S.M. 1993. Manag-
ing Russian factory workers: The impact of U.S.-based behav-
ioral and participatory techniques. Academy of Management
Journal, 36: 58–79; Welsh, D.H.B., Luthans, F., & Sommer,
S.M. 1993. Organizational behavior modifi cation goes to Rus-
sia: Replicating an experimental analysis across cultures and
tasks. Journal of Organizational Behavior Management, 13 (2):
15–35.
50. Stajkovic, A.D., & Luthans, F. 1997. A meta-analysis of the ef-
fects of organizational behavior modifi cation on task perform-
ance, 1975–95. Academy of Management Journal, 5: 1122–1149.
51. Ibid.
52. Schneier, C.J. 1974. Behavior modifi cation in management.
Academy of Management Journal, 17: 528–548.
53. Stajkovic & Luthans, A meta-analysis of the effects of organiza-
tional behavior modifi cation on task performance, 1975–95.
54. Levitt, B., & March, J.G. 1988. Organizational learning. Annual
Review of Sociology, 14: 319–340.
55. Thomke, S. 2001. Enlightened experimentation: The new
imperative for innovation. Harvard Business Review, 79 (2):
66–75.
56. Thomke, S.H. 1998. Managing experimentation in the design of
new products. Management Science, 44: 743–762.
57. Nicholls-Nixon, C.L., Cooper, A.C., & Woo, C.Y. 2000. Strate-
gic experimentation: Understanding change and performance in
new ventures. Journal of Business Venturing, 15: 493–521.
58. Thomke, S. 2003. R&D comes to service: Bank of America’s path-
breaking experiments. Harvard Business Review, 81(4): 70–79.
59. Pfeffer, J. 1998. The human equation. Boston: Harvard Business
School Press.
60. Master, M. 2001. Spectacular failures. Across the Board, 38 (2):
20–26.
61. McGrath, G. 1999. Falling forward: Real options reasoning and
entrepreneurial failure. Academy of Management, 24: 13–30; Sit-
kin, S.B. 1992. Learning through failure: The strategy of small
losses. Research in Organizational Behavior, 14: 231–266.
62. Sitkin, Learning through failure.
63. Shimizu, K., & Hitt, M.A. 2004. Strategic fl exibility: Managerial
capability to reverse poor strategic decisions. Academy of Manage-
ment Executive, 18, 44–59.
64. Thomke, Enlightened experimentation.
65. Ibid.
66. Robinson, H. 1994. Perception. New York: Routledge.
67. Perrow, C. 1984. Normal accidents: Living with high-risk technolo-
gies. New York: Basic Books.
68. Tufte, E.R. 1997. Visual and statistical thinking: Displays of evi-
dence for making decisions. Cheshire, CT: Graphics Press.
69. Einhorn, H.J., & Hogarth, R.M. 1978. Confi dence in judg-
ment: Persistence in the illusion of validity. Psychological Review,
85: 395–416; Wason, P.C. 1960. On the failure to eliminate hy-
potheses in a conceptual task. Quarterly Journal of Experimental
Psychology, 20: 273–283.
70. Bierhoff, H.-W. 1989. Person perception. New York: Springer-
Verlag; Heil, J. 1983. Perception and cognition. Berkeley: Univer-
sity of California Press.
71. Jacobs, R., & Kozlowski, S.W.J. 1985. A closer look at halo error in
performance ratings. Academy of Management Journal, 28: 201–212.
72. Tsui, A.S., & Barry, B. 1986. Interpersonal affect and rating er-
rors. Academy of Management Journal, 29: 586–599.
73. Murray, H.A. 1933. The effects of fear upon estimates of the ma-
liciousness of other personalities. Journal of Social Psychology, 4:
310–329.
74. See, for example, Assor, A., Aronoff, J., & Messe, L.A. 1986. An
experimental test of defensive processes in impression formation.
Journal of Personality and Social Psychology, 50: 644–650.
75. Berkowitz, L. 1960. Repeated frustrations and expectations in
hostility arousal. Journal of Abnormal and Social Psychology, 60:
422–429.
76. Jones, E.E., & deCharms, R. 1957. Changes in social perception
as a function of the personal relevance of behavior. Sociometry, 20:
75–85.
77. Jick, T., & Gentile, M. 1995. Donna Dubinsky and Apple Com-
puter, Inc. (Part A). Boston: Harvard Business School Publishing.
78. Mehl, M.R., Gosling, S.D., & Pennebaker, J.W. 2006. Personal-
ity in its natural habitat: Manifestations and implicit folk theories
of personality in daily life. Journal of Personality and Social Psychol-
ogy, 90: 862–877.
79. Gosling, S.D., Ko, S.J., Mannarelli, T., & Morris, M.E. 2002. A
room with a cue: Personality judgments based on offi ces and bed-
rooms. Journal of Personality and Social Psychology, 82: 379–398.
80. Dweck, C.S. 1999. Self-theories: Their role in motivation, personal-
ity, and development. Philadelphia, PA: Psychology Press.
81. Heslin, P.A., Vandewalle, D., & Latham, G.P. 2006. Keen to
help: Managers’ implicit person theories and their subsequent
employee coaching. Personnel Psychology, 59: 871–902.
82. Guilford, J.P. 1954. Psychometric methods. New York: McGraw-Hill.
83. Becker, B.E., & Cardy, R.L. 1986. Infl uence of halo error on
appraisal effectiveness: A conceptual and empirical reconsidera-
tion. Journal of Applied Psychology, 71: 662–671; Jacobs, R., &
Kozlowski, S.W.J. 1985. A closer look at halo error in performance
ratings. Academy of Management Journal, 28: 201–212; Nisbett,
R.D., & Wilson, T.D. 1977. The halo effect: Evidence for un-
conscious alteration of judgments. Journal of Personality and Social
Psychology, 35: 250–256; Solomon, A.L., & Lance, C.E. 1997. Ex-
amination of the relationship between true halo and halo error in
performance ratings. Journal of Applied Psychology, 82: 665–674.
84. Gross, R.L., & Brodt, S.E. 2001. How assumptions of consensus
undermine decision making. Sloan Management Review, 42(2):
86–94.
85. See, for example, Finkelstein, L.M., & Burke, M.J. 1998. Age stere-
otyping at work: The role of rater and contextual factors on evalua-
tion of job applicants. Journal of General Psychology, 125: 317–345.
86. “L’Oreal to Ask S.C. to Review Ruling on the Firing of Unat-
tractive Worker,” Metropolitan New Enterprise, Apr. 14, 2003, at
http://www.metnews.com.
87. Tahmincioglu, E. (Jan. 26, 2007) It’s Not Easy for Obese Work-
ers, MSNBC.com, at http://www.msnbc.msn.com.
c04.indd 165c04.indd 165 12/08/10 10:46 AM12/08/10 10:46 AM
http://www.metnews.com
http://www.msnbc.msn.com
166 Chapter Learning and Perception
88. Dion K., Berscheid, E., & Walster, E. (1972). What is beau-
tiful is good. Journal of Personality and Social Psychology, 24:
285–290.
89. Hosoda, M., Stone-Romero, E.F., & G. Coats. 2003. The effects
of physical attractiveness on job-related outcomes: A meta-anal-
ysis of experimental studies. Personnel Psychology, 26: 431–462;
Rudolph, C.W., Wells, C.L., Weller, M.D., Baltes, B. 2009. A
meta-analysis of empirical studies of weight-based bias in the
workplace. Journal of Vocational Behavior, 74: 1–10.
90. Fikkan, J., & Rothblum, E. 2005. Weight bias in employment.
In K.D. Brownell, R.M. Puhl, M.B. Schwartz, & L. Rudd (Eds.),
Weight bias: Nature, consequences, and remedies (pp. 15-28). New
York: The Guilford Press.
91. Dipboye, R.L., & Colella, A. 2005. Discrimination at work: The
psychological and organizational bases. Mahwah, NJ: Lawrence
Erlbaum Associates.
92. Ibid.
93. Corbett, W.R. 2007. The ugly truth about appearance discrimi-
nation and the beauty of our employment discrimination law.
Duke Journal of Gender Law and Policy, 14: 153–175.
94. McEnrue, M.P. 1984. Perceived competence as a moderator of
the relationship between role clarity and job performance: A test
of two hypotheses. Organizational Behavior and Human Perform-
ance, 34: 379–386.
95. Heider, F. 1958. The psychology of interpersonal relations. New
York: John Wiley & Sons.
96. Kelley, H.H., & Michela, J. 1981. Attribution theory and re-
search. Annual Review of Psychology, 31: 457–501.
97. Young, R.A. 1986. Counseling the unemployed: Attributional is-
sues. Journal of Counseling and Development, 64: 374–377.
98. Harvey, J.H., & Weary, G. 1984. Current issues in attribution
theory and research. Annual Review of Psychology, 35: 428–432.
99. Mitchell, T.R., & Green, S.G. 1983. Leadership and poor per-
formance: An attributional analysis. In J.R. Hackman, E.E.
Lawler, & L.W. Porter (Eds.), Perspectives on behavior in organiza-
tions. New York: McGraw-Hill.
100. Perrow, Normal accidents: Living with high risk technologies.
101. Ruhnka, J.C., & Feldman, H.D. 1992. The “Living Dead” phe-
nomenon in venture capital investments. Journal of Business Ven-
turing, 7: 137–155.
102. Ganzach, Y., & Pazy, A. 2001. Within-occupation sources of vari-
ance in incumbent perception of complexity. Journal of Occupa-
tional and Organizational Psychology, 74: 95–108.
103. Wong, C., Hui, C., & Law, K.S. 1998. A longitudinal study of
the perception–job satisfaction relationship: A test of the three
alternative specifi cations. Journal of Occupational and Organiza-
tional Psychology, 71: 127–146.
104. Hackman, J.R., Oldham, G., Janson, R., & Purdy, K. 1975. A
new strategy of job enrichment. California Management Review,
17(4): 57–71.
105. Saavedra, R., & Kwun, S.K. 2000. Affective states in job char-
acteristic theory. Journal of Organizational Behavior, 21 (Special
Issue): 131–146.
106. Slusher, E.A., & Griffi n, R.W. 1985. Comparison processes in
task perceptions, evaluations, and reactions. Journal of Business
Research, 13: 287–299.
107. Simon, D., Hitt, M.A., & Ireland, D. 2007. Managing resources
in dynamic environments to create value. Academy of Management
Review, 32:273–292.
108. Breen, B. 2004. Hidden asset. Fast Company, March: 93.
c04.indd 166c04.indd 166 12/08/10 10:46 AM12/08/10 10:46 AM
?knowledge objectives
After reading this chapter, you should be able to:
1. Defi ne personality and explain the basic nature of
personality traits.
2. Describe the Big Five personality traits, with par-
ticular emphasis on the relationship with job per-
formance, success on teams, and job satisfaction.
3. Discuss specifi c cognitive and motivational con-
cepts of personality, including locus of control and
achievement motivation.
4. Defi ne intelligence and describe its role in the
workplace.
5. Defi ne an attitude and describe how attitudes are
formed and how they can be changed.
6. Discuss the role of emotions in organizational
behavior.
5
personality,
intelligence, attitudes,
and emotions
exploring behavior in action
I Know She’s Smart and Accomplished . . .
But Does She Have “Personality”?
Answer “true” or “false” to the following questions:
It’s maddening when the court lets guilty criminals go free.
Slow people irritate me.
I can easily cheer up and forget my problems.
I am tidy.
I am not polite when I don’t want to be.
I would like the job of a race car driver.
My teachers were unfair to me in school.
I like to meet new people.
The way you answer these questions, or similar
items, could determine whether you get the job or not.
These questions are examples of the types found on per-
sonality tests commonly used to hire people for jobs.
One survey found that over 30 percent of employers use
some form of personality test when hiring employees.
Another survey found that 29 percent of adults aged 18
to 24 took a personality test in the past two years in order
to be considered for a job. One of the largest testing
companies, Unicru (now a part of Kronos), tested over
11 million candidates in one year for companies such as
Universal Studios. Personality testing has taken the em-
ployment fi eld by storm. Employers are no longer relying
only on stellar resumes and amazing experience, they also
care about whether an applicant has the right tempera-
ment to carry out the job and fi t in with the organization.
“Although personality-based testing has been around for
years, it’s now in the spotlight,” said Bill Byham, CEO of
c05.indd 167c05.indd 167 12/08/10 10:46 AM12/08/10 10:46 AM
168
Development Dimensions International, a consulting fi rm
that is a leader in the personality testing fi eld.
So, what are the right answers? That depends on
what the employer is looking for. Common things that
employers look for are conscientiousness, ability to handle
stress, ability to get along with others, potential leadership,
problem-solving style, and
service orientation. Differ-
ent employers look for dif-
ferent personality profi les,
and often it depends on the
job being sought.
For example, Karen
Schoch, who hires employ-
ees for Women & Infants
Hospital of Rhode Island,
states, “A person must be
qualifi ed to do the job, but
they also require the right
personality. We’re a hos-
pital that puts a premium
on patient care, and we want people who can deliver the
concept.” Thus, she looks for people who have a blend of
compassion, diplomacy, energy, and self-confi dence.
Harbor Group LLC, a Houston fi nancial advisory fi rm,
examines dominance, infl uence, steadiness, and consci-
entiousness to predict how its associates will handle stress.
David Hanson, a founding principal at First Harbor, states
“Stress can result in lower productivity, increased absentee-
ism, tardiness, and high employee turnover.” Thus, it is im-
portant for his company to identify how people deal with
stress so that they can develop ways to counteract the effects
of stress.
Southwest Airlines, a company well known for its re-
laxed, fun culture, takes creating a relaxed, warm environ-
ment on its fl ights seriously. To accomplish this goal, South-
west Airlines carefully screens job applicants to ensure that
only individuals with personalities and attitudes consistent
with the desired culture are hired. Libby Sartain, former
vice president of the People Department at Southwest, put
it this way: “If we hire people who don’t have the right
attitude, disposition, and behavioral characteristics to fi t
into our culture, we will start to change that culture.” Herb
Kelleher, former CEO, has said, “We look for attitudes;
people with a sense of humor who don’t take themselves
too seriously. We’ll train you on whatever it is you have to
do, but the one thing Southwest cannot change in people
is inherent attitudes.” Thus,
Southwest tests people for
kindness and creativity.
These four organiza-
tions all have different cul-
tures and work environ-
ments. Therefore, they all
look for different personal-
ity traits in new employees.
The extent to which the
personality of associates fi ts
with an organization’s cul-
ture has been found to have
a positive impact on both
associates and the organiza-
tion, and personality testing is one way to make sure that
employees have the right disposition to mesh with the or-
ganization’s culture. This emphasis on cultural fi t is found
in many high-involvement organizations, where identifying
and selecting individuals who complement a carefully de-
veloped and maintained culture is a highlyimportant task.
One example of a company that has used personal-
ity testing to directly impact its bottom line is Outback
Steakhouse. Personality testing helped Outback to identify
applicants who would fi t the fi rm’s needs. Better hiring
decisions resulted in growth in revenues and higher prof-
its over time. As a result, associate turnover was reduced
by 50 percent, decreasing the company’s recruitment and
training costs by millions of dollars. A popular and valid
personality test is the Hogan Personality Inventory (HPI).
Using this test in employee selection led to 50 percent
reduced turnover in a retail company, 48 percent im-
proved productivity in an insurance company, decreased
accidents resulting in lost time among hospital workers,
and an increase of $308,000.00 per year in sales in a bank.
Sources: “Why is Personality Testing Important to Recruitment,” January 12, 2010, at http://www.hoganassessments.com/_
hoganweb/documents/Why%20Personality%20Testing%20is%20Important%20to%20Recruitment.pdf; A.E. Cha. 2005. “Employ-
ers Relying on Personality Tests to Screen Applicants,” Washington Post, Mar. 27, p. A01; A. Overholt. 2002. “True or False: You’re Hiring
the Right People,” Fast Company, Issue 55, Jan. p. 110; S.B. Fink. 2006. “Getting Personal: 10 Reasons to Test Personality Before Hir-
ing,” Training, Issue 43, Nov. p. 16; V. Knight. 2006. “Personality Tests as Hiring Tools,” Wall Street Journal (Eastern Edition), Mar. 15,
©iStockphoto
c05.indd 168c05.indd 168 12/08/10 10:46 AM12/08/10 10:46 AM
http://www.hoganassessments.com/_hoganweb/documents/Why%20Personality%20Testing%20is%20Important%20to%20Recruitment.pdf
http://www.hoganassessments.com/_hoganweb/documents/Why%20Personality%20Testing%20is%20Important%20to%20Recruitment.pdf
169
Sources: (continued from page 168) p. B3A; B. Dattner. 2004. “Snake Oil or Science? That’s the Raging Debate on Personality Test-
ing,” Workforce Management, Issue 83 (10), Oct., p. 90, accessed at www.workforce3.com, Mar. 2007; E. Frauenheim. 2006. “The
(Would Be) King of HR Software,” Workforce Management, Issue 85 (15), Aug. 14, pp. 34–39, accessed at www.workforce3.com,
Mar. 2007; www.kronos.com, accessed Mar. 2007; K. Brooker. 2001. “The Chairman of the Board Looks Back,” Fortune 143, no. 11:
62–76; R. Chang. 2001. “Turning into Organizational Performance,” Training and Development 55, no. 5: 104–111; K. Ellis. 2001.
“Libby Sartain,” Training 38, no. 1: 46–50; L. Ellis. 2001. “Customer Loyalty,” Executive Excellence 18, no. 7: 13–14; K. Freiberg &
J. Freiberg. 1996. Nuts!: Southwest Airlines’ Crazy Recipe for Business and Personal Success (Austin, TX: Bard Press); K. Freiberg &
J. Freiberg. 2001. “Southwest Can Find Another Pilot,” Wall Street Journal (Eastern Edition), Mar. 26, p. A22; H. Lancaster. 1999.
“HerbKelleher Has One Main Strategy: Treat Employees Well,” Wall Street Journal (Eastern Edition), Aug. 31, p. B1; S.F. Gale. 2002.
“Three Companies Cut Turnover with Tests,” Workforce 81, no. 4: 66–69.
The discussion of personality testing
in Exploring Organizational Behavior
in Action illustrates how important it is
for organizations to select the right in-
dividuals. Everyone has individual dif-
ferences that cannot be easily changed.
As Herb Kelleher mentioned above,
organizations can train people to do
only so much; there are individual dif-
ferences in people that are not easily
infl uenced. In this chapter we explore
three such differences: personality, intel-
ligence, and emotions. We also explore
another individual difference: attitudes
that can be more easily affected by
one’s organizational experience. All of
these human attributes infl uence organi-
zational effectiveness by infl uencing as-
sociates’ performance, work attitudes,
motivation, willingness to stay in the or-
ganization, and ability to work together
in a high-involvement environment.
In Chapter 1, we stated that an
important part of high-involvement work
systems was that organizations engage
in selective hiring, illustrating the impor-
tance of hiring people with the right set
of attributes. A great deal of research has
been done that has shown that certain
traits, such as conscientiousness1 and
intelligence,2 are related to associates’
performance. Associates’ traits have also
been linked to how likely they will be to
engage in counterproductive work be-
havior, such as being frequently absent or
stealing.3 In addition to traits directly af-
fecting performance, the degree to which
associates’ traits fi t the work environment
and culture is also linked with how sat-
isfi ed and committed associates are to
their organization4 and how likely they
will be to remain in the organization.5
Furthermore, the attributes of top leaders
in the organization have a direct impact
on organizational functioning by relating
to the group dynamics among top deci-
sion makers6 and the strategic decisions
they make.7 Thus, the individual traits
and attitudes of everyone in the organi-
zation can have an important impact on
the functioning of that organization.
Because personalities have such
important effects on behavior in organi-
zations, care must be taken in adding
new people. For a manufacturing fi rm
emphasizing stable, effi cient operations
because it competes on the basis of low
cost, hiring newcomers who are serious,
conscientious, and emotionally stable is
logical. For a manufacturing fi rm com-
peting on the basis of frequent process
and product innovations, hiring new-
comers who embrace change and are
inquisitive is important. Furthermore, as
you will learn in this chapter, it is critical
to hire associates who fi t the characteris-
tics of the particular jobs they will hold.
Inside the same fi rm, personalities suit-
able for the tasks required in sales may
be less suitable for the tasks involved in
research and development. Although
personality, intelligence, attitudes, and
emotions are not perfect predictors of
job performance and should never be
used alone in selection decisions, they
are important.
In this chapter, we open with a
discussion of fundamentals of personal-
ity, including its origins and the degree
to which it changes over time. Building
on this foundation, we examine a ma-
jor personality framework, the Big Five,
that has emerged as the most useful for
understanding workplace behaviors.
Next, we discuss several cognitive and
motive-based characteristics of person-
ality not explicitly included in the major
framework. Next, we examine intel-
ligence, another individual difference
that has become a controversial topic in
employee selection. We then move on to
an exploration of attitudes, including at-
titude development and change as well
as several important types of workplace
attitudes. Finally, we address emotions
and their role in organizations.
the strategic importance of Personality, Intelligence, Attitudes, and Emotions
c05.indd 169c05.indd 169 12/08/10 10:46 AM12/08/10 10:46 AM
www.workforce3.com
www.workforce3.com
www.kronos.com
170 Chapter 5 Personality, Intelligence, Attitudes, and Emotions
Fundamentals of Personality
The term personality may be used in several ways. One common use—or, rather,misuse—
of the word is in describing the popularity of our classmates or colleagues. We may think
that Hank has a pleasant personality or that Susan is highly personable. In your high-
school yearbook, someone was probably listed with the title of Mr. or Ms. Personality.
When personality is used in this way, it means that person is popular or well liked. This
meaning has little value, however, in understanding or predicting behavior. To know that
some people are popular does not enable us to have a rich understanding of them, nor does
it improve our ability to interact with them.
For our purposes, personality describes a person’s most striking or dominant
characteristics—jolly, shy, domineering, assertive, and so on. This meaning of personality
is more useful because a set of rich characteristics tells us much about the behavior we can
expect a person to exhibit and can serve as a guide in our interactions with her.
More formally, personality is a stable set of characteristics representing the internal
properties of an individual, which are refl ected in behavioral tendencies across a variety
of situations.8 These characteristics are often referred to as “traits” and have names such as
dominance, assertiveness, and neuroticism. More important than the names of personality
traits, however, is the meaning given to them by psychologists. The traditional meaning of
personality traits rests on three basic beliefs:
1. Personality traits are individual psychological characteristics that are relatively
enduring—for example, if a person is introverted or shy, he or she will likely
remain so for a long period of time.
2. Personality traits are major determinants of one’s behavior—for example, an
introverted person will be withdrawn and exhibit nonassertive behavior.
3. Personality traits infl uence one’s behavior across a wide variety of situations—an
introverted person will be withdrawn and nonassertive at a party, in class, in
sports activities, and at work.
Some researchers and managers have criticized these traditional beliefs about person-
ality traits, believing instead that personality can undergo basic changes. They believe,
for example, that shy people can become more assertive and outgoing. Furthermore, by
examining our own behaviors, we may learn that sometimes we behave differently from
situation to situation. Our behavior at a party, for example, may be different from our
behavior at work.
Still, we often can observe consistencies in a person’s behavior across situations. For
example, many people at various levels of Scott Paper saw Al Dunlap act in hard-hearted
ways and exhibit outbursts of temper when he served this company as CEO. Many in-
dividuals at Sunbeam, where he next fi lled the CEO role, observed the same behaviors.
Apparently, family members also experienced similar treatment. When Dunlap was fi red
by the board of directors at Sunbeam, his only child said, “I laughed like hell. I’m glad he
fell on his … .”9 His sister said, “He got exactly what he deserved.”10
Determinants of Personality Development
To properly understand personality, it is important to examine how it develops. Both
heredity and environment play important roles in the development of personality.
personality
A stable set of characteristics
representing internal
properties of an individual,
which are refl ected in
behavioral tendencies across
a variety of situations.
c05.indd 170c05.indd 170 12/08/10 10:46 AM12/08/10 10:46 AM
Fundamentals of Personality 171
Heredity
From basic biology, we know that parents provide genes to
their children. Genes in turn determine height, hair color,
eye color, size of hands, and other basic physical charac-
teristics. Similarly, genes seem to infl uence personality, as
demonstrated in three different types of studies.
The fi rst type of study involves examinations of identi-
cal twins. Identical twins have identical genes and should
therefore have similar personalities if genes play an impor-
tant role. Moreover, if genes infl uence personality, identical
twins separated at birth should have more similar adult per-
sonalities than regular siblings or fraternal twins who have
been raised apart. This is precisely the case, as has been found
in a number of studies.11 Consider identical twins Oskar
and Jack, who were parented by different people. Oskar was
raised in Germany by his Roman Catholic maternal grand-
mother, whereas Jack was raised outside Germany by his
Jewish father. As adults, however, both of the brothers were
domineering, prone to anger, and absentminded.12
The second type of study involves assessments of new-
borns. Because newborns have had little exposure to the
world, the temperaments they exhibit—including their
activity levels, adaptability, sensitivity to stimulation, and general disposition—are probably
determined to a large degree by genetics. If newborn temperament in turn predicts personality
later in life, a link between genes and personality is suggested. Several studies have provided
evidence for this relationship. In one such study, newborns ranging in age from 8 to 12 weeks
were tracked into adult life. Temperament in the early weeks of life was found to predict per-
sonality later in life.13
The third type of study supporting genetic effects focuses directly on genes. In sev-
eral studies, researchers have identifi ed distinct genes thought to infl uence personality.
Gene D4DR serves as a useful example. This gene carries the recipe for a protein known
asdopamine receptor, which controls the amount of dopamine in the brain. Dopamine is
crucial because it seems to affect initiative and adventure-seeking. Individuals with a long
version of the gene, where a key sequence of DNA repeats itself six or more times, are
more likely to be adventure-seeking than individuals with a short version of the gene.14
Although genes clearly play an important role in personality, we must be careful not
to overemphasize their effects. Researchers typically believe that 50 percent of adult per-
sonality is genetically determined. Furthermore, we should not conclude that a single
magical gene controls a particular aspect of personality. The best information currently
available suggests that combinations of genes infl uence individual personality traits.15 For
example, gene D4DR plays an important role in how much adventure a person desires, but
other genes also affect this trait.
Environment
Beyond genes, the environment a person experiences as a child plays an important role
in personality. In other words, what a child is exposed to and how she is treated infl uence
the type of person she becomes. Warm, nurturing, and supportive households are more
©Siri Stafford/Getty Images, Inc.
c05.indd 171c05.indd 171 12/08/10 10:46 AM12/08/10 10:46 AM
172 Chapter 5 Personality, Intelligence, Attitudes, and Emotions
likely to produce well-adjusted, outgoing individuals.16 Socioeconomic circumstances of
the household may also play a role, with favorable circumstances being associated with
value systems that promote hard work, ambition, and self-control.17 Events and experi-
ences outside the home can also affect personality. Schools, churches, and athletic teams
are important places for lessons that shape personality.
Although research suggests that personality is reasonably stable in the adult years,18
events and experiences later in life can affect personality. Reports have described, for exam-
ple, how a heart attack survivor reaches deep inside to change himself. In addition, some
psychological theories suggest that change may occur over time. One theory proposes a
model of personality that includes possible transitions at various points in life, including
infancy, early childhood, late childhood, the teenage years, early adulthood, middle adult-
hood, and late adulthood, for instance.19 The specifi c changes that might occur are less
important than the fact that change is possible.
The Big Five Personality Traits
For managers and associates to effectively use personality traits in predicting behavior, they
must work with a concise set of traits. But thousands of traits can be used todescribe a per-
son. Which traits are most useful? Which correspond to the most meaningfulbehavioral
tendencies in the workplace? These questions have puzzled researchers for many years.
Fortunately, a consensus among personality experts has emerged to focus on fi ve traits.
These traits, collectively known as the Big Five, include extraversion, conscientiousness,
agreeableness, emotional stability, and openness to experience, as shown in Exhibit 5-1.
Extraversion
The extraversion trait was an important area of study for many well-known psycholo-
gists in the early-to-middle portion of the twentieth century, including Carl Jung, Hans
extraversion
The degree to which an
individual is outgoing and
derives energy from being
around other people.
Conscientiousness—
degree to which an individual
focuses on goals and works
toward them in a disciplined
way.
Extraversion—degree
to which an individual is
outgoing and derives energy
from being around people.
Openness to
experience—degree to
which an individual seeks
new experiences and thinks
creatively about the future.
Emotional stability—
degree to which an individual
easily copes with stressful
situations or heavy demands.
Agreeableness—degree
to which an individual is
easygoing and tolerant.
Personality
Exhibit 5-1 The Big Five Personality Traits
c05.indd 172c05.indd 172 12/08/10 10:46 AM12/08/10 10:46 AM
Fundamentals of Personality 173
Eysenck, and Raymond Cattell. For Jung and many of his contemporaries, this aspect
ofpersonality was considered the most important driver of behavior. Extraversion is the
degree to which a person is outgoing and derives energy from being around other people.
In more specifi c terms, it is the degree to which a person: (1) enjoys being around other
people, (2) is warm to others, (3) speaks up in group settings, (4) maintains a vigor-
ous pace, (5) likes excitement, and (6) is cheerful.20 Herb Kelleher of Southwest Airlines
clearly fi ts this mold, as does Carol Bartz, current CEO of Yahoo!21
Research has shown that people scoring high on this dimension, known as extraverts,
tend to have a modest but measurable performance advantage over introverts in occupa-
tions requiring a high level of interaction with other people.22 Specifi c occupations where
extraverts have been found to perform particularly well include sales and management.
In contrast, introverts, who do not score high on extraversion, tend to do particularly
well in occupations such as accounting, engineering, and information technology, where
more solitary work is frequently required. For any occupation where teams are central,
or in a high-involvement organization where teams are emphasized, extraverts may also
have a slight edge, as teams involve face-to-face interaction, group decision making, and
navigation of interpersonal dynamics.23 A team with a very high percentage of extraverts
as members, however, may function poorly, for too many team members may be more
interested in talking than in listening. Finally, research suggests that extraversion is related
to job satisfaction, with extraverts exhibiting slightly more satisfaction regardless of the
specifi c conditions of the job situation.24
Conscientiousness
The conscientiousness trait has played a central role in personality research in recent
years. Many current personality researchers believe this dimension of personality has the
greatest effect of all personality dimensions on a host of outcomes in the workplace. Con-
scientiousness is the degree to which a person focuses on goals and works toward them in a
disciplined way. In specifi c terms, it is the degree to which a person: (1) feels capable, (2) is
organized, (3) is reliable, (4) possesses a drive for success, (5) focuses on completing tasks,
and (6) thinks before acting.25
Research has shown that individuals scoring high on conscientiousness have a per-
formance edge in most occupations and tend to perform well on teams.26 This is to be
expected, because irresponsible, impulsive, low-achievement-striving individuals generally
are at a disadvantage in activities both inside and outside the workplace. In an impor-
tant study, hundreds of individuals were tracked from early childhood through late adult-
hood.27 Their success was assessed in terms of job satisfaction in midlife, occupational sta-
tus in midlife, and annual income in late adulthood. Conscientiousness, which was fairly
stable over the participants’ lifetimes, positively affected each of these success measures.
This is the reason companies such as Microsoft, Bain & Company, and Goldman Sachs
emphasize conscientiousness when searching for new associates.28 Interestingly, research
shows that conscientiousness has a stronger positive effect on job performance when the
person also scores high on agreeableness, the trait considered next.29
Agreeableness
The agreeableness trait has also received a great deal of attention in recent years. Agree-
ableness is the degree to which a person is easygoing and tolerant—the degree to which a
person: (1) believes in the honesty of others, (2) is straightforward, (3) is willing to help
conscientiousness
The degree to which an
individual focuses on goals
and works toward them
in a disciplined way.
agreeableness
The degree to which an
individual is easygoing
and tolerant.
c05.indd 173c05.indd 173 12/08/10 10:46 AM12/08/10 10:46 AM
174 Chapter 5 Personality, Intelligence, Attitudes, and Emotions
others, (4) tends to yield under confl ict, (5) exhibits humility, and (6) is sensitive to the
feelings of others.30
Research has not shown a consistent pattern of job outcomes for individuals scoring
high or low on agreeableness. After all, being agreeable and disagreeable can be valuable
at different times in the same job. A manager, for example, may need to discipline an as-
sociate in the morning but behave very agreeably toward union offi cials in the afternoon.
A salesperson may need to be tough in negotiations on one day but treat a long-standing
customer with gracious deference on the next day.
Agreeable individuals do, however, seem to be consistently effective in teamwork.31
They are positive for interpersonal dynamics, as they are sensitive to the feelings of oth-
ers and often try to ensure the participation and success of all team members. Teams
with many members who are agreeable have been found to perform well.32 Having an
extremely high percentage of very agreeable team members, however, may be associated
with too little debate on important issues. When teams must make important decisions
and solve non-routine problems, having some individuals with lower scores on agreeable-
ness may be an advantage.
Emotional Stability
The trait of emotional stability relates to how a person copes with stressful situations or
heavy demands. Specifi c features of this trait include the degree to which a person: (1)
is relaxed, (2) is slow to feel anger, (3) rarely becomes discouraged, (4) rarely becomes
embarrassed, (5) resists unhealthy urges associated with addictions, and (6) handles crises
well.33 Research has shown that emotionally stable individuals tend to have an edge in
task performance across a large number of occupations.34 This is reasonable, for stable
individuals are less likely to exhibit characteristics that may interfere with performance,
such as being anxious, hostile, and insecure. Similarly, emotionally stable individuals seem
to have modest but measurable advantages as team members.35 Several studies reveal that
teams perform more effectively when composed of members scoring high on this trait.36
Furthermore, when individuals are high on emotional stability, in combination with high
extraversion and high conscientiousness, they are more likely to have team leadership
potential, than those who do not have this personality profi le.37 Finally, research shows
that emotional stability is positively linked to job satisfaction, independent of the specifi c
conditions of the job situation.38
Openness to Experience
The openness trait is the degree to which a person seeks new experiences and thinks
creatively about the future. More specifi cally, openness is the degree to which a person:
(1) has a vivid imagination, (2) has an appreciation for art and beauty, (3) values and
respects emotions in himself and others, (4) prefers variety to routine, (5) has broad
intellectual curiosity, and (6) is open to reexamining closely held values.39 Research sug-
gests that both individuals scoring high and individuals scoring low on openness can
perform well in a variety of occupations and can function well on teams.40 Those who
score high on this dimension of personality, however, are probably more effective at
particular tasks calling for vision and creativity, such as the creative aspects of advertis-
ing, the creative aspects of marketing, and many aspects of working in the arts. At W.L.
Gore and Associates, maker of world-renowned Gore-Tex products (such as sealants and
emotional stability
The degree to which an
individual easily handles
stressful situations and
heavy demands.
openness to experience
The degree to which an
individual seeks new
experiences and thinks
creatively about the future.
c05.indd 174c05.indd 174 12/08/10 10:46 AM12/08/10 10:46 AM
Fundamentals of Personality 175
fabrics), strong openness is valued for many aspects of engineering, sales, and marketing
because the company has been successful through innovation and wants to keep its cul-
ture of creativity, discovery, and initiative.41 Individuals with lower openness scores may
be more effective in jobscalling for strong adherence to rules, such as piloting airplanes
and accounting.
The Big Five as a Tool for Selecting
New Associates and Managers
Given the links between important competencies and specifi c personality traits, it is not
surprising that personality assessment can play a role in hiring decisions. Although no
single tool should be used as the basis for hiring new associates and managers, personality
assessment can be a useful part of a portfolio of tools that includes structured interviews
and skills evaluations. In some reviews of available tools, Big Five assessments have been
shown to provide useful predictions of future job performance.42 It is important, however,
to develop a detailed understanding of how personality traits predict performance in a
specifi c situation. Such understanding requires that the general information just discussed
be supplemented by: (1) an in-depth analysis of the requirements of a particular job in a
particular organization and (2) an in-depth determination of which traits support perfor-
mance in that particular job. In some cases, only certain aspects of a trait may be impor-
tant in a specifi c situation. For example, being slow to anger and not prone to frustration
may be crucial aspects of emotional stability for particular jobs, whereas being relaxed may
be much less important for these jobs. Call center operator positions call for this particular
combination of characteristics. They have to respond positively to customers, even when
customers are rude or hostile.43
The Big Five and High-Involvement Management
We now turn to competencies that are important for high-involvement management.
Combinations of several Big Five traits likely provide a foundation for important com-
petencies. Although research connecting the Big Five to these competencies has not been
extensive, the evidence to date suggests important linkages.
Recall that high-involvement management focuses on developing associates so that
substantial authority can be delegated to them. Available research suggests that managers’
competencies in developing, delegating, and motivating are enhanced by high extraver-
sion, high conscientiousness, and high emotional stability.44 This research is summarized
in Exhibit 5-2 and is consistent with our earlier discussion, which pointed out that con-
scientious, emotionally stable individuals have advantages in many situations and that
extraverts have a slight advantage in situations requiring a high level of interaction with
people.
As might be expected, available research also indicates that these same characteris-
tics provide advantages to associates in high-involvement organizations. For associates,
competencies in self-development, decision making, self-management, and teamwork
are crucial. Conscientious, emotionally stable individuals are likely to work at these com-
petencies, and being an extravert may present a slight advantage.45 Agreeableness and
openness do not appear to have consistent effects on the competencies discussed here.
c05.indd 175c05.indd 175 12/08/10 10:46 AM12/08/10 10:46 AM
176 Chapter 5 Personality, Intelligence, Attitudes, and Emotions
Cognitive and Motivational Properties of Personality
We turn next to several cognitive and motivational concepts that have received attention
as separate and important properties related to personality. They are defi ned as follows
(see Exhibit 5-3):
• Cognitive properties—properties of individuals’ perceptual and thought processes
that affect how they typically process information
• Motivational properties—stable differences in individuals that energize and
maintain overt behaviors
Cognitive Concepts
Differences in how people use their intellectual capabilities may result in vastly different
perceptions and judgments. Personality concepts that focus on cognitive processes help us
EXHIBIT 5-2 The Big Five and High-Involvement Management
Competencies Description Big Five Traits*
For Managers
Delegating to others Patience in providing information and support E� C� A� ES� O�
when empowering others, but also the ability to
confront individuals when there is a problem
Developing others Interest in sharing information, ability to coach and E� (C�) A�� ES� (O�)
train, and interest in helping others plan careers
Motivating others Ability to bring out the best in other people, desire E�� C� (A�) ES�
to recognize contributions of others, and in general
an interest in others
For Associates
Decision-making skills Careful consideration of important inputs, little E� C�� A– ES� O�
putting off of decisions, and no tendency to
change mind repeatedly
Self-development Use of all available resources for improvement, E� C�� A� ES� (O�)
interest in feedback, and lack of defensiveness
Self-management Little procrastination, effective time management,E� C� (A�)
and a focus on targets
Teamwork Willingness to subordinate personal interests for the E� C� A�� ES� O�
team, ability to follow or lead depending on the
needs of the team, and commitment to building
team spirit
*Entries in the exhibit are defi ned as follows: E � extraversion, C � conscientiousness, A � agreeableness, ES � emotional stability (many researchers
defi ne this using a reverse scale and use the label “need for stability” or “neuroticism”), and O � openness to experience. A ”�” indicates that higher
scores on the trait appear to promote the listed competency. A “��” indicates that higher scores on a trait appear to have very signifi cant effects
on the listed competency. Similarly, a “�” indicates that low levels of a trait appear to promote the listed competency. Parentheses are used in cases
where some aspects of a trait are associated with the listed competency but the overall trait is not. For example, only the fi rst and fourth aspects of
conscientiousness (feels capable and possesses a drive for success) have been found to be associated with the competency for developing others.
Source: Adapted from P.J. Howard and J.M. Howard. 2001. The Owner’s Manual for Personality at Work (Austin, TX: Bard Press).
c05.indd 176c05.indd 176 12/08/10 10:46 AM12/08/10 10:46 AM
Fundamentals of Personality 177
to understand these differences. Three such concepts are locus of control, authoritarian-
ism, and self-monitoring.
The personality concept of locus of control refers to a person’s tendency to attribute
the cause or control of events either to herself or to factors in the external environment.
People who tend to believe that they have control over events are said to have an“internal”
locus of control. Those who consistently believe that events are controlled by outside
forces in the environment have an “external” locus of control.46
Internals believe they can control what happens to them. This often leads them to
engage in work and leisure activities requiring greater skill47 and to conform less to group
infl uences.48 Internals, then, tend to think they can be successful if they simply work hard
enough, and this belief may be refl ected in their work habits, especially on diffi cult tasks.
They also tend to exhibit a greater sense of well-being, a fi nding that holds worldwide.49
Externals believe that what happens to them is more a matter of luck or fate, and they
see little connection between their own behavior and success or failure. They are more
conforming and may therefore be less argumentative and easier to supervise. Structured
tasks and plenty of supervision suit them well. Overall, associates with an internal locus
of control experience more positive work outcomes than people with an external locus of
control, including higher motivation and less job stress.50
The original research on authoritarianism began as an effort to identify people who
might be susceptible to anti-Semitic ideologies. Over time, the concept evolved into its
locus of control
The degree to which
an individual attributes
control of events to self
or external factors.
authoritarianism
The degree to which
an individual believes
in conventional values,
obedience to authority,
and legitimacy of power
differences in society.
Self-monitoring—
degree to which an individual
attempts to present the image
he or she thinks others want
to see in a given situation
Locus of control—
degree to which an individual
attributes control of events to
self or to external factors
Achievement motivation—
degree to which an individual
desires to perform in terms of a
standard of excellence or to
succeed in competitive situations
Authoritarianism—
degree to which an individual
believes in conventional
values, obedience to authority,
and legitimacy of power
differences in society
Social dominance
orientation—
degree to which one prefers social
relationships to be equal or
to reflect status differences
Approval motivation—
degree to which an individual
is concerned about presenting
self in a socially desirable
way in evaluative situations
Cognitive and Motivational
Concepts of Personality
Exhibit 5-3 Cognitive and Motivational Concepts of Personality
c05.indd 177c05.indd 177 12/08/10 10:46 AM12/08/10 10:46 AM
178 Chapter 5 Personality, Intelligence, Attitudes, and Emotions
present meaning—the extent to which a person believes in
conventional values, obedience to authority, and the legiti-
macy of power and status differences in society.51 Authori-
tarianism has been extensively researched. Individuals who
score high on this concept tend to believe that status and
the use of power in organizations are proper. They are sub-
missive to people in power and aggressive toward those who
break rules.52 Furthermore, they may be more willing to ac-
cept unethical behavior in others when those others are in
powerful or high-status positions.53 Such people tend to ad-
just readily to rules and regulations and emerge as leaders in
situations requiring a great deal of control by the manager.
Related to authoritarianism, is social dominance
orientation (SDO).54 SDO refers to a general attitudinal
orientation concerning whether one prefers social relation-
ships to be equal or to refl ect status differences. Further-
more, people with a high SDO view their own groups as superior and dominant over other
“outgroups.”55 SDO is negatively related to the Big Five personality traits agreeableness
and openness to experience.56 People high in SDO have also been found to be more likely
to discriminate against job applicants from different demographic groups57 and prefer to
work in nondiverse organizations58 as compared with people low in SDO.
Self-monitoring is an important personality concept that describes the degree to
which people are guided by their true selves in decisions and actions. It determines whether
people are fully consistent in behavior across different situations. Low self-monitors follow
the advice given by Polonius to Laertes in Shakespeare’s Hamlet 59: “To thine own self be
true.” Low self-monitors ask, “Who am I, and how can I be me in this situation?”60 In
contrast, high self-monitors present somewhat different faces in different situations. They
have been referred to as “chameleon-like,” as they try to present the appropriate image to
each separate audience.61 High self-monitors ask, “Who does this situation want me to be,
and how can I be that person?”62
High self-monitors can be quite effective in the workplace, with a tendency to out-
perform low self-monitors in several areas.63 Because they are highly attentive to social
cues and the thoughts of others, they are sometimes more effective at confl ict resolution.
Because they are attentive to social dynamics and the expectations of others, they fre-
quently emerge as leaders. Because they are more likely to use interpersonal strategies that
fi t the desires of other people, they tend to perform well in jobs requiring cooperation and
interaction. Management is one such job, and research indicates that high self-monitors
are more effective managers. In one study, MBA graduates were tracked for fi ve years after
graduation. MBAs who were high self-monitors received more managerial promotions.64
Motivational Concepts
Motivational concepts of personality are refl ected more in a person’s basic needs than in
his or her thought processes. Two important concepts in this category are achievement
motivation and approval motivation.
Achievement motivation is commonly referred to as the need for achievement
(or n-Ach). It is an important determinant of aspiration, effort, and persistence in situ-
ations where performance will be evaluated according to some standard of excellence.65
social dominance
orientation
A general attitudinal
orientation concerning
whether one prefers social
relationships to be equal or
to refl ect status differences.
self-monitoring
The degree to which an
individual attempts to
present the image he or
she thinks others want to
see in a given situation.
achievement motivation
The degree to which an
individual desires to perform
in terms of a standard of
excellence or to succeed
in competitive situations.
©Janie Barrett/Fairfax photos/Redux Pictures
c05.indd 178c05.indd 178 12/08/10 10:46 AM12/08/10 10:46 AM
Fundamentals of Personality 179
Thus, need for achievement is the strength of a person’s desire to perform in terms of a
standard of excellence or to succeed in competitive situations. Unlike most conceptualiza-
tions of personality traits, need for achievement has been related to particular situations.
That is, it is activated only in situations of expected excellence or competition. The in-
teraction of personality and the immediate environment is obvious in this theory, and it
affects the strength of motivation.
Persons with a high need for achievement set their goals and tend to accept respon-
sibility for both success and failure. They dislike goals that are either extremely diffi cult
or easy, tending to prefer goals of moderate diffi culty. They also need feedback regarding
their performance. People with a high need for achievement are also less likely to procras-
tinate than people with a low need for achievement.66
This personality characteristic is often misinterpreted. For example, some may think
that need for achievement is related to desire for power and control. High need achievers,
however, tend to focus on task excellence rather than on power.
Approval motivation is another important motive-based personality concept.
Researchers have noted the tendency for some people to present themselves in socially
desirable ways when they are in evaluative situations. Such people are highly concerned
about the approval of others. Approval motivation is also related to conformity and “going
along to get along.”67
Ironically, the assessment of one’s own personality is an evaluative situation, and per-
sons high in approval motivation tend to respond to personality tests in socially desirable
ways. In other words, such people will try to convey positive impressions of themselves.
Such tendencies lead individuals to “fake” their answers to personality questionnaires ac-
cording to the perceived desirability of the responses. Many questionnaires contain “lie”
scales and sets of items to detect this social approval bias. Such precautions are espe-
cially important when personality tests are used to select, promote, or identify persons for
important organizational purposes.
Some Cautionary and Concluding Remarks
Personality characteristics may change to some degree, and situational forces may at times
overwhelm the forces of personality. People can adjust to their situations, particularly
those who are high self-monitors. An introverted person may be somewhat sociable in a
sales meeting, and a person with an external locus of control may on occasion accept per-
sonal responsibility for his failure. Furthermore, some people can be trained or developed
in jobs that seem to confl ict with their personalities. Fit between an individual’s personal-
ity and the job does, however, convey some advantages. Overall, the purpose of measuring
personality is to know that some people may fi t a given job situation better than others.
For those who fi t less well, we may want to provide extra help, training, or counseling be-
fore making the decision to steer them toward another position or type of work. We also
note that personality testing in organizations should focus only on “normal” personality
characteristics. According to the Americans with Disabilities Act (1990), it is illegal to
screen out potential employees based on the results of personality tests designed to mea-
sure psychological disabilities (e.g., depression or extreme anxiety).
The information on personality and performance presented in this chapter has been de-
veloped largely from research in the United States and Canada. Research in Europe is reason-
ably consistent,68 but other parts of the world have been studied less. Great care must be taken
in applying the results of U.S.- and Canadian-based research to other regions of the world.
approval motivation
The degree to which an
individual is concerned about
presenting himself or herself
in a socially desirable way
in evaluative situations.
c05.indd 179c05.indd 179 12/08/10 10:46 AM12/08/10 10:46 AM
EXPERIENCING ORGANIZATIONAL BEHAVIOR
Patricia Harris uses the above phrase to describe her com-mitment and fi t with the Mc-
Donald’s Corporation. Ms. Harris, cur-
rently a Vice President of McDonald’s
Corporation, USA. and the Global
Chief Diversity Offi cer, began her ca-
reer with the company over 30 years
ago. She started at McDonald’s in
1976 in a secretarial position and soon
began rising through the ranks, while
attending college part-time and raising
a family. Many of Ms. Harris’s positions
have been in human resource manage-
ment, and she is often attributed in
making McDonald’s a current leader
and early forerunner in promoting em-
ployee diversity, leading the company
to win the coveted Equal Employment
Opportunity Commission’s “Freedom to
Compete Award” in 2006 and the na-
tional Restaurant Association’s Diversity
Award in 2009, among many other
honors concerning diversity.
Several attributes of Patricia Har-
ris have led to her phenomenal career.
First of all, she is high on conscientious-
ness. Ms. Harris’s colleagues describe
her as “driven,” and she has often
“stepped out of her comfort zone”
to take on new job challenges. She
is also goal-driven to develop diver-
sity processes and programs to help
build McDonald’s business all over the
world. While being extremely perform-
ance-focused, Ms. Harris also displays
agreeableness by serving as a mentor
to many other McDonald’s associates
and crediting her own mentors and
team members when asked about her
success. Her high need for achieve-
ment came through when, early in her
career, she told her boss and mentor:
“I want your job!” Ms. Harris also
has a strong internal locus of control
because she focuses on making her
environment and the company’s a bet-
ter place to work. Finally, she demon-
strates a great deal of intelligence in
dealing with her job. In addition to a
temperament that makes her very well
suited for her career, she also pos-
sesses the knowledge and intelligence
that have helped make McDonald’s a
leader in diversity. Rich Floersch, Ex-
ecutive Vice President in Charge of
Human Relations, states: “She’s very
well informed, a true student of diver-
sity. She is good at analyzing U.S.
diversity principles and applying them
in an international market. She’s also
a good listener who understands the
business and culture very well.”
Patricia Harris would probably be
a success anywhere she worked—yet
her true passion for McDonald’s and
its diversity initiatives seems to set her
apart from most other executives. In
1985, when Ms. Harris was fi rst asked
to become an affi rmative action man-
ager, she was apprehensive about tak-
ing the job because affi rmative action
was not a popular issue at the time.
She overcame her apprehension and
started on her path to dealing with di-
versity issues. She states that “this job
truly became my passion. It’s who I am,
both personally and professionally.” By
working on diversity issues, Ms. Harris
was able to realize not only her pro-
fessional goals, but also her personal
goals of helping women and minorities.
Ray Kroc, the founder of McDonald’s,
stated that “None of us is as good as
all of us,” focusing on the importance of
inclusion and ownership by all employ-
ees. This value permeates McDonald’s
corporate vision and also coincides
with the personal vision of Patricia
Harris. Harris says that her company’s
mission “is to create an environment
in which everyone within McDonald’s
global system is able to contribute fully
regardless of role.” Thus, not only is she
extremely competent at her job, she is
also passionate about her job and her
organization. Patricia Harris exempli-
fi es what happens when an individual’s
traits, abilities, and passion line up with
the vision of the organization.
“I Have Ketchup in My Veins”
Sources: K. Whitney. Jan. 18, 2009. Diversity is everybody’s business at McDonald’s. Diversity Executive. At
http://www.diversity-executive.com/article.php?article�480; McDonald’s, May 14, ”National Restaurant Asso-
ciation Honors McDonald’s With Diversity Award” at http://www.aboutmcdonalds.com/mcd/csr/news/national_
restaurant.5.html?DCSext.destination�http://www.aboutmcdonalds.com/mcd/csr/news/national_restaurant.5.html;
A. Pomeroy. Dec. 2006. “She’s Still Lovin’ It,” HRMagazine, Dec., pp. 58–61; anonymous staff writer. 2007. “An Inter-
view with Pat Harris, Vice President Diversity Initiatives with McDonald’s Corporation” at http://www.employmentguide.
com/careeradvice/Leading_the_Way-in_Diversity. html, accessed Apr. 18, 2007; J. Lawn. 2006. “Shattered Glass and
Personal Journeys,” FoodManagement, July, at http://www.food-management.com/article/13670; anonymous. 2005.
“Ray Kroc: Founder’s Philosophies Remain at the Heart of McDonald’s Success,” Nation’s Restaurant News, Apr. 11, at
http://fi ndarticles.com/p/articles/mi_m3190/is_15_39/ai_n13649039.
©Nathan Mandell Photography
c05.indd 180c05.indd 180 12/08/10 10:46 AM12/08/10 10:46 AM
http://www.diversity-executive.com/article.php?article480
http://www.employmentguide.com/careeradvice/Leading_the_Way-in_Diversity.html
http://www.employmentguide.com/careeradvice/Leading_the_Way-in_Diversity.html
http://www.food-management.com/article/13670
http://findarticles.com/p/articles/mi_m3190/is_15_39/ai_n13649039
http://www.aboutmcdonalds.com/mcd/csr/news/national_restaurant.5.html?DCSext.destination
http://www.aboutmcdonalds.com/mcd/csr/news/national_restaurant.5.html?DCSext.destination
http://www.aboutmcdonalds.com/mcd/csr/news/national_restaurant.5.html
Fundamentals of Personality 181
In conclusion, determining the personality and behavioral attributes of higher per-
formers in an organization can help a fi rm to improve its performance over time, as sug-
gested in the Experiencing Organizational Behavior feature. Patricia Harris, Vice President
of McDonald’s Corporation, USA, and Global Chief Diversity Offi cer, exemplifi es such a
high performer whose personality fi ts the organization’s strategies and goals.
Intelligence
In the preceding section, we saw how important personality is to organizational behavior
and achieving a high-involvement workplace. There is another stable individual differ-
ence that can greatly affect organizational behavior, particularly job performance. This
trait is cognitive ability, more commonly referred to as intelligence. Intelligence refers to
the ability to develop and understand concepts, particularly more complex and abstract
concepts.69 Despite its importance, intelligence as an aspect of human ability has been
somewhat controversial. Some psychologists and organizational behavior researchers do
not believe that a meaningful general intelligence factor exists. Instead, they believe that
many different types of intelligence exist and that most of us have strong intelligence in
one or more areas. These areas might include the following:70
• Number aptitude—the ability to handle mathematics
• Verbal comprehension—the ability to understand written and spoken words
• Perceptual speed—the ability to process visual data quickly
• Spatial visualization—the ability to imagine a different physical confi guration—
for example, to imagine how a room would look with the furniture rearranged
• Deductive reasoning—the ability to draw a conclusion or make a choice that
logically follows from existing assumptions and data
• Inductive reasoning—the ability to identify, after observing specifi c cases or
instances, the general rules that govern a process or that explain an outcome—for
example, to identify the general factors that play a role in a successful product
launch after observing one product launch at a single company
• Memory—the ability to store and recall previous experiences
Most psychologists and organizational behavior researchers who have extensively
studied intelligence believe, however, that a single unifying intelligence factor exists, a
factor that blends together all of the areas from above. They also believe that general intel-
ligence has meaningful effects on success in the workplace. Existing evidence points to the
fact that general intelligence is an important determinant of workplace performance and
career success.71 This is particularly true for jobs and career paths that require complex
information processing, as opposed to simple manual labor. Exhibit 5-4 illustrates the
strong connection between intelligence and success for complex jobs.
Although the use of intelligence tests is intended to help organizations select the
best human capital, as explained in the Experiencing Organizational Behavior feature on
page 183, their use is controversial. It is controversial because some question the ability
of these tests to accurately capture a person’s true level of intelligence. Also, there can be
legal problems with intelligence tests if they result in an adverse impact. However, if a test
accurately refl ects individual intelligence, it can help managers select higher-quality associ-
ates. The superior human capital in the organization will then lead to higher productivity
and the ability to gain an advantage over competitors. A competitive advantage, in turn,
usually produces higher profi ts for the organization.72
intelligence
General mental ability
used in complex
information processing.
c05.indd 181c05.indd 181 12/08/10 10:46 AM12/08/10 10:46 AM
182 Chapter 5 Personality, Intelligence, Attitudes, and Emotions
Attitudes
It is sometimes diffi cult to distinguish between an individual’s personality and attitudes.
The behavior of Southwest associates and managers described in the opening case, for ex-
ample, might be interpreted by some as based primarily on attitudes rather than personal-
ity, whereas others might believe that personality plays a larger role. Regardless, managers
are concerned about the attitudes of associates because they can be major causes of work
behaviors. Positive attitudes frequently lead to productive efforts, whereas negative atti-
tudes often produce poor work habits.
An attitude is defi ned as a persistent mental state of readiness to feel and behave in a
favorable or unfavorable way toward a specifi c person, object, or idea. Close examination
of this defi nition reveals three important conclusions. First, attitudes are reasonably stable.
attitude
A persistent tendency
to feel and behave in a
favorable or unfavorable
way toward a specifi c
person, object, or idea.
EXHIBIT 5-4 Intelligence and Success
Job Effects of Intelligence
Military Jobs* Percentage of Success in Training Attributable to General Intelligence
Nuclear weapons specialist77%
Air crew operations specialist70%
Weather specialist69%
Intelligence specialist67%
Fireman60%
Dental assistant55%
Security police54%
Vehicle maintenance49%
General maintenance28%
Civilian Jobs** Degree to which General Intelligence Predicts Job Performance (0 to 1 scale)
Sales .61
Technical assistant .54
Manager .53
Skilled trades and craft workers .46
Protective professions workers .42
Industrial workers .37
Vehicle operator .28
Sales clerk .27
* Source: M.J. Ree and J.A. Earles. 1990. Differential Validity of a Differential Aptitude Test, AFHRL-TR-89–59 (San Antonio, TX: Brooks Air Force Base).
** Source: J.E. Hunter and R.F. Hunter. 1984. “Validity and Utility of Alternative Predictors of Job Performance,” Psychological Bulletin 96: 72–98.
c05.indd 182c05.indd 182 12/08/10 10:46 AM12/08/10 10:46 AM
Attitudes 183
FPO
EXPERIENCING ORGANIZATIONAL BEHAVIOR
Each spring, representatives of National Football League teams join a large group of
college football players in India-
napolis, Indiana. They are in
town to participate in the
so-called draft combine,
where the players are
given the opportu-
nity to demonstrate
their football skills.
After showing their
speed, strength, and
agility, the players
hope to be selected by
a team early in the draft
process and to command
a large salary. For some, suc-
cess at the combine is critical to be-
ing chosen by a team. For others, suc-
cess is important because the combine
plays a role in determining the amount
of signing bonuses and other fi nancial
incentives.
Talented football players work
to achieve the best physical condi-
tion they can in anticipation of the
important evaluations. They focus on
the upcoming medical examinations,
weightlifting assessments, 40-yard
dashes, vertical- and broad-jump
tests, and tackling-dummy tests. They
may be less focused on another key
feature of the draft combine—the in-
telligence test. The practice of testing
general intelligence has been a fi x-
ture of the NFL since the early 1970s.
The test that is used by all teams,
the Wonderlic Personnel Test, has
50 questions and a time limit of 12
minutes in its basic version.
Teams place different levels of im-
portance on the intelligence test. The
Green Bay Packers, for example, his-
torically have not put a great
deal of emphasis on
it. “The Wonderlic
has never been
a big part
of what we
do here,”
said former
Green Bay
general man-
ager and cur-
rent consultant
Ron Wolf. “To
me, it’s [just] a sig-
nal. If it’s low, you bet-
ter fi nd out why it’s low, and
if the guy is a good football player, you
better satisfy your curiosity.” The Cincin-
nati Bengals, in contrast, have gener-
ally taken the test very seriously, in part
“because it is the only test of its kind
given to college players.” In Atlanta,
former head coach Dan Reeves showed
his faith in the intelligence-testing proc-
ess by choosing a linebacker who was
equal in every way to another line-
backer, except for higher intelligence
scores. In New York, intelligence and
personality testing has been taken to an
extreme for the NFL. The Giants organi-
zation has used a test with nearly 400
questions. The late Giants manager,
George Young, stated, “Going into a
draft without some form of psychologi-
cal testing on the prospects is like going
into a gunfi ght with a knife.”
Can a player be too smart?
According to some, the answer is
yes. “I’ve been around some play-
ers who are too smart to be good
football players,” said Ralph Cin-
drich, a linebacker in the NFL many
years ago. Many others have the
opinion that high intelligence scores
are indicative of a player who will
not play within the system but will
want to improvise too much on the
fi eld and argue with coaches too
much off the fi eld. There isn’t much
evidence, however, to support this
argument. Many successful quar-
terbacks, for example, have had
high scores. Super Bowl winner Tom
Brady of the New England Patriots
scored well above average, as did
the New York Giants’ Eli Manning.
Quarterbacks score higher on
the test than players in several other
positions but do not score the highest.
Average scores for various positions
are shown below, along with scores
from the business world for compari-
son. A score of 20 correct out of 50
is considered average and equates
to approximately 100 on a standard
IQ test. Any score of 15 (the lowest
score shown below) or above repre-
sents reasonableintelligence.
Offensive tackles—26
Centers—25
Quarterbacks—24
Fullbacks—17
Safeties—19
Wide receivers—17
Chemists—31
Programmers—29
News reporters—26
Intelligence and Intelligence Testing in the
National Football League
©PCN/Corbis Images
c05.indd 183c05.indd 183 12/08/10 10:46 AM12/08/10 10:46 AM
184 Chapter 5 Personality, Intelligence, Attitudes, and Emotions
Unless people have strong reasons to change their attitudes, they will persist or remain the
same. People who like jazz music today will probably like it tomorrow, unless important
reasons occur to change their musical preferences.
Second, attitudes are directed toward some object, person, or idea; that is, we may
have an attitude toward our job, our supervisor, or an idea the college instructor presented.
If the attitude concerns the job (for example, if a person dislikes monotonous work), then
the attitude is specifi cally directed toward that job. We cannot extend that negative job
attitude to an attitude toward jazz music.
Third, an attitude toward an object or person relates to an individual’s behavior to-
ward that object or person. In this sense, attitudes may infl uence our actions. For example,
if an individual likes jazz music (an attitude), he may go to a jazz club (a behavior) or buy
a jazz CD (a behavior). If an associate dislikes her work (an attitude), she may avoid com-
ing to work (absenteeism behavior) or exert very little effort on the job (poor productivity
behavior). People tend to behave in ways that are consistent with their feelings. Therefore,
to change an unproductive worker into a productive one, it may be necessary to deal with
that worker’s attitudes.
Halfbacks—16
Salespersons—24
Bank tellers—17
Security guards—17
Warehouse workers—15
Many players become tense over
the NFL intelligence test. What types
of questions are causing the anxi-
ety? A sample of the easier questions
follows (to learn more, go to www.
wonderlic.com):
1. The 11th month of the year is: (a)
October, (b) May, (c) November, (d)
February.
2. Severe is opposite of: (a) harsh,
(b) stern, (c) tender, (d) rigid, (e)
unyielding.
3. In the following set of words,
which word is different from the
others? (a) sing, (b) call, (c) chat-
ter, (d) hear, (e) speak.
4. A dealer bought some televisions
for $3,500. He sold them for
$5,500, making $50 on each
television. How many televisions
were involved?
5. Lemon candies sell at 3 for 15 cents.
How much will 11⁄2 dozen cost?
6. Which number in the following
group of numbers represents the
smallest amount? (a) 6, (b) .7, (c)
9, (d) 36, (e) .31, (f) 5.
7. Look at the following row of num-
bers. What number should come
next? 73 66 59 52 45 38.
8. A plane travels 75 feet in 1⁄4 sec-
ond. At this speed, how many
feet will it travel in 5 seconds?
9. A skirt requires 21⁄3 yards of ma-
terial. How many skirts can be
cut from 42 yards?
10. ENLARGE, AGGRANDIZE. Do
these words: (a) have similar
meanings, (b) have contradic-
tory meanings, (c) mean neither
the same nor the opposite?
11. Three individuals form a partner-
ship and agree to divide the prof-
its equally. X invests $4,500, Y in-
vests $3,500, Zinvests $2,000.
If the profi ts are $2,400, how
much less does X receive than if
profi ts were divided in propor-
tion to the amount invested?
Sources: D. Dillon. 2001. “Testing, Testing: Taking the Wonderlic,” Sporting News.com, Feb. 23, at www.sportingnews.
com/voices/dennis_dillon/20010223.html; K. Kragthorpe. 2003. “Is Curtis Too Smart for NFL?” Utah Online, Apr. 23,
at www.sltrib.com/2003/Apr/04232003/Sports/50504.asp; J. Litke. 2003. “Smarter Is Better in the NFL, Usually:
But Not Too Smart to Be Good Football Players,” National Post (Canada), May 1, p. S2; J. Magee. 2003. “NFL Employs
the Wonderlic Test to Probe the Minds of Draft Prospects,” SignOnSanDiego.com, Apr. 20, at www.signonsandiego.
com/sports/nfl /magee/200304209999–ls20nfl col.html; J. Merron. 2002. “Taking Your Wonderlics,” ESPN Page 2,
Feb. 2, at www.espn.go.com/page2/s/closer/020228.html; T. Silverstein. 2001. “What’s His Wonderlic? NFL Uses
Time-Honored IQ Test as Measuring Stick for Rookies,” Milwaukee Journal Sentinel, Apr. 18, p. C1 ; A. Barra. 2006.
“Do These NFL Scores Count for Anything?” Wall Street Journal (Eastern Edition), Apr. 25, p. D.6
c05.indd 184c05.indd 184 12/08/10 10:46 AM12/08/10 10:46 AM
www.wonderlic.com
www.wonderlic.com
www.sportingnews.com/voices/dennis_dillon/20010223.html
www.sportingnews.com/voices/dennis_dillon/20010223.html
www.sltrib.com/2003/Apr/04232003/Sports/50504.asp
www.espn.go.com/page2/s/closer/020228.html
www.signonsandiego.com/sports/nfl/magee/200304209999%E2%80%93ls20nflcol.html
www.signonsandiego.com/sports/nfl/magee/200304209999%E2%80%93ls20nflcol.html
Attitudes 185
As illustrated in Exhibit 5-5, our behavior toward an object, person, or idea is infl u-
enced by our attitudes. In turn, our attitudes are constantly developing and changing as a
result of our behaviors. It is important to recognize that our behaviors are also infl uenced
by other factors, such as motivational forces and situational factors. We therefore can un-
derstand why behaviors are not always predictable from attitudes. For example, we may
have a strong positive attitude about a close friend. But we might reject an opportunity to
go to a movie with that friend if we are preparing for a diffi cult exam to be given tomor-
row. Thus, attitudes include behavioral tendencies and intentions, but our actual behav-
iors are also infl uenced by other factors.
Attitude Formation
Understanding how attitudes are formed is the fi rst step in learning how to apply attitude
concepts to organizational problems. This understanding can be developed by examining
the three essential elements of an attitude: (1) cognitive, (2) affective, and (3) behavioral.73
• The cognitive element of an attitude consists of the facts we have gathered and
considered about the object, person, or idea. Before we can have feelings about
something, we must fi rst be aware of it and think about its complexities.
• The affective element of an attitude refers to the feelings one has about the object
or person. Such feelings are frequently expressed as like or dislike of the object
or person and the degree to which one holds these feelings. For example, an
employee may love the job, like it, dislike it, or hate it.
• Finally, most attitudes contain a behavioral element, which is the individual’s
intention to act in certain ways toward the object of the attitude. As previously
explained, how we behave toward people may depend largely on whether we like
or dislike them based on what we know about them.
The formation of attitudes may be quite complex. In the following discussion, we
examine some ways in which attitudes are formed.
Attitude toward object,
person, or idea
Other influences on behavior
toward object, person, or idea
(situational forces, motivation,
and so on)
Behavior toward object,
person, or idea
Object, person, or idea
Exhibit 5-5 Infl uence of Attitudes on Behavior
c05.indd 185c05.indd 185 12/08/10 10:46 AM12/08/10 10:46 AM
186 Chapter 5 Personality, Intelligence, Attitudes, and Emotions
Learning
Attitudes can be formed through the learning process.74 As explained in Chapter 4, when
people interact with others or behave in particular ways toward an object, they often
experience rewards or punishments. For example, if you touch a cactus plant, you may
experience pain. As you experience the outcomes of such behavior, you begin to develop
feelings about the objects of that behavior. Thus, if someone were to ask you how you
felt about cactus plants, you might reply, “I don’t like them—they can hurt.” Of course,
attitudes can also develop from watching others experience rewards and punishments. A
person may not touch the cactus herself, but a negative attitude toward cacti could develop
after she watches a friend experience pain.
Self-Perception
People may form attitudes based on simple observations of their own behaviors.75 This is
called the self-perception effect, and it works as follows. An individual engages in a particular
behavior without thinking much about that behavior. Furthermore, no signifi cant positive
rewards are involved. Having engaged in the behavior, the person then diagnoses his actions,
asking himself what the behavior suggests about his attitudes. In many instances, this person
will conclude that he must have had a positive attitude toward the behavior. Why else would
he have done what he did? For example, an individual may join co-workers in requesting an
on-site cafeteria at work, doing so without much thought. Up to that point, the person may
have had a relatively neutral attitude about a cafeteria. After having joined in the request,
however, he may conclude that he has a positive attitude toward on-site cafeterias.
Infl uencing people through the foot-in-the-door technique is based on the self-
perception effect. This technique involves asking a person for a small favor (foot-in-the-
door) and later asking for a larger favor that is consistent with the initial request. After com-
pleting the small favor with little thought, the target often concludes that she has a positive
view toward whatever was done, and therefore she is more likely to perform the larger favor.
In one study of the foot-in-the-door technique, researchers went door-to-door asking in-
dividuals to sign a petition for safer driving.76 The request was small and noncontroversial;
thus, most people signed the petition without much thought. Weeks later, colleagues of
the researchers visited these same people and asked them to put a large, unattractive sign
in their yards that read “Drive Carefully.” These same colleagues also approached other
homeowners who had not been asked for the initial small favor. Fifty-fi ve percent of the in-
dividuals who had signed the petition agreed to put an ugly sign in their yards, whereas only
17 percent of those who had not been asked to sign the petition agreed to the yard sign.
Need for Consistency
A major concept associated with attitude formation is consistency.77 Two well-known theo-
ries in social psychology, balance theory and congruity theory, are important to an understand-
ing of attitude consistency. The basic notion is that people prefer that their attitudes be con-
sistent with one another (in balance or congruent). If we have a specifi c attitude toward an
object or person, we tend to form other consistent attitudes toward related objects or persons.
A simple example of attitude formation based on consistency appears in Exhibit 5-6.
Dan is a young accounting graduate. He is impressed with accounting theory and thinks
that accountants should work with data to arrive at important conclusions for manage-
ment. Obviously, he has a positive attitude toward accounting, as illustrated by the plus
sign between Dan and accounting in the exhibit. Now suppose that Dan’s new jobrequires
him to work with someone who dislikes accounting (represented by the minus signbetween
c05.indd 186c05.indd 186 12/08/10 10:46 AM12/08/10 10:46 AM
Attitudes 187
the new colleague and accounting). In this case, Dan may form a negativeattitude toward
the person in order to have a consistent set of attitudes. Dan likes accounting and may have
a negative attitude toward those who do not.
Two Important Attitudes in the Workplace
The two most thoroughly examined attitudes in organizational behavior are job satisfac-
tion and organizational commitment. Job satisfaction is a broad attitude related to the
job. A high level of satisfaction represents a positive attitude toward the job, while a low
level of satisfaction represents a negative attitude. Organizational commitment, as defi ned
here, is a broad attitude toward the organization as a whole. It represents how strongly
an individual identifi es with and values being associated with the organization. Strong
commitment is a positive attitude toward the organization, whereas weak commitment is
a less positive attitude. As we discuss below, these two attitudes can impact behavior that
is important to the functioning of an organization; thus, it is important to consider job
satisfaction and organizational commitment as desirable aspects of human capital.78
Job Satisfaction and Outcomes
Organizations need to be concerned with the satisfaction of their associates, because job
satisfaction is linked to many important behaviors that can have an impact on the bottom
line of an organization’s performance. Satisfaction has a highly positive effect on inten-
tions to stay in the job and a modest effect on actually staying in the job.79 Factors such as
attractive job openings during a booming economy and reaching retirement age can cause
satisfi ed people to leave, but in general satisfaction is associated with low turnover. With
the costs of replacing a departed worker generally quite high, maintaining higher levels of
satisfaction is important. High satisfaction also has a modestly positive effect on regular
attendance at work.80 Factors such as a very liberal sick-leave policy can, however, cause
even highly satisfi ed associates and managers to miss work time. Satisfaction also has a
moderately strong relationship with motivation.81
Job satisfaction has a reasonably straightforward relationship with intention to stay, ac-
tually staying, absenteeism, and motivation. In contrast, the specifi c form of the relationship
Exhibit 5-6 For-
mation of Consistent
Attitudes
Formation of a consistent
work attitude
Dan
Accounting
Dan’s new
colleague

–+
c05.indd 187c05.indd 187 12/08/10 10:46 AM12/08/10 10:46 AM
188 Chapter 5 Personality, Intelligence, Attitudes, and Emotions
between satisfaction and job performance has been the subject of a great deal of contro-
versy. Many managers and researchers believe that high satisfaction produces strong per-
formance. This idea seems reasonable, for a positive attitude should indeed result in strong
effort and accountability. Other managers and researchers, however, believe that it is strong
performance that causes workers to be satisfi ed with their jobs. For this second group of
investigators, a positive attitude does not cause strong performance but strong performance
does cause a positive attitude. Still others believe that satisfaction and performance are not
related or are only weakly related. For this last group, factors other than attitudes, such as
skills and incentive systems, are believed to have much stronger effects on job performance.
A recent study has helped to put these differences of opinion into perspective.82 In
this study, all previously published research on satisfaction and performance was synthe-
sized using modern quantitative and qualitative techniques. The study concluded with an
integrative model suggesting that all three of the groups mentioned above are correct to
some degree. High satisfaction causes strong performance, strong performance also causes
high satisfaction, and the relationship between the two is weaker in some situations. On
this last point, low conscientiousness and the existence of simple work are examples of fac-
tors that may cause the relationship to be weaker. Individuals who have positive attitudes
toward the job but who are lower in conscientiousness may not necessarily work hard,
which weakens the effects of job satisfaction on performance. In addition, strong perform-
ance at simple work does not necessarily result in strong satisfaction, which weakens the
effects of performance on satisfaction. For engineers, managers, and others with complex
jobs, performance and satisfaction have a reasonably strong connection.
Organizational Commitment and Outcomes in the Workplace
Similar to satisfaction, commitment has important effects on intentions to stay in the job
and modest effects on actually staying in the job and attending work regularly.83 Com-
mitment also is signifi cantly related to motivation. Interestingly, length of employment
plays a role in the relationship between commitment and staying in the job. A high level of
organizational commitment tends to be more important in decisions to stay for associates
and managers who have worked in their jobs for less time.84 For longer-term employees,
simple inertia and habit may prevent departures independent of the level of commitment
to the organization. Commitment also has positive effects on job performance, but the
effects are somewhat small.85 This link to performance appears to be stronger for manag-
ers and professionals. Although the relationship between commitment and regular job
performance is not extremely strong, organizational commitment does have a very strong
relationship with discretionary organizational citizenship behaviors, such as helping others
and taking on voluntary assignments.86
Causes of Job Satisfaction and Organizational Commitment
Given that job satisfaction and organizational commitment can impact on many impor-
tant organizational behaviors, it is imperative that organizations understand what makes
their associates satisfi ed and committed. Many of the same factors that lead to job satisfac-
tion also lead to organizational commitment. These factors include:
• Role ambiguity87
• Supervision/leadership88
• Pay and benefi ts89
c05.indd 188c05.indd 188 12/08/10 10:46 AM12/08/10 10:46 AM
Attitudes 189
• Nature of the job90
• Organizational climate91
• Stress92
• Perceptions of fair treatment93
Although these factors have all been linked to satisfaction and commitment, the re-
lationships are not always so simple. For example, in order to best understand whether
someone will be satisfi ed with a given dimension of her work, you need to consider her
comparison standard. People compare desirable facets of their work with what they expect
to receive or what they think they should receive.94 So, while one person may be very satis-
fi ed with earning $100,000 per year, another person may fi nd this amount unsatisfactory
because she was expecting to earn more.
Another complication arises when we consider that associates may be committed to
their organization for different reasons. There are three general reasons why people are
committed to their organizations.95 Affective commitment is usually what we think of
when we talk about organizational commitment because it means someone has strong posi-
tive attitudes toward the organization. Normative commitment means that someone is
committed to the organization because he feels he should be. Someone who stays with
their organization because he does not want to let his co-workers down is normatively com-
mitted. Finally, associates may experience continuance commitment, which means that
they are committed to the organization because they do not have any better opportunities.
Different factors affect different types of commitment.96 For example, benefi ts may affect
continuance commitment, for example, when a person is committed to an organization
only because her retirement plan will not transfer to another organization. On the other
hand, benefi ts may not infl uence how positive one feels about the organization, so that
benefi ts would be unrelated to affective commitment.
One other thing to note about the factors affecting satisfaction and commitment is
that the presence of high-involvement management is particularly important. Individu-
als usually have positive experiences working with this management approach, and thus
strong satisfaction and commitment is likely to develop through the learning mechanism
of attitude formation. As part of high-involvement management, individuals are selected
for organizations in which their values fi t, they are well trained, they are encouraged to
think for themselves, and they are treated fairly (e.g., receive equitable compensation).
Finally, satisfaction and commitment are not totally dependent on situational factors;
personality also can play a role. Some individuals have a propensity to be satisfi ed and
committed, whereas others are less likely to exhibit positive attitudes, no matter the actual
situation in which they work.97 In addition to one’s personality disposition, emotions can
also affect job attitudes. Thus, we discuss emotions in the workplace later in this chapter.
Attitude Change
Personality characteristics are believed to be rather stable, as we have seen, but attitudes are
more susceptible to change. Social forces, such as peer pressure or changes in society, act
on existing attitudes, so that over time attitudes may change, often in unpredictable ways.
In addition, in many organizations, managers fi nd they need to be active in changing em-
ployee attitudes. Although it is preferable for associates to have positive attitudes toward
the job, the manager, and the organization, many do not. When the object of the attitude
cannot be changed (for example, when a job cannot be redesigned), managers must work
affective commitment
Organizational commitment
due to one’s strong
positive attitudes toward
the organization.
normative commitment
Organizational commitment
due to feelings of obligation.
continuance
commitment
Organizational commitment
due to lack of better
opportunities.
c05.indd 189c05.indd 189 12/08/10 10:46 AM12/08/10 10:46 AM
190 Chapter 5 Personality, Intelligence, Attitudes, and Emotions
directly on attitudes. In such cases, it is necessary to develop a systematic approach to
change attitudes in favorable directions. We discuss two relevant techniques next.
Persuasive Communication
Most of us experience daily attempts by others to persuade us to change our attitudes.
Television, radio, and Internet advertisements are common forms of such persuasive com-
munication. Political campaigns are another form. Occasionally, a person who is virtu-
ally unknown at the beginning of a political campaign (such as Bill Clinton) can win an
election by virtue of extensive advertising and face-to-face communication.
The persuasive communication approach to attitude change consists of four elements:98
1. Communicator—the person who holds a particular attitude and wants to
convince others to share that attitude
2. Message—the content designed to induce the change in others’ attitudes
3. Situation—the surroundings in which the message is presented
4. Target—the person whose attitude the communicator wants to change
Several qualities of the communicator affect attitude change in the target. First, the
communicator’s overall credibility has an important effect on the target’s response to the
persuasion attempt. Research shows that people give more weight to persuasive messages
from people they respect.99 It is more diffi cult to reject messages that disagree with our
attitudes when the communicator has high credibility.
Second, people are more likely to change their attitudes when they trust the inten-
tions of the communicator. If we perceive that the communicator has something to gain
from the attitude change, we are likely to distrust his or her intentions. But if we believe
the communicator is more objective and less self-serving, we will trust his or her inten-
tions and be more likely to change our attitudes. Individuals who argue against their own
self-interests are effective at persuasion.100
Third, if people like the communicator or perceive that person to be similar to them
in interests or goals, they are more likely to be persuaded.101 This is one reason that movie
stars, athletes, and other famous people are used for television ads. These people are widely
liked and have characteristics that we perceive ourselves to have (correctly or incorrectly)
or that we would like to have.
Finally, if the communicator is attractive, people have a stronger tendency to be per-
suaded. The effects of attractiveness have been discussed in studies of job seeking and
political elections. The most notable example is the U.S. presidential election of 1960.
By many accounts, Richard Nixon had equal, if not superior, command of the issues in
the presidential debates that year, but the more handsome John Kennedy received higher
ratings from the viewing public and won the election.102
The message involved in the communication can also infl uence attitude change. One
of the most important dimensions of message content is fear arousal. Messages that arouse
fear often produce more attitude change.103 For example, a smoker who is told that smok-
ing is linked to heart disease may change his attitude toward smoking. The actual amount
of fear produced by the message also seems to play a role. If the smoker is told that smok-
ing makes teeth turn yellow, rather than being told of a link to heart disease, the fear is
weaker, and the resulting attitude change also is likely to be weaker.
Greater fear usually induces larger changes in attitudes, but not always. Three fac-
tors beyond amount of fear play a role:104 (1) the probability that negative consequences
c05.indd 190c05.indd 190 12/08/10 10:46 AM12/08/10 10:46 AM
Attitudes 191
will actually occur if no change in behavior is made, (2) the perceived effect of changing
behavior, and (3) the perceived ability to change behavior. Returning to our smoker, even
if the message regarding smoking risk arouses a great deal of fear, he still may not alter
his attitude if he does not believe that he is likely to develop heart disease, if he has been
smoking for so many years that he does not believe that quitting now will help the situa-
tion, or if he does not believe he can stop smoking.
So far, we have discussed how the communicator and the message affect attitude
change. In general, each affects the degree to which the target believes the attitude should
be changed. Frequently, however, people are motivated by factors outside the actual per-
suasion attempt. Such factors may be found in the situation in which persuasion is at-
tempted. We can see a good example of this when a person is publicly reprimanded. If you
have ever been present when a peer has been publicly chastised by an instructor, you may
have been offended by the action. Instead of changing your attitude about the student
or the student’s skills, you may have changed your attitude about the instructor. Other
situational factors include the reactions of those around you. Do they smile or nod their
heads in approval when the communicator presents her message? Such behaviors encour-
age attitude change, whereas disapproving behavior may infl uence you to not change your
attitudes.
Finally, characteristics of the target also infl uence the success of persuasion. For exam-
ple, people differ in their personalities, their perceptions, and the way they learn. Some are
more rigid and less willing to change their attitudes—even when most others believe that
they are wrong. Locus of control and other characteristics also infl uence attitudes. People
with high self-esteem are more likely to believe that their attitudes are correct, and they
are less likely to change them. Therefore, it is diffi cult to predict precisely how different
people will respond, even to the same persuasive communication. The effective manager
is prepared for this uncertainty.
Cognitive Dissonance
Another way in which attitudes can change involves cognitive dissonance. Like bal-
ance and congruity theories, discussed earlier in this chapter, dissonance theory deals
withconsistency.105 In this case, the focus is usually on consistency between attitudes
andbehaviors—or, more accurately, inconsistency between attitudes and behaviors. For
example, a manager may have a strong positive attitude toward incentive compensation,
which involves paying people on the basis of their performance. This manager, however,
may refuse workers’ requests for such a compensation scheme. By refusing, she has cre-
ated an inconsistency between an attitude and a behavior. If certain conditions are met, as
explained below, this inconsistency will create an uneasy feeling (dissonance) that causes
the manager to change her positive attitude.
What are the key conditions that lead to dissonance and the changing of an attitude?
There are three.106 First, the behavior must be substantially inconsistent with the attitude
rather than just mildly inconsistent. Second, the inconsistent behavior must cause harm
or have negative consequences for others. If no harmful or negative consequences are
involved, the individual exhibiting the inconsistent behavior can more easily move on
without giving much consideration to the inconsistency. Third, the inconsistent behavior
must be voluntary and not forced, or at least the person must perceive it that way.
In our example, the manager’s behavior satisfi es the fi rst two conditions. It was sub-
stantially inconsistent with her attitude, and it had negative consequences for the workers
cognitive dissonance
An uneasy feeling produced
when a person behaves
in a manner inconsistent
with an existing attitude.
c05.indd 191c05.indd 191 12/08/10 10:46 AM12/08/10 10:46 AM
192 Chapter 5 Personality, Intelligence, Attitudes, and Emotions
MANAGERIAL ADVICE
In 1987, a major-ity, 61.1 percent, of Americans re-
sponded that they were
satisfi ed with their jobs.
This was the fi rst year
that the Conference
Board, a global inde-
pendent membership
organization that col-
lects and disseminates
information for senior
executives around the
world, surveyed work-
ers about their job sat-
isfaction. At the end of
2009, following a steady decrease
over the years, that fi gure had plum-
meted to 45.3 percent. A less-scientifi c
MSNBC poll of almost 45,000 people
found that less than 34 percent of re-
spondents were satisfi ed or somewhat
satisfi ed with their jobs and 11.5 per-
cent hated every part of their jobs.
The Conference Board survey
found that while satisfaction has de-
creased for all age groups, it is par-
ticularly bad for younger workers.
Less than 36 percent of those under
25 years old are satisfi ed with their
jobs, as compared with a satisfac-
tion rate of 47 percent for those 45
to 54 years old. These results also
held across all income
brackets. Furthermore,
satisfaction decreased
for all specifi c aspects
of one’s job, including:
job design, organiza-
tional health, manage-
rial quality, and extrin-
sic rewards.
Why are Ameri-
cans so unhappy with
their jobs? One could
argue it is because of
the economic down-
turn experienced dur-
ing 2008 and 2009.
Associates are required to do more,
are afraid of losing their jobs, and
are likely to receive fewer extrin-
sic rewards (“no raises this year!”).
However, this is not the entire story.
“It says something troubling about
work in America. It is not about the
business cycle or one grumpy genera-
tion,” says Linda Barrington, manag-
ing director of human capital at the
Conference Board. On of the major
reasons that respondents were dis-
satisfi ed with their jobs was because
the jobs were uninteresting. Ratings
of interest in one’s work dropped al-
most 19 percentage points between
1987 and 2009, with only about half
of respondents currently fi nding their
jobs interesting. Americans are fi nding
their jobs increasingly boring and un-
engaging. Other reasons given for job
dissatisfaction included salaries that
were not keeping up with infl ation, job
insecurity, and health care costs.
These fi ndings should be a wake-
up call for employers. John Gibbons,
program director of employee en-
gagement research and services at
the Conference Board, says “Wide-
spread job dissatisfaction negatively
affects employee behavior and reten-
tion, which can impact enterprise-
level success.” Lynn Franco, director
of the Conference Board’s Consumer
Research Center, concurs, “What’s
really disturbing about growing job
dissatisfaction is the way it can play
into the competitive nature of the U.S.
work force down the road and on the
growth of the U.S. economy—all in
a negative way.” John Hollon warns,
“my counsel for managers and ex-
ecutives is simple: If you ignore these
numbers, you do so at your own
peril.” It is imperative that managers
pay attention to these fi ndings, given
the effects that low satisfaction and
commitment can have on the climate,
functioning, and bottom-line success
of an organization.
Job Satisfaction Takes a Dive!
Sources: http://www.conference-board.org/aboutus/about.cfm; The Conference Board. Jan. 5, 2010, “U.S.
Job Satisfaction at Lowest Level in Two Decades,” at http://www.conference-board.org/utilities/pressDetail.
cfm?press_ID�3820. MSNBC, Jan. 5, 2010. “Are you satisfi ed with your job?” at http://business.newsvine.com/_
question/2010/01/05/3716711-are-you-satisfi ed-with-your-job?threadId�759420&pc�25&sp�25#short%20com-
ment; MSNBC, Jan. 5, 2010. “Job satisfaction falls to a record low: Economists warn discontent could stifl e innovation,
hurt U.S. productivity,” at C:\Documents and Settings\Administrator\My Documents\Americans’ job satisfaction falls to
record low – Careers- msnbc_com.mht; J. Hollon. Jan. 5, 2010. “A Ticking Time Bomb: Job Satisfaction Hits Record-Low
Levels,” Workforce Management, at C:\Documents and Settings\Administrator\My Documents\Workforce Blogs – The
Business of Management.mht.
©iStockphoto
c05.indd 192c05.indd 192 12/08/10 10:46 AM12/08/10 10:46 AM
http://www.conference-board.org/aboutus/about.cfm
http://business.newsvine.com/_question/2010/01/05/3716711-are-you-satisfied-with-your-job?threadId759420&pc25&sp25#short%20com-ment
http://business.newsvine.com/_question/2010/01/05/3716711-are-you-satisfied-with-your-job?threadId759420&pc25&sp25#short%20com-ment
http://www.conference-board.org/utilities/pressDetail.cfm?press_ID=3820
http://www.conference-board.org/utilities/pressDetail.cfm?press_ID=3820
Emotions 193
who wanted incentive pay. We have no way of knowing whether the third condition was
met because we do not know whether someone higher in the organization ordered the
manager to refuse the requests for incentive compensation or whether a union agreement
prohibited such a compensation scheme. If the manager’s behavior was not forced by a
higher-level manager or an agreement, dissonance is more likely to occur, leading to a
change of the manager’s attitude toward incentive pay from positive to negative.
If an executive had wanted to change this manager’s attitude toward incentive pay,
he could have gently suggested that such pay not be used. If the manager acted on this
suggestion, she may have experienced dissonance and changed the attitude because her
behavior was at least partly voluntary. She was not required to act in a manner inconsistent
with her attitude, but she did so anyway. To eliminate the uneasy feeling associated with
the inconsistent behavior, she may convince herself that she does not like incentive pay as
much as she previously thought.
Emotions
During a sales force team meeting, Chad became frustrated with team leader Bob’s pre-
sentation. He felt that Bob was ignoring the needs of his unit. In a pique of anger, Chad
yelled out that Bob was hiding something from everyone and being dishonest. Bob’s reac-
tion to Chad’s outburst was to slam his fi st on the table and tell him to be quiet or leave.
Next door, in the same company, Susan had just learned that her team had won a coveted
account. She jumped with joy and was all smiles when she ran down the hall to tell her
teammates. Everyone she passed grinned and felt better when they saw Susan running past
their desks.
Chad, Bob, and Susan are all displaying their emotions at work. Despite the com-
mon norms that associates should hide their emotions when they are at work,107 people
are emotional beings, and emotions play a big role in everyday organizational behavior.
Indeed, organizational scholars have recently begun studying the role emotions play at
work,108 and organizations have become more concerned with the emotions of their em-
ployees. For example, Douglas Conant, CEO of Campbell Soup, says that in his company
care is taken to make sure that employees focus their emotions on their jobs, so that em-
ployees “fall in love with (the) company’s agenda.”109
Emotions are complex reactions that have both a physical and a mental component.
These reactions include anger, happiness, anxiety, pride, contentment, and guilt. Emo-
tional reactions include a subjective feeling accompanied by changes in bodily functioning
such as increased heart rate or blood pressure.110 Emotions can play a part in organi-
zational functioning in several ways. First, associates’ emotions can directly affect their
behavior. For example, angry associates may engage in workplace violence111 or happy
employees may be more likely to help other people on the job.112 Another way in which
emotions come into play at work is when the nature of the job calls for associates to
display emotions that they might not actually be feeling. For example, on a rocky airplane
ride, fl ight attendants have to appear calm, cool, and collected, while reassuring passen-
gers that everything is okay. However, these fl ight attendants may have to do this while
hiding their own fear and panic. This dynamic is called emotional labor. Finally, both
business scholars and organizations have become concerned with what has been termed
emotional intelligence. We turn now to discussions of these three roles thatemotions play
inorganizational behavior.
emotions
Complex subjective reactions
that have both a physical
and mental component.
c05.indd 193c05.indd 193 12/08/10 10:46 AM12/08/10 10:46 AM
194 Chapter 5 Personality, Intelligence, Attitudes, and Emotions
Direct Effects of Emotions on Behavior
Emotions can have several direct causal effects on behavior. The relationship between
emotions and other important behaviors, such as job performance, is less clear. While it
would seem most likely that positive emotions would always lead to high performance,
this is not always the case. In some instances, negative emotions, such as anger, can serve as
a motivator. Research on creativity demonstrates this point. Some researchers have found
that positive emotions increase creativity,113 while others have found that negative emo-
tions lead to greater creativity.114 Positive emotions should lead to greater creativity be-
cause when people feel good they are more likely to be active and inquisitive. On the other
hand, negative emotions, such as fear, can serve as a signal that something is amiss, leading
people to search for creative solutions to solve the problem. Indeed, a recent study found
that people were most creative when they were experiencing emotional ambivalence, that
is, both positive and negative emotions at the same time.115
The direct effects of emotions can be either benefi cial or harmful to organizational
effectiveness. The impact of these emotions, whether negative or positive, is even greater
when one considers the phenomenon of emotional contagion. Emotional contagion oc-
curs when emotions experienced by one or a few members of a work group spread to
other members.116 One study found that leaders’ emotions were particularly important
in infl uencing the emotions of followers.117 This study indicated that charismatic leaders
have a positive infl uence on organizational effectiveness because they are able to induce
positive emotions in their followers. Thus, angry and anxious leaders are likely to develop
followers who are angry and anxious, whereas leaders who are happy and passionate about
their work are likely to develop followers who experience the same emotions. Exhibit 5-7
summarizes the direct effects of emotions.
emotional contagion
Phenomenon where emotions
experienced by one or a few
members of a work group
spread to other members.
EXHIBIT 5-7 The Direct Effects of Emotion
Positive Emotions Infl uence:
Social activity
Altruism and helping behavior
Effective confl ict resolution
Job satisfaction
Motivation
Organizational citizenship behavior
Negative Emotions Infl uence:
Aggression against co-workers
Aggression toward the organization
Workplace deviance
Job dissatisfaction
Decision making
Negotiation outcomes
Sources: S. Lyubomirsky, L. King, & E. Deiner. 2005. The benefi ts of frequent positive affect: Does happiness
lead to success? Psychological Bulletin, 131: 803–855; T.A. Judge, B.A. Scott, & R. Ilies. 2006. Hostility, job
attitudes, and workplace deviance: Test of a multilevel model. Journal of Applied Psychology, 91: 126–138;
M.S. Hershcovis, N. Turner, J. Barling, K.A. Arnols, K.E. Dupre, M. Inness, M.M. LeBlanc, & N. Sivanathan.
2007. Predicting workplace aggression: A meta-analysis. Journal of Applied Psychology, 92; 228–238; A.P.
Brief, H.M. Weiss. 2002. Organizational behavior: Affect in the workplace. In S.T. Fiske (Ed.), Annual Review
of Psychology, 53: 279–307. Palo Alto, CA: Annual Reviews.
c05.indd 194c05.indd 194 12/08/10 10:46 AM12/08/10 10:46 AM
Emotions 195
Emotional Labor
Many service and sales jobs require that individuals display certain emotions, regardless of
what they are really experiencing. For example, fl ight attendants are expected to be warm
and cordial, call center employees are expected to keep their cool when customers are
hostile toward them, and sales associates are expected to be enthusiastic about the product
they are selling, no matter what they actually feel. The process whereby associates must
display emotions that are contrary to what they are feeling is termed emotional labor.118
Organizations often indicate to employees what emotions they must express and under
what circumstances. When these required emotions, or display rules, are contrary to what
associates are actually feeling, they can experience stress, emotional exhaustion, and burn-
out.119 Emotional labor does not always lead to overstressed employees. When associates
actually come to feel the emotions they are required to display, they can experience posi-
tive outcomes such as greater job satisfaction.120
Even when associates may not feel the emotions they are required to express, several
factors can infl uence whether this acting will have a negative outcome on associates’ well-
being. First, the manner in which supervisors enforce display rules can infl uence whether
emotional labor is harmful to associates.121 When supervisors are quite demanding, associ-
ates will become more exhausted. Another factor that infl uences the effects of emotional
labor is the self-identities of associates.122 When associates have a strong self-identity as
a service worker or a caregiver then they will be less likely to experience negative effects
from emotional labor. For example, a hospice care worker may feel tired and frustrated,
but behave in a caring and nurturing manner with her patients. If the care worker has a
strong self-identity as a caregiver, she will experience less exhaustion from her emotional
labor. Finally, when associates have networks of supportive people and caring mentors, the
negative effects of emotional labor will be mitigated.123
Emotional Intelligence
Are some people just better dealing with emotions, theirs and others, than are otherpeople?
The past decade or so has seen an explosion in what has been termed the concept of
emotional intelligence in both the study and practice of management. The best- accepted
defi nition of emotional intelligence (EI) is that it is the ability to
• Accurately appraise one’s own and others’ emotions.
• Effectively regulate one’s own and others’ emotions.
• Use emotion to motivate, plan, and achieve.124
A person displaying high emotional intelligence can accurately determine his or her
own emotions and the effect those emotions will have on others, then go on to regulate
the emotions to achieve his or her goals.
Emotional intelligence has been linked to career success, leadership effectiveness,
managerial performance, and performance in sales jobs.125 It also is the subject of many
management development programs, popular books,126 and articles that may at times
infl ate the value of emotional intelligence relative to cognitive intelligence.127 The specifi c
abilities generally associated with emotional intelligence include:128
• Self-awareness. Associates with high self-awareness understand how their
feelings, beliefs, and behaviors affect themselves and others. For example, a
supervisor knows that her reaction to a valuable (and otherwise high-performing)
emotional labor
The process whereby
associates must display
emotions that are contrary
to what they are feeling.
emotional intelligence
The ability to accurately
appraise one’s own and
others’ emotions, effectively
regulate one’s own and others’
emotions, and use emotion to
motivate, plan, and achieve.
c05.indd 195c05.indd 195 12/08/10 10:46 AM12/08/10 10:46 AM
196 Chapter 5 Personality, Intelligence, Attitudes, and Emotions
associate’s chronic lateness and excuses is one of anger, but she realizes that if she
displays this anger, it will cause the associate to withdraw even further.
• Self-regulation. Self-regulation is the ability to control one’s emotions. The
supervisor may feel like yelling at the associate or being punitive in making work
assignments; however, if she is high in self-regulation, she will choose her words
and actions carefully. She will behave in a manner that will more likely encourage
the associate to come to work on time rather than make the associate withdraw
even more.
• Motivation or drive. This characteristic is the same as achievement motivation,
discussed previously in this chapter, and drive, discussed above under trait
theories. Associates with high EI want to achieve for achievement’s sake alone.
They always want to do things better and seek out feedback about their progress.
They are passionate about their work.
• Empathy. Effective empathy means thoughtfully considering others’ feelings
when making decisions and weighting those feelings appropriately, along with
other factors. Consider again our example of the supervisor dealing with the
tardy associate. Suppose she knows that the associate is frequently late because
he is treated poorly by the work group. The supervisor can display empathy by
acknowledging this situation and can act on it by attempting to change work
arrangements rather than punishing the associate for being late. Thus, she can
remove an obstacle for the associate and perhaps retain an associate who performs
well and comes to work on time.
• Social skill. Social skill refers to the ability to build effective relationships with
the goal of moving people toward a desired outcome. Socially skilled associates
know how to build bonds between people. Often, leaders who appear to be
THE STRATEGIC LENS
Understanding personality, intel-ligence, attitudes, and emo-tions enables managers to
more effectively manage the behavior
of their associates. Selecting new asso-
ciates based on personality and intel-
ligence can have an impact on organi-
zational performance, as demonstrated
by Outback Steakhouse and the Na-
tional Football League. Hiring associ-
ates who fi t its culture in turn enables
an organization to better implement
its strategy, as illustrated by the suc-
cess of Patricia Harris at McDonald’s.
Organizations can further increase
existing associates’ organizational fi t,
performance, and tenure by creating
work environments that lead to positive
attitudes and emotionally healthy envi-
ronments. Furthermore, from the exam-
ples presented throughout the chapter
and summarized above, we can see
how knowledge of personality, intelli-
gence, attitudes, and emotions allows
executives to more effectively imple-
ment their strategies through manage-
ment of behavior in their organizations.
Critical Thinking Questions
1. Specifi cally, how can you use
knowledge of personality, attitudes,
intelligence, and emotions to make
better hiring decisions?
2. If top executives wanted to imple-
ment a strategy that emphasized
innovation and new products, how
could they use knowledge of per-
sonality, attitudes, and emotions to
affect the organization’s culture in
ways to enhance innovation?
3. How could a manager use know-
ledge about personality and atti-
tudes to form a high-performance
work team?
c05.indd 196c05.indd 196 12/08/10 10:46 AM12/08/10 10:46 AM
What This Chapter Adds to Your Knowledge Portfolio 197
socializing with co-workers are actually working to build relationships and
exercise their infl uence in a positive manner.
While emotional intelligence is quite a popular concept right now, it is not without its
critics.129 One major criticism is that emotional intelligence is not intelligence at all, but
rather a conglomeration of specifi c social skills and personality traits. Another criticism is
that sometimes emotional intelligence is so broadly defi ned that it is meaningless. None-
theless, the basic abilities that make up emotional intelligence are important infl uences on
organizational behavior, whether they form one construct called emotional intelligence or
are simply considered alone.
What This Chapter Adds to Your
Knowledge Portfolio
In this chapter, we have discussed personality in some detail. We have seen how personality develops
and how important it is in the workplace. We have also discussed intelligence. If an organization is
to be successful, its associates and managers must understand the effects of personality and intelli-
gence and be prepared to act on this knowledge. Moving beyond enduring traits and mental ability,
we have examined attitude formation and change. Without insights into attitudes, associates and
managers alike would miss important clues about how a person will act in the workplace. Finally,
we have briefl y examined emotions and their various roles in behavior and organizational life. More
specifi cally, we have made the following points:
• Personality is a stable set of characteristics representing the internal properties of an individual.
These characteristics, or traits, are relatively enduring, are major determinants of behavior,
and infl uence behavior across a wide variety of situations.
• Determinants of personality include heredity and environment. Three types of studies have
demonstrated the effects of heredity: (1) investigations of identical twins, (2) assessments
of newborns and their behavior later in life, and (3) direct examinations of genes. Studies
of environmental effects have emphasized childhood experiences as important forces in
personality development.
• There are many aspects of personality. Five traits, however, have emerged as particularly
important in the workplace. These traits, collectively known as the Big Five, are extraversion,
conscientiousness, agreeableness, emotional stability, and openness to experience.
• Extraversion (the degree to which a person is outgoing and derives energy from being
around people) tends to affect overall job performance, success in team interactions, and
job satisfaction. For performance, fi t with the job is important, as extraverts have at least
modest advantages in occupations calling for a high level of interaction with other people,
whereas introverts appear to have advantages in occupations calling for more solitary work.
• Conscientiousness (the degree to which a person focuses on goals and works toward them
in a disciplined way) also affects job performance, success as a team member, and job
satisfaction. Higher levels of conscientiousness tend to be positive for these outcomes.
• Agreeableness (the degree to which a person is easygoing and tolerant) does not have
simple, easily specifi ed effects on individual job performance but does appear to contribute
positively to successful interactions on a team.
• Emotional stability (the degree to which a person handles stressful, high-demand situations
with ease) affects job performance, success as a team member, and job satisfaction. Higher
levels of emotional stability tend to be positive.
• Openness to experience (the degree to which a person seeks new experiences and thinks
creatively about the future) does not have simple links to overall job performance, success
c05.indd 197c05.indd 197 12/08/10 10:46 AM12/08/10 10:46 AM
198 Chapter 5 Personality, Intelligence, Attitudes, and Emotions
at teamwork, or job satisfaction, but individuals scoring
higher on this aspect of personality do appear to have
an edge in specifi c tasks calling for vision and creativity.
• The Big Five personality traits may play a role in high-
involvement management. Certain combinations
of these traits seem to provide a foundation for the
competencies needed by managers and associates.
Absent these trait combinations, individuals may still
be effective in high-involvement systems, but they
may need to work a little harder.
• A Big Five assessment can be useful in selecting new
associates and managers but must be combined with
other tools, such as structured interviews and evaluations
of the specifi c skills needed for a particular job.
• Beyond the Big Five, several cognitive and motivational
personality concepts are important in the workplace.
Cognitive concepts correspond to perceptual and
thought processes and include locus of control,
authoritarianism, social dominance orientation, and self-
monitoring. Motivational concepts correspond to needs
in individuals and are directly involved in energizing and
maintaining overt behaviors. They include achievement
motivation and approval motivation.
• There are many areas of intelligence, including
number aptitude, verbal comprehension, and
perceptual speed. Most psychologists who have
extensively studied intelligence believe these various
areas combine to form a single meaningful intelligence
factor. This general intelligence factor has been found
to predict workplace outcomes.
• An attitude is a persistent mental state of readiness
to feel and behave in favorable or unfavorable ways
toward a specifi c person, object, or idea. Attitudes
consist of a cognitive element, an affective element,
and a behavioral element.
• Attitudes may be learned as a result of direct
experience with an object, person, or idea. Unfavorable
experiences are likely to lead to unfavorable attitudes,
and favorable experiences to favorable attitudes. Attitudes may also form as the result of
self-perception, where an individual behaves in a certain way and then concludes he has an
attitude that matches the behavior. Finally, attitudes may form on the basis of a need for
consistency. We tend to form attitudes that are consistent with our existing attitudes.
• Job satisfaction and organizational commitment are two of the most important
workplace attitudes. Job satisfaction is a favorable or unfavorable view of the job, whereas
organizational commitment corresponds to how strongly an individual identifi es with and
values being associated with the organization. Both of these attitudes affect intentions
to stay in the job, actual decisions to stay, and absenteeism. They are also related to job
performance, though not as strongly as some other factors. Attitudes may change through
exposure to persuasive communications or cognitive dissonance. Persuasive communication
consists of four important elements: the communicator, message, situation, and target.
Dissonance refers to inconsistencies between attitude and behavior. Under certain
?back to the knowledge objectives
1. What is meant by the term personality? What key be-
liefs do psychologists traditionally hold about personal-
ity traits?
2. What are the Big Five traits, and how do they infl uence
behavior and performance in the workplace? Give an
example of someone you know whose personality did
not fi t the job he or she had. This could be a person in
an organization in which you worked, or it could be a
person from a school club or civic organization. What
was the outcome? If you had been the individual’s man-
ager, how would you have attempted to improve the
situation?
3. Describe a situation in which a manager’s or a friend’s
locus of control, authoritarianism, social dominance
orientation, self-monitoring, need for achievement, or
approval motivation had an impact on your life.
4. What is intelligence, and what is its effect in the work-
place?
5. How are attitudes similar to and different from per-
sonality? How do attitudes form? How can managers
change attitudes in the workplace? Assume that the
target of the attitude cannot be changed (that is, the
job, boss, technology, and so on cannot be changed).
Be sure to address both persuasive communication and
dissonance.
6. What is the relationship between emotions and attitudes?
Describe the emotions displayed by a past or current
boss and explain how those emotions affected your job.
c05.indd 198c05.indd 198 12/08/10 10:46 AM12/08/10 10:46 AM
Human Resource Management Applications 199
conditions, a behavior that is inconsistent with an existing attitude causes the attitude to
change. Key conditions include: (1) the behavior being substantially inconsistent with the
attitude, (2) the behavior causing harm or being negative for someone, and (3) the behavior
being voluntary.
• Emotions are the subjective reactions associates experience that contain both a psychological
and physiological component. Emotions can infl uence organizational behavior directly, as
the basis of emotional labor, or through associates’ emotional intelligence.
Thinking about Ethics
1. Is it appropriate for an organization to use personality tests to screen applicants for jobs?
Should organizations reject applicants whose personalities do not fi t a particular profi le,
ignoring the applicants’ performance on previous jobs, their capabilities, and their
motivation?
2. Should organizations use intelligence tests to screen applicants even though the accuracy of
such tests is questioned by some? Why or why not?
3. Are there right and wrong values? How should values be used to manage the behavior of
associates in organizations?
4. Can knowledge of personality, attitudes, and values be used inappropriately? If so, how?
5. Is it appropriate to change people’s attitudes? If so, how can a person’s attitudes be changed
without altering that person’s values?
Key Terms
personality, p. 170
extraversion, p. 172
conscientiousness, p. 173
agreeableness, p. 173
emotional stability, p. 174
openness to experience, p. 174
locus of control, p. 177
authoritarianism, p. 177
social dominance
orientation, p. 178
self-monitoring, p. 178
achievement
motivation, p. 178
approval motivation, p. 179
intelligence, p. 181
attitude, p. 182
affective commitment, p. 189
normative commitment,
p. 189
continuance commitment,
p. 189
cognitive dissonance, p. 191
emotions, p. 193
emotional contagion, p. 194
emotional labor, p. 195
emotional intelligence, p. 195
Human Resource Management Applications
Personality traits and intelligence are often used in employee selection. Human Resource
Management (HRM) departments are often charged with developing selection procedures
or choosing vendors of selection tests. Furthermore, HRM departments are often responsible
for conducting job analyses to determine what traits and abilities are necessary to perform
various jobs.
HRM departments conduct employee surveys and climate audits to assess the satisfaction and
commitment of current employees. Exit interviews may also be conducted to determine why people
leave the organization.
Finally, Employee Assistance Programs (EAPs) are part of the HRM function. These programs
help employees cope with problems resulting from emotional strain on the job.
c05.indd 199c05.indd 199 12/08/10 10:46 AM12/08/10 10:46 AM
200 Chapter 5 Personality, Intelligence, Attitudes, and Emotions
building your human capital
Big Five Personality Assessment
Different people have different personalities, and these personalities can affect outcomes in the
workplace. Understanding your own personality can help you to understand how and why you
behave as you do. In this installment of Building Your Human Capital, we present an assessment
tool for the Big Five.
Instructions
In this assessment, you will read 50 phrases that describe people. Use the rating scale below to
indicate how accurately each phrase describes you. Rate yourself as you generally are now, not as
you wish to be in the future; and rate yourself as you honestly see yourself. Keep in mind that very
few people have extreme scores on all or even most of the items (a “1” or a “5” is an extreme score);
most people have midrange scores for many of the items. Read each item carefully, and then circle
the number that corresponds to your choice from the rating scale.
1 2 3 4 5
Not at
all like me
Somewhat
unlike me
Neither like
nor unlike me
Somewhat
like me
Very much
like me
1. Am the life of the party.1 2 3 4 5
2. Feel little concern for others.1 2 3 4 5
3. Am always prepared.1 2 3 4 5
4. Get stressed out easily.1 2 3 4 5
5. Have a rich vocabulary.1 2 3 4 5
6. Don’t talk a lot.1 2 3 4 5
7. Am interested in people.1 2 3 4 5
8. Leave my belongings around.1 2 3 4 5
9. Am relaxed most of the time.1 2 3 4 5
10. Have diffi culty understanding abstract ideas.1 2 3 4 5
11. Feel comfortable around people.1 2 3 4 5
12. Insult people.1 2 3 4 5
13. Pay attention to details.1 2 3 4 5
14. Worry about things.1 2 3 4 5
15. Have a vivid imagination.1 2 3 4 5
16. Keep in the background.1 2 3 4 5
17. Sympathize with others’ feelings.1 2 3 4 5
18. Make a mess of things.1 2 3 4 5
19. Seldom feel blue.1 2 3 4 5
20. Am not interested in abstract ideas.1 2 3 4 5
21. Start conversations.1 2 3 4 5
22. Am not interested in other people’s problems.1 2 3 4 5
23. Get chores done right away.1 2 3 4 5
c05.indd 200c05.indd 200 12/08/10 10:46 AM12/08/10 10:46 AM
Building Your Human Capital 201
24. Am easily disturbed.1 2 3 4 5
25. Have excellent ideas.1 2 3 4 5
26. Have little to say.1 2 3 4 5
27. Have a soft heart.1 2 3 4 5
28.Often forget to put things back in their
proper place. 1 2 3 4 5
29. Get easily upset.1 2 3 4 5
30. Do not have a good imagination.1 2 3 4 5
31. Talk to a lot of different people at parties.1 2 3 4 5
32. Am not really interested in others.1 2 3 4 5
33. Like order.1 2 3 4 5
34. Change my mood a lot.1 2 3 4 5
35. Am quick to understand things.1 2 3 4 5
36. Don’t like to draw attention to myself.1 2 3 4 5
37. Take time out for others.1 2 3 4 5
38. Shirk my duties.1 2 3 4 5
39. Have frequent mood swings.1 2 3 4 5
40. Use diffi cult words.1 2 3 4 5
41. Don’t mind being the center of attention.1 2 3 4 5
42. Feel others’ emotions.1 2 3 4 5
43. Follow a schedule.1 2 3 4 5
44. Get irritated easily.1 2 3 4 5
45. Spend time refl ecting on things.1 2 3 4 5
46. Am quiet around strangers.1 2 3 4 5
47. Make people feel at ease.1 2 3 4 5
48. Am exact in my work.1 2 3 4 5
49. Often feel blue.1 2 3 4 5
50. Am full of ideas.1 2 3 4 5
Scoring Key
To determine your scores, combine your responses to the items above as follows:
Extraversion �(Item 1 � Item 11 � Item 21 � Item 31 � Item 41) � (30 � (Item 6 � Item 16 �
Item 26 � Item 36 � Item 46))
Conscientiousness �(Item 3 � Item 13 � Item 23 � Item 33 � Item 43 � Item 48) � (24 –
(Item 8 � Item 18 � Item 28 � Item 38))
Agreeableness �(Item 7 � Item 17 � Item 27 � Item 37 � Item 42 � Item 47) � (24 –
(Item 2 � Item 12 � Item 22 � Item 32))
Emotional stability �(Item 9 � Item 19) � (48 – (Item 4 � Item 14 � Item 24 � Item 29 �
Item 34 � Item 39 � Item 44 � Item 49))
Openness to experience �(Item 5 � Item 15 � Item 25 � Item 35 � Item 40 � Item 45 �
Item 50) � (18 – (Item 10 � Item 20 � Item 30))
Scores for each trait can range from 10 to 50. Scores of 40 and above may be considered high, while
scores of 20 and below may be considered low.
Source: International Personality Item Pool. 2001. A Scientifi c Collaboration for the Development of Advanced Measures
of Personality Traits and Other Individual Differences (http://ipip.ori.org).
c05.indd 201c05.indd 201 12/08/10 10:46 AM12/08/10 10:46 AM
http://ipip.ori.org
202 Chapter 5 Personality, Intelligence, Attitudes, and Emotions
team exercise
Experiencing Emotional Labor
Have you ever been forced to smile at someone who was annoying you? Have you ever had to be
calm when you felt very afraid? If so, you have probably engaged in emotional labor. The purpose
of this exercise is to examine how emotional labor can affect us in different ways and the factors that
impact the toll that emotional labor can take on us.
an organizational behavior moment
Whatever Is Necessary!
Marian could feel the rage surge from deep within her. Even
though she was usually in control of her behavior, it was not easy
to control her internal emotions. She could sense her rapid pulse
and knew that her face was fl ushed. But she knew that her emo-
tional reaction to the report would soon subside in the solitary
confi nes of her executive offi ce. She would be free to think about
the problem and make a decision about solving it.
Marian had joined the bank eight months ago as manager in
charge of the consumer loan sections. There were eight loan sec-
tions in all, and her duties were both interesting and challenging.
But for some reason there had been a trend in the past six months
of decreasing loan volume and increasing payment delinquency.
The month-end report to which she reacted showed that the past
month was the worst in both categories in several years.
Vince Stoddard, the president, had been impressed by her
credentials and aggressiveness when he hired her. Marian had been
in the business for 10 years and was the head loan offi cer for one
of the bank’s competitors. Her reputation for aggressive pursuit of
business goals was almost legendary among local bankers. She was
active in the credit association and worked long, hard hours. Vince
believed that she was the ideal person for theposition.
When he hired her, he had said, “Marian, you’re right for the
job, but I know it won’t be easy for you. Dave Kattar, who heads
one of the loan sections, also wanted the job. In fact, had you turned
down our offer, it would have been Dave’s. He is well liked around
here, and I also respect him. I don’t think you’ll have any problems
working with him, but don’t push him too hard at fi rst. Let him get
used to you, and I think you’ll fi nd him to be quite an asset.”
But Dave was nothing but a “pain in the neck” for Marian.
She sensed his resentment from the fi rst day she came to work.
Although he never said anything negative, his aggravating way
of ending most conversations with her was, “Okay, Boss Lady.
Whatever you want is what we’ll do.”
When loan volume turned down shortly after her arrival,
she called a staff meeting with all of the section heads. As she
began to explain that volume was off, she thought she noticed
several of the section heads look over to Dave. Because she saw
Dave only out of the corner of her eye, she couldn’t be certain,
but she thought he winked at the other heads. That action im-
mediately angered her—and she felt her face fl ush. The meeting
accomplished little, but each section head promised that the next
month would be better.
In fact, the next month was worse, and each subsequent
month followed that pattern. Staff meetings were now more
frequent, and Marian was more prone to explode angrily with
threats of what would happen if they didn’t improve. So far she
had not followed through on any threats, but she thought that
“now” might be the time.
To consolidate her position, she had talked the situation over
with Vince, and he had said rather coolly, “Whatever you think
is necessary.” He hadn’t been very friendly toward her for several
weeks, and she was worried about that also.
“So,” Marian thought to herself, “I wonder what will hap-
pen if I fi re Dave. If I get him out of here, will the others shape
up? On the other hand, Vince might not support me. But maybe
he’s just waiting for me to take charge. It might even get me back
in good graces with him.”
Discussion Questions
1. What role did personality play in the situation at the
bank? Which of the Big Five personality traits most clearly
infl uenced Marian and Dave? Which of the cognitive and
motivational aspects of personality played a role?
2. Working within the bounds of her personality, what should
Marian have done when trouble fi rst seemed to be brewing?
How could she have maintained Dave’s job satisfaction and
commitment?
3. How should Marian proceed now that the situation has
become very diffi cult?
c05.indd 202c05.indd 202 12/08/10 10:46 AM12/08/10 10:46 AM
Endnotes 203
STEPS
1. At the beginning of class, assemble into teams of six to eight people.
2. During the next 30 minutes of class, each individual will be required to follow emotional
display rules for one of the following emotions:
a. Happiness
b. Anger
c. Compassion and caring
d. Fear
Assign the display rules so that at least one person is displaying each emotion.
3. Each person is to display his or her assigned emotion during the next 30 minutes of class
lecture or activity—no matter what he or she actually feels!
4. At the end of the 30 minutes (or when instructed by your teacher), re-form into groups and
address the following questions:
a. How diffi cult was it for you to display your assigned emotion? Was your assigned emotion
different from how you actually felt? Did your felt emotions begin to change to coincide
with your displayed emotion?
b. To what extent did the type of emotion required (e.g., happiness versus anger) infl uence
your reaction to this exercise?
c. How much longer could you have continued displaying your assigned emotion? Why?
5. Appoint a spokesperson to present the group’s conclusions to the entire class.
Source: Adapted from Experiences in Management and Organizational Behavior, 4th ed. New York: John Wiley &
Sons, 1997.
Endnotes
1. Barrick, M.R., & Mount, M.K. 1991. The Big Five personality
dimensions and performance: A meta-analysis. Personnel Psychol-
ogy, 44: 1–26.
2. Hough, L.M., Oswald, F.L., & Ployhart, R.E. 2001. Determinants,
detection, and amelioration of adverse impact in personnel selec-
tion procedures: Issues, evidence and lessons learned. International
Journal of Selection and Assessment, 9: 152–194; Schmidt, F.L., &
Hunter, J.E. 1998. The validity and utility of selection methods in
personnel psychology: Practical and theoretical implications of 85
years of research fi ndings. Psychological Bulletin, 124: 262–274.
3. Marcus, B., Lee, K., & Ashton, M.C. 2007. Personality dimen-
sions explaining relationships between integrity tests and coun-
terproductive behavior: Big Five, or one in addition? Personnel
Psychology, 60: 1–35.
4. Kristof-Brown, A.L., Zimmerman, R.D., & Johnson, E.C. 2005.
Consequences of individuals’ fi t at work: A meta-analysis of person-
job, person-organization, person-group, and person-supervisor fi t.
Personnel Psychology, 58: 281–342; Arthur, W., Bell, S.T., Villado,
A.J., & Doverspike, D. 2006. The use of person-organization fi t
in employment decision making: An assessment of its criterion
related validity. Journal of Applied Psychology, 91: 786–801.
5. McCulloch, M.C., & Turban, D.B. 2007. Using person-organi-
zation fi t to select employees for high turnover jobs. International
Journal of Selection and Assessment, 15: 63.
6. Peterson, R.S., Smith, D.B., & Martorana, P.V. 2003. The impact
of chief executive offi cer personality on top management team
dynamics: One mechanism by which leadership affects organiza-
tional performance. Journal of Applied Psychology, 88: 795–808.
7. Miller, D., & Toulouse, J-M. 1986. Chief executive personality
and corporate strategy and structure in small fi rms. Organiza-
tional Science, 32: 1389–1410.
8. Eysenck, H.J., Arnold, W.J., & Meili, R. 1975. Encyclopedia of
psychology (Vol. 2). London: Fontana/Collins; Fontana, D. 2000.
Personality in the workplace. London: Macmillan Press; Howard,
P.J., & Howard, J.M. 2001. The owner’s manual for personality at
work. Austin, TX: Bard Press.
9. Byrne, J.A. 1998. How Al Dunlap self-destructed. BusinessWeek,
July 6, 58–64.
10. Ibid.
11. See, for example, Bouchard, T.J., Lykken, D.T., McGue, M.,
Segal, N.L., & Tellegen, A. 1990. Sources of human psycho-
logical differences: The Minnesota study of twins reared apart.
Science, 250: 223–228; Shields, J. 1962. Monozygotic twins.
London: Oxford University Press.
12. Ibid.
13. Chess, S., & Thomas, A. 1987. Know your child: An authoritative
guide for today’s parents. New York: Basic Books.
14. Hamer, D., & Copeland, P. 1998. Living with your genes. New
York: Doubleday; Ridely, M. 1999. Genome: The autobiography
of a species in 23 chapters. New York: HarperCollins.
15. Ridely, M. 1999. Genome: The autobiography of a species in
23 chapters. New York: HarperCollins.
c05.indd 203c05.indd 203 12/08/10 10:46 AM12/08/10 10:46 AM
204 Chapter 5 Personality, Intelligence, Attitudes, and Emotions
16. Friedman, H.S., & Schustack, M.W. 1999. Personality: Classic
theories and modern research. Boston: Allyn and Bacon.
17. McCandless, B. 1969. Children: Behavior and development.
London: Holt, Rinehart, & Winston.
18. Costa, P.T., & McCrae, R.B. 1993. Set like plaster: Evidence for
the stability of adult personality. In T. Heatherton and J. Weim-
berger (Eds.), Can personality change? Washington, DC: American
Psychology Association.
19. Erikson, E. 1987. A way of looking at things: Selected papers from
1930 to 1980. New York: W.W. Norton.
20. Costa, P.T., & McCrae, R.R. 1992. NEO PI-R: Professional man-
ual. Odessa, FL: Psychological Assessment Resources.
21. Reuters. January 13, 2009. Yahoo names software exec
Bartz as new CEO. At http://www.reuters.com/article/
idUSN1340746920090113.
22. Barrick, M.R., & Mount, M.K. 1991. The Big Five personality
dimensions and performance: A meta-analysis. Personnel Psychol-
ogy, 44: 1–26; Barrick, M.R., Mount, M.K., & Judge, T.A. 2001.
Personality and performance at the beginning of the new mil-
lennium: What do we know and where do we go next? Interna-
tional Journal of Selection and Assessment, 9: 9–30; Hurtz, G.M., &
Donovan, J.J. 2000. Personality and job performance: The Big
Five revisited. Journal of Applied Psychology, 85: 869–879; Mount,
M.K., Barrick, M.R., & Strauss, G.L. 1998. Five-factor model
of personality and performance in jobs involving interpersonal
interactions. Human Performance, 11: 145–165.
23. de Jong, R.D., Bouhuys, S.A., & Barnhoorn, J.C. 1999.
Personality, self-effi cacy, and functioning in management teams:
A contribution to validation. International Journal of Selection and
Assessment, 7: 46–49.
24. Judge, T.A., Heller, D., & Mount, M.K. 2002. Five-factor model
of personality and job satisfaction: A meta-analysis. Journal of Ap-
plied Psychology, 87: 530–541.
25. Costa, P.T., & McCrae, R.R. 1992. NEO P-R: Professional man-
ual. Odessa, FL: Psychological Assessment Resources.
26. Barrick, M.R., & Mount, M.K. 1991. The Big Five personality
dimensions and performance: A meta-analysis. Personnel Psychol-
ogy, 44: 1–26; Barrick, M.R., Mount, M.K., & Judge, T.A. 2001.
Personality and performance at the beginning of the new millen-
nium: What do we know and where do we go next? International
Journal of Selection and Assessment, 9: 9–30.
27. Judge, T.A., Higgins, C.A., Thoresen, C., & Barrick, M.R.
1999. The Big Five personality traits, general mental ability,
and career success across the life span. Personnel Psychology, 52:
621–652.
28. Bain & Company, 2007. Springboard: People. www.bain.com/
bainweb/Join_Bain/people_places.asp; Goldman Sachs Group,
Inc. 2007. Our people. www2.goldmansachs.com/careers/inside_
goldman_sachs/our_people/index.html; Microsoft. 2007. Meet
Our People. http://members.microsoft.com/careers/mslife/
meetpeople/default.aspx.
29. Witt, L.A., Burke, L.A., Barrick, M. R., & Mount, M.K. 2002.
The interactive effects of conscientiousness and agreeableness on
job performance. Journal of Applied Psychology, 87: 164–169.
30. Costa, P.T., & McCrae, R.R. 1992. NEO P-R: Professional
manual. Odessa, FL: Psychological Assessment Resources.
31. Barrick, M.R., Mount, M.K., & Judge, T.A. 2001. Personality
and performance at the beginning of the new millennium: What
do we know and where do we go next? International Journal of
Selection and Assessment, 9: 9–30.
32. Kichuk, S.L., & Weisner, W.H. 1997. The Big Five person-
ality factors and team performance: Implications for selecting
successful product design teams, Journal of Engineering and
Technology Management, 14: 195–221; Neuman, G.A., Wagner,
S.H., & Christiansen, N.D. 1999. The relationship between
work-team personality composition and the job performance
of teams. Group and Organization Management, 24: 28–45;
Neuman, G.A., & Wright, J. 1999. Team effectiveness: beyond
skills and cognitive ability. Journal of Applied Psychology, 84:
376–389.
33. Costa, P.T., & McCrae, R.R. 1992. NEO P-R: Professional man-
ual. Odessa, FL: Psychological Assessment Resources.
34. Barrick, M.R., & Mount, M.K. 1991. The Big Five personal-
itydimensions and performance: A meta-analysis. Personnel
Psychology, 44: 1–26.
35. Barrick, M.R., Mount, M.K., & Judge, T.A. 2001. Personality
and performance at the beginning of the new millennium: What
do we know and where do we go next? International Journal of
Selection and Assessment, 9: 9–30.
36. Kichuk, S.L., & Weisner, W.H. 1997. The Big Five personal-
ity factors and team performance: Implications for selecting
successful product design teams. Journal of Engineering and
Technology Management, 14: 195–221; Thomas, P., Moore,
K.S., & Scott, K.S. 1996. The relationship between self-effi cacy
for participating in self-managed work groups and the Big Five
personality dimensions. Journal of Organizational Behavior, 17:
349–363.
37. Hirschfeld, R.R.,Jordan, M.H., Thomas, C.H., & Field, H.S.
2008. Observed leadership potential of personnel in a team
setting: Big Five traits and proximal factors as predictors. Interna-
tional Journal of Selection and Assessment, 16: 385-402.
38. Judge, T.A., Heller, D., & Mount, M.K. 2002. Five-factor model
of personality and job satisfaction: A meta-analysis. Journal of
Applied Psychology, 87: 530–541.
39. Costa, P.T., & McCrae, R.R. 1992. NEO P-R: Professional
manual. Odessa, FL: Psychological Assessment Resources.
40. Barrick, M.R., Mount, M.K., & Judge, T.A. 2001. Personality
and performance at the beginning of the new millennium: What
do we know and where do we go next? International Journal of
Selection and Assessment, 9: 9–30.
41. W.L. Gore & Associates. 2007. Careers: North America. www.
gore.com/careers/north_america_careers.html.
42. Hough, L.M., Oswald, F.L., & Ployhart, R.E. 2001. Deter-
minants, detection, and amelioration of adverse impact in per-
sonnel selection procedures: Issues, evidence and lessons learned.
International Journal of Selection and Assessment, 9: 152–194;
Schmidt, F.L., & Hunter, J.E. 1998. The validity and utility of se-
lection methods in personnel psychology: Practical and theoretical
implications of 85 years of research fi ndings. Psychological Bulletin,
124: 262–274; Tett, R.P., Jackson, D.N., & Rothstein, M. 1991.
Personalitymeasures as predictors of job performance. Personnel
Psychology, 44: 703–742.
c05.indd 204c05.indd 204 12/08/10 10:46 AM12/08/10 10:46 AM
http://www.reuters.com/article/idUSN1340746920090113
http://www.reuters.com/article/idUSN1340746920090113
www.bain.com/bainweb/Join_Bain/people_places.asp
www.bain.com/bainweb/Join_Bain/people_places.asp
www2.goldmansachs.com/careers/inside_goldman_sachs/our_people/index.html
www2.goldmansachs.com/careers/inside_goldman_sachs/our_people/index.html
http://members.microsoft.com/careers/mslife/meetpeople/default.aspx
http://members.microsoft.com/careers/mslife/meetpeople/default.aspx
www.gore.com/careers/north_america_careers.html
www.gore.com/careers/north_america_careers.html
Endnotes 205
43. Wilk, S.L. & Moynihan, L.M. 2005. Display rule regulators:
The relationship between supervisors and worker emotional
exhaustion. Journal of Applied Psychology, 90: 917–927.
44. Howard, P.J., & Howard, J.M. 2001. The owner’s manual for
personality at work. Austin, TX: Bard Press.
45. Ibid.
46. Spector, P.E. 1982. Behavior in organizations as a function of
employee’s locus of control. Psychological Bulletin, 91: 482–497.
47. Kabanoff, B., & O’Brien, G.E. 1980. Work and leisure: A task-
attributes analysis. Journal of Applied Psychology, 65: 596–609.
48. Spector, P.E. 1982. Behavior in organizations as a function of
employee’s locus of control. Psychological Bulletin, 91: 482–497.
49. Spector, P.E., Cooper, C.L., Sanchez, J.I., O’Driscoll, M., Sparks,
K., Bernin, P., Bussing, A., Dewe, P., Hart, P., Lu, L., Miller, K.,
De Moraes, L.R., Ostrognay, G.M., Pagon, M., Pitariu, H.D.,
Poelmans, S.A.Y., Radhakrishnan, P., Russinova, V., Salamatov, V.,
Salgado, J.F., Shima, S., Siu, O., Stora, J.B., Teichmann, M., The-
orell, T., Vlerick, P., Westman, M., Widerszal-Bazyl, M., Wong,
P.T., & Yu, S. 2002. Locus of control and well-being at work:
How generalizable are western fi ndings? Academy of Management
Journal, 45: 453–466.
50. Ng, T.W.H., Sorensen, K.L., & Eby, L.T. 2006. Locus of control
at work: A meta-analysis. Journal of Organizational Behavior, 27:
1057–1087.
51. Blass, T. 1977. Personality variables in behavior. Hillsdale, NJ:
Lawrence Erlbaum Associates.
52. Altmeyer, B. 1998. The other “authoritarian personality.” In M.P.
Zanna (Ed.), Advances in experimental social psychology (Vol. 30).
San Diego: Academic Press, pp. 47–92.
53. Son Hing, L.S., Bobocel, D.R., Zanna, M.P., and McBride,
M.V. 2007. Authoritarian dynamics and unethical decision
making: High social dominance orientation leaders and high
right-wing authoritarian followers. Journal of Personality and
Social Psychology, 92: 67–81.
54.Sidanius, J., & Pratto, F. 1999. Social dominance: An intergroup
theory of social hierarchy and oppression. New York: Cambridge
University Press.
55. Pratto, F., Sidanius, J., Stallworth, L.M., & Malle, B.F. 1994.
Social dominance orientation: A personality variable predicting
social and political attitudes. Journal of Personality and Social
Psychology, 67: 741–763.
56. Sibley, C.G., & Duckitt, J. 2008. Personality and prejudice:
A meta-analysis and theoretical review. Personality and Social
Psychology Review, 12: 248–279.
57. Umphress, E.E., Simmons, A.L., Boswell, W.R., & Triana, M.d.C.
2008. Managing discrimination in selection: The infl uence of
directives from an authority and social dominanceorientation.
Journal of Applied Psychology, 93: 982–993; Petersen, L.E., &Dietz,
J. 2000. Social discrimination in a personnel selection context:
The effects of an authority’s instruction to discriminate and fol-
lowers’authoritarianism. Journal of Applied Social Psychology, 30:
206–220.
58. Umphress, E.E., Smith-Crowe, K., Brief, A.P., Dietz, J., &
Watkins, M.B. 2007. When birds of a feather fl ock together
and when they do not: Status composition, social dominance
orientation and organizational attractiveness. Journal of Applied
Psychology, 92: 396–409; McKay, P.F., & Avery, D.R. 2006.
What has race got to do with it? Unraveling the role of racioeth-
nicity in jobseekers’ reactions to site visits. Personnel Psychology,
59: 395–429.
59. Mehra, A., Kilduff, M., & Brass, D.J. 2001. The social networks
of high and low self-monitors: Implications for workplace per-
formance. Administrative Science Quarterly, 46: 121–146.
60. Snyder, M. 1979. Self-monitoring processes. Advances in Experi-
mental Social Psychology, 12: 85–128.
61. Mehra, A., Kilduff, M., & Brass, D.J. 2001. The social networks
of high and low self-monitors: Implications for workplace perfor-
mance. Administrative Science Quarterly, 46: 121–146.
62. Snyder, M. 1979. Self-monitoring processes. Advances in Experi-
mental Social Psychology, 12: 85–128.
63. Day, D.V., Schleicher, D.J., Unckless, A.L., & Hiller, N.J. 2002.
Self-monitoring personality at work: A meta-analytic investigation
of construct validity. Journal of Applied Psychology, 87: 390–401.
64. Kilduff, M., & Day, D.V. 1994. Do chameleons get ahead? The
effects of self monitoring on managerial careers. Academy of
Management Journal, 37: 1047–1060.
65. Blass, T. 1977. Personality variables in behavior. Hillsdale, NJ:
Lawrence Erlbaum Associates.
66. Steel, P. 2007. The nature of procrastination: A meta-analytic and
theoretical review of quintessential self-regulatory failure. Psycho-
logical Bulletin, 133: 65–94.
67. Blass, T. 1977. Personality variables in behavior. Hillsdale, NJ:
Lawrence Erlbaum Associates.
68. See, for example, Salgado, J.F. 1997. The fi ve factor model of
personality and job performance in the European Community.
Journal of Applied Psychology, 82: 30–43.
69. Locke, E.A. 2005. Why emotional intelligence is an invalid
concept. Journal of Organizational Behavior, 26: 425–431.
70. Dunnette, M.D. 1976. Aptitudes, abilities, and skills. In M.D.
Dunnette (Ed.), Handbook of industrial and organizational
psychology. Chicago: Rand McNally.
71. Hunter, J.E., & Hunter, R.F. 1984. Validity and utility of alter-
native predictors of job performance. Psychological Bulletin, 96:
72–98; Hunter, J.E., & Schmidt, F.L. 1996. Intelligence and
job performance: Economic and social implications. Psychology,
Public Policy, and Law, 2: 447–472; Salgado, J.F., & Anderson,
N. 2002. Cognitive and GMA testing in the European Com-
munity: Issues and evidence. Human Performance, 15: 75–96;
Schmidt, F.L. 2002. The role of general cognitive ability and job
performance: Why there cannot be a debate. Human Performance,
15: 187–210; Schmidt, F.L., & Hunter, J.E. 1998. The validity
and utility of selection methods in personnel psychology: Practi-
cal and theoretical implications of 85 years of research fi ndings.
Psychological Bulletin, 124: 262–274.
72. Simon, D.G., Hitt, M.A., & Ireland, R.D. 2007. Managing fi rm
resources in dynamic environments to create value: Looking in-
side the black box. Academy of Management Review, 32: 273–292.
73. Katz, D., & Stotland, E. 1959. Preliminary statement to a theory
of attitude structure and change. In S. Kock (Ed.), Psychology:
A study of science (3rd ed.). New York: McGraw-Hill.
74. Petty, R.E., & Cacioppo, J.T. 1981. Attitudes and persuasion:Classic
and contemporary approaches. Dubuque, IA: Wm. C. Brown.
c05.indd 205c05.indd 205 12/08/10 10:46 AM12/08/10 10:46 AM
206 Chapter 5 Personality, Intelligence, Attitudes, and Emotions
75. Bem, D.J. 1972. Self-perception theory. In L. Berkowitz (Ed.),
Advances in experimental social psychology (Vol. 6). New York:
Academic Press.
76. Freedman, J.L., & Fraser, S.C. 1966. Compliance without pres-
sure: The foot-in-the-door technique. Journal of Personality and
Social Psychology, 4: 195–202.
77. Heider, F. 1958. The psychology of interpersonal relations. New
York: John Wiley & Sons; Osgood, C.E., & Tannenbaum, P.H.
1955. The principle of congruity in the prediction of attitude
change. Psychological Review, 62: 42–55.
78. Holtom, B.C., Mitchell, T.R., & Lee, T.W. 2006. Increasing
human and social capital by applying embeddedness theory.
Organizational Dynamics, 35: 316–331.
79. Mitchell, T.R., Holtom, B.C., Lee, T.W., Sablynski, C.J., &
Erez, M. 2001. Why people stay: Using job embeddedness to
predictvoluntary turnover. Academy of Management Journal, 44:
1102–1121; Tett, R.P., & Meyer, J.P. 1993. Job satisfaction, orga-
nizationalcommitment, turnover intention, and turnover: Path
analyses based on meta-analytic fi ndings. Personnel Psychology, 46:
259–293.
80. Scott, K.D., & Taylor, G.S. 1985. An examination of confl ict-
ing fi ndings on the relationship between job satisfaction and
absenteeism: A meta-analysis. Academy of Management Journal,
28: 599–612.
81. Kinicki, A.J., McKee-Ryan, F.M., Schriesheim, C.A., & Carson,
K.P. 2002. Assessing the construct validity of the Job Descriptive
Index: A review and meta-analysis. Journal of Applied Psychology, 87:
14–32.
82. Judge, T.A., Thoresen, C.J., Bono, J.E., & Patton, G.K. 2001.
The job satisfaction-job performance relationship: A qualitative
and quantitative review. Psychological Bulletin, 127: 376–407.
83. Gellatly, I.R., Meyer, J.P., & Luchak, A.A. 2006. Combined effects
of the three commitment components on focal and discretionary
behaviors: A test of Meyer and Herscovitch’s propositions. Journal
of Vocational Behavior, 69: 331–345; Meyer, J.P., Stanley, D.J.,
Herscovitch, L., & Topolnytsky, L. 2002. Affective, continuance,
and normative commitment to the organization: Ameta-analysis
of antecedents, correlates and consequences.Journal of Vocational
Behavior, 61: 20–52.
84. Wright, T.A., & Bonett, D.G. 2002. The moderating effect of
employee tenure on the relation between organizational commit-
ment and job performance: A meta-analysis. Journal of Applied
Psychology, 87: 1183–1190.
85. Riketta, M. 2002. Attitudinal organizational commitment and job
performance. Journal of Organizational Behavior, 23: 257–266.
86. Gellatly, I.R., Meyer, J.P., & Luchak, A.A. 2006. Combined
effects of the three commitment components on focal and discre-
tionary behaviors: A test of Meyer and Herscovitch’s propositions.
Journal of Vocational Behavior, 69: 331–345.
87. Meyer, J.P., Stanley, D.J., Herscovitch, L., & Topolnytsky, L.
2002. Affective, continuance, and normative commitment to the
organization: A meta-analysis of antecedents, correlates and conse-
quences. Journal of Vocational Behavior, 61: 20–52; Kalbers, L.P.,
& Cenker, W.J. 2007. Organizational commitment and auditors
in public accounting. Managerial Auditing Journal, 22: 354–375.
88. Vandenberghe, C., Bentein, K., & Stinglhamber, F. 2004. Affec-
tive commitment to the organization, supervisor, and work group:
Antecedents and outcomes. Journal of Vocational Behavior, 64:
47–71.
89. Ford, M.T., Heinen, B.A., & Langkamer, K.L. 2007. Work and
family satisfaction and confl ict: A meta-analysis of cross-domain
relations. Journal of Applied Psychology, 92: 57–106.
90. Meyer, J.P., Stanley, D.J., Herscovitch, L., & Topolnytsky, L.
2002. Affective, continuance, and normative commitment to the
organization: A meta-analysis of antecedents, correlates and con-
sequences. Journal of Vocational Behavior, 61: 20–52.
91. Schulte, M., Ostroff, C., & Kinicki, A.J. 2006. Organizational
climate and psychological climate perceptions: A cross-level study
of climate-satisfaction relationships. Journal of Occupational and
Organizational Psychology, 79: 645–671.
92. Podsakoff, N.P., LePine, J.A., & LePine, M.A. 2007. Differen-
tial challenge stressor-hindrance relationships with job attitudes,
turnover intentions, and withdrawal behavior: A meta-analysis.
Journal of Applied Psychology, 92: 438–454.
93. Colquitt, J.A., Conlon, D.E., Wesson, M.J., Porter, C.O.L.H., &
Ng, K.Y. 2001. Justice at the millennium: A meta-analytic review
of 25 years of organizational justice research. Journal of Applied
Psychology, 86: 425–445.
94. Locke, E. A. 1976. The nature and causes of job satisfaction. In
M. D. Dunnette (Ed.), Handbook of industrial and organizational
psychology. Chicago: Rand McNally, pp. 1297–1343.
95. Meyer, J.P., & Allen, N.J. 1997. Commitment in the workplace:
Theory, research, and application. Thousand Oaks, CA: Sage.
96. Meyer, J.P., Stanley, D.J., Herscovitch, L., & Topolnytsky, L.
2002. Affective, continuance, and normative commitment to the
organization: A meta-analysis of antecedents, correlates and con-
sequences. Journal of Vocational Behavior, 61: 20–52.
97. Ilies, R., Arvey, R.D., & Bouchard, T.J. 2006. Darwinism, behav-
ioral genetics, and organizational behavior: A review and agenda for
future research. Journal of Organizational Behavior, 27: 121–141.
98. Deaux, K., Dane, F.C., Wrightsman, L.S., & Sigelman, C.K.
1993. Social psychology in the 90s. Pacifi c Grove, CA: Brooks/
Cole.
99. Aronson, E., Turner, J., & Carlsmith, J. 1963. Communicator
credibility and communication discrepancy. Journal of Abnormal
and Social Psychology, 67: 31–36; Hovland, C., Janis, I., &Kelley,
H.H. 1953. Communication and persuasion. New Haven, CT:
Yale University Press.
100. Eagly, A.H., Chaiken, S., & Wood, W. 1981. An attributional
analysis of persuasion. In J. Harvey, W.J. Ickes, & R.F. Kidd (Eds.),
New directions in attribution research (Vol. 3). Hillsdale, NJ: Law-
rence Erlbaum Associates; Walster, E., Aronson, E., & Abrahams,
D. 1966. On increasing the persuasiveness of a low prestige com-
municator. Journal of Experimental Social Psychology, 2: 325–342.
101. Berscheid, E. 1966. Opinion change and communicator–
communicatee similarity and dissimilarity. Journal of Personality
and Social Psychology, 4: 670–680.
102. McGinniss, J. 1969. The selling of the president, 1968. New York:
Trident Press.
103. Leventhal, H. 1970. Findings and theory in the study of fear
communications. In L. Berkowitz (Ed.), Advances in experimental
social psychology (Vol. 5). New York: Academic Press.
104. Rogers, R.W. 1983. Cognitive and physiological processes in
fearappeals and attitude change: A revised theory of protection
c05.indd 206c05.indd 206 12/08/10 10:46 AM12/08/10 10:46 AM
Endnotes 207
motivation. In J. Cacioppo, & R. Petty (Eds.), Social psychophysiol-
ogy. New York: Guilford Press; Maddux, J.E., & Rogers, R.W. 1983.
Protection motivation and self-effi cacy: A revised theory of fear ap-
peals and attitude change. Journal of Experimental SocialPsychology,
19: 469–479.
105. Festinger, L.A. 1957. A theory of cognitive dissonance. Stanford,
CA: Stanford University Press.
106. Deaux, K., Dane, F.C., Wrightsman, L.S., & Sigelman, C.K.
1993. Social psychology in the 90s. Pacifi c Grove, CA: Brooks/Cole.
107. Johnson, P.R., & Indvik, J. 1999. Organizational benefi ts of
having emotionally intelligent managers and employees. Journal
of Workplace Learning, 11: 84–90.
108. Fisher, C.D., & Ashkanasy, N.M. 2000. The emerging role of
emotions in work life: An introduction. Journal of Organizational
Behavior, 21: 123–129.
109. Hymowitz, C. 2006. Business is personal, so managers need to har-
ness emotions. Wall Street Journal (Eastern Edition), November 13,
p. B.1.
110. Lazarus, R.S., & Lazarus, A.D. 1994. Passion and reason: Making
sense of emotions. New York: Oxford University Press.
111. Hershcovis, M.S., Turner, N., Barling, J., Arnols, K.A.,Dupre,
K.E., Inness, M., LeBlanc, M.M., & Sivanathan, N. 2007.
Predicting workplace aggression: A meta-analysis. Journal of Applied
Psychology, 92: 228–238.
112. George, J.M. & Brief, A.P. 1992. Feeling good—doing good: A
conceptual analysis of mood at work—organizational sponta-
neity. Psychological Bulletin, 112: 310–329.
113. Isen, A.M., Daubman, K.A., & Nowicki, G.P. 1987. Positive
affect facilitates creative problem solving. Journal of Personality
and Social Psychology, 52: 1122–1131.
114. George, J.M., & Zhou, J. 2002. Understanding when bad moods
foster creativity and good ones don’t: The role of context and
clarity of feelings. Journal of Applied Psychology, 87: 687–697.
115. Ting Fong, C. 2006. The effects of emotional ambivalence on
creativity. Academy of Management Journal, 49: 1016–1030.
116. Barsade, S. 2002. The ripple effect: Emotional contagion and
its infl uence on group behavior. Administrative Science Quar-
terly, 47: 644–675; Hatfi eld, E., Cacioppo, J.T., & Rapson, R.L.
1994. Emotional contagion. Cambridge, England: Cambridge
University Press.
117. Bono, J.E., & Ilies, R. 2006. Charisma, positive emotions and
mood contagion. The Leadership Quarterly, 17(4): 317–334.
118. Hochschild, A.R. 1983. The managed heart: Commercialization
of human feeling. Berkeley, CA: University of California Press;
Ashforth, B.E., & Humphrey, R.H. 1993. Emotional labor in
service roles: The infl uence of identity. Academy of Management
Review, 18: 88–115.
119. Cropanzano, R., Weiss, H. M., & Elias, S. M. 2004. The im-
pact of display rules and emotional labor on psychological well-
being at work. In P.L. Perrewé, & D.C. Ganster (Eds.), Research
in occupational stress and well-being (Vol. 3). Amsterdam: Elsevier,
pp. 45–89; Schaubroeck, J., & Jones, J.R. 2000. Antecedents of
workplace emotional labor dimensions and moderators of their
effects on physical symptoms. Journal of Organizational Behavior,
21: 163–183.
120. Zapf, D., & Holz, M. 2006. On the positive effect and nega-
tive effects of emotion work in organizations. European Journal of
Work and Organizational Psychology, 15: 1–26.
121. Wilk, S.L., & Moynihan, L.M. 2005. Display rule “regulators”:
The relationship between supervisors and worker emotional
exhaustion. Journal of Applied Psychology, 90: 915–927.
122. Wilk & Moynihan Display rule “regulators”; Ashforth, B.E.,
& Humphrey, R.H. 1993. Emotional labor in service roles:
The infl uence of identity. Academy of Management Review, 18:
88–115.
123. Bozionelos, N. 2006. Mentoring and expressive network resources:
Their relationship with career success and emotional exhaustion
among Hellenes employees involved in emotion work. Journal of
Human Resource Management, 17: 362–378.
124. Salovey, P., & Mayer, J. 1990. Emotional intelligence. Imagina-
tion, Cognition, and Personality, 9: 185–211.
125. Kerr, R., Garvin, J., Heaton, N., & Boyle, E. 2006. Emotional
intelligence and leadership effectiveness. Leadership and Orga-
nizational Development Journal, 27: 265–279; Cote, S., & Min-
ers, C.T.H. 2006. Emotional intelligence, cognitive intelligence,
and job performance. Administrative Science Quarterly, 51: 1–28;
Semadar, A., Robins, G., & Ferris, G.R. 2006. Comparing the
validity of multiple social effectiveness constructs in the predic-
tion of managerial job performance. Journal of Organizational
Behavior, 27: 443–461. Rozell, E.J., Pettijohn, C.E., & Parker,
R.S. 2006. Journal of Marketing Theory and Practice, 14: 113–125;
Rooy, D.L., & Viswasvaran, C. 2004. Emotional intelligence: A
meta-analytic investigation of predictive validity and nomono-
logical net. Journal of Vocational Behavior, 65: 71–95.
126. Goleman, D. 1995. Emotional intelligence. New York: Bantam.
127. Locke, E.A. 2005. Why emotional intelligence is an invalid con-
cept. Journal of Organizational Behavior, 26: 425–443.
128. Goleman, D. 2004. What makes a leader? Harvard Busi-
nessReview, Jan. 2004: 82–91; Goleman, D. 1995, Emotional
intelligence, New York: Bantam; Fineman, S. 2005. Appreciating
emotion at work: Paradigm tensions. International Journal of Work
Organisation and Emotion, 1: 4–19.
129. Locke, E.A. 2005. Why emotional intelligence is an invalid
concept. Journal of Organizational Behavior, 26: 425–431; Mur-
phy, K.R. (Ed.) 2006. A critique of emotional intelligence: What are
the problems and how can they be fi xed? Mahwah, NJ: Lawrence
Erlbaum Associates; Fineman, S. 2005. Appreciating emotion at
work: Paradigm tensions. International Journal of Work Organisa-
tion and Emotion, 1: 4–19.
c05.indd 207c05.indd 207 12/08/10 10:46 AM12/08/10 10:46 AM
6
?knowledge objectives
After reading this chapter, you should be able to:
1. Defi ne work motivation and explain why it is im-
portant to organizational success.
2. Discuss how managers can use Maslow’s need hi-
erarchy and ERG theory to motivate associates.
3. Describe how need for achievement, need for af-
fi liation, and need for power relate to work moti-
vation and performance.
4. Explain how Herzberg’s two-factor theory of
motivation has infl uenced current management
practice.
5. Discuss the application of expectancy theory to
motivation.
6. Understand equity theory and procedural justice,
and discuss how fairness judgments infl uence work
motivation.
7. Explain how goal-setting theory can be used to
motivate associates.
8. Describe how jobs can be enriched and how job
enrichment can enhance motivation.
9. Based on all major theories of work motivation,
describe specifi c actions that can be taken to in-
crease and sustain employee motivation.
work
motivation
exploring behavior in action
Work Motivation at W.L. Gore & Associates
O
n January 1, 1958, Wilbert and Genevieve
Gore founded a small company to develop ap-
plications of polytetrafl uoroethylene (PTFE).
Wilbert, a chemist and research scientist, tended to the
technical work while Genevieve handled accounting
and other business matters.
Wilbert Gore initially focused on applications in
the emerging computer industry, where PTFE’s insu-
lation characteristics were potentially useful in cables
and circuit boards. After solving a number of techni-
cal issues, he and his company succeeded with cable
and wire products. Some of these products eventually
landed on the moon as part of the technology used
in the Apollo space program. More recently, they
have been incorporated into the U.S. space shuttle
program. Moving beyond cables and wires, Gore has
created a number of leading products for a number
of industries. Best known among consumers for wa-
terproof Gore-Tex fabrics, the company also places
products in industries such as aerospace, automotive,
chemical processing, computing, telecommunica-
tions, environmental protection, medical/health care,
pharmaceutical, biotechnology, and textiles. Gore-Tex
fabrics were used in the uniforms of the 2010 U.S.
Olympic snowboarding team.
Having previously experienced bureaucratic road-
blocks in highly structured organizations, Wilbert
Gore designed a different kind of company to support
the work with PTFE. Using the term lattice structure
c06.indd 208c06.indd 208 12/08/10 10:48 AM12/08/10 10:48 AM
209
to signify an emphasis on informal communication and
fl uid work networks, he set up a company that focused on
equality among people as well as freedom for those people
to pursue their own ideas and projects. To a signifi cant de-
gree, individuals were and still are expected to defi ne their
own jobs within areas that interest them. Assigned spon-
sors help both new and ex-
isting Gore personnel with
job defi nition.
Formal leadership as-
signments are less common
at Gore than in more struc-
tured companies. Instead
of formal assignments,
Gore looks for individuals
who have attracted “fol-
lowers” for their ideas and
projects. Thomas Malone,
a professor at Massachu-
setts Institute of Technol-
ogy, has studied the com-
pany and summarizes the approach as follows: “The way
you become a [leader] is by fi nding people who want to
work for you. … In a certain sense, you’re elected rather
than appointed. It’s a democratic structure inside a busi-
ness organization.”
Culturally, four principles govern the behavior of in-
dividuals within W.L. Gore & Associates:
• The ability to make one’s own commitments and
keep them
• Freedom to encourage, help, and allow other
associates to grow in knowledge, skill, and scope
of responsibility
• Consultation with others before undertaking
actions that could impact the reputation of the
company
• Fairness to each other and everyone with whom
contact is made
These structural and cultural features of the com-
pany set the stage for personal fulfi llment and growth.
The offi cial Gore website puts it this way: “Everyone can
quickly earn the credibility to defi ne and drive projects.
Sponsors help associates chart a course in the organiza-
tion that will offer personal fulfi llment while maximizing
their contribution to the enterprise.” Current CEO Terri
Kelly said this: “We work hard at maximizing individual
potential … and cultivating an environment where crea-
tivity can fl ourish.” He later stated that “Thanks largely
to the pioneering corporate culture established by our
founders … Gore is a place where innovation thrives and
where every individual has the ability to contribute to
the success of the enterprise … our culture is our biggest
competitive advantage.”
Of course, Gore is not
for everyone. Individuals
who work at the company
must tolerate a certain
amount of ambiguity and
must thrive in autono-
mous settings. Moreover,
they must value personal
growth in the workplace.
While many or even most
individuals desire personal
growth, some do not.
Through rigorous selection
procedures, Gore tends to
fi nd the right people. The result is a highly motivated and
effective workforce.
The emphasis on fairness also affects motivation and
effectiveness. In many companies, pay systems promote
dysfunctional internal competition and jealousy. At W.L.
Gore & Associates, the pay system tends to promote a sense
of equity and justice. A key aspect of the system is the spon-
sor. Each individual at Gore has a sponsor, either a peer
or a leader, who is responsible for ensuring fair pay. The
sponsor collects information on contributions and achieve-
ments from an individual’s peers and leaders and then
shares this information with a compensation committee.
Overall, Gore’s approach can be summarized as follows:
“Unlike companies which base an employee’s pay on the
evaluations of one or two people—or supervisors’ opinions
alone—Gore involves many [people] in the process. Our
goal: internal fairness and external competitiveness.”
Recognition and success have resulted from Gore’s
practices. For example, W.L. Gore & Associates has been
listed for 12 consecutive years on the Fortune list of the
“Best 100 Companies to Work For.” It has also been listed
as a top company for which to work in German, Italian,
and British rankings, and indeed in rankings for the entire
European Union. It has received awards for many techno-
logical breakthroughs. Financially, the privately held com-
pany has enjoyed consistently strong performance.
©Tyler Stableford/Stone/Getty Images
c06.indd 209c06.indd 209 12/08/10 10:48 AM12/08/10 10:48 AM
210 Chapter 6 Work Motivation
Going forward, the company seems poised for con-
tinued success. Today Gore has approximately 9,000 as-
sociates located in 30 countries worldwide, with manufac-
turing facilities in the United States, Germany, Scotland,
Japan, and China and sales offi ces around the world. Their
annual revenues are $2.5 billion. As it continues to grow,
the company seems intent on maintaining its current
structure and culture.
Formulating strategies that can deliver
competitive advantage is not easy.
Senior managers working with other
individuals engage in countless con-
versations, meetings, experiments, and
analyses in order to create or modify
company strategies. Implementing strat-
egies and engaging in the day-to-day
behaviors that help to create competi-
tive advantage also are not easy tasks.
Hard work is involved. Managers and
associates must be willing to deliver
strong efforts if a fi rm is to succeed.1
With strong efforts being so im-
portant, work motivation is a crucial
topic in any discussion of organiza-
tional behavior. People must be moti-
vated if they are to effectively engage in
the behaviors and practices that bring
advantage and success to a fi rm.
It is important to note that differ-
ent strategies require different types of
people and behavior, and therefore dif-
ferent approaches to motivation. W.L.
Gore has adopted a general strategy
of differentiation based on innovation
and creativity. Differentiating in this
way requires people who can think
differently, experiment in smart ways,
accept responsibility, and appreciate
the learning that accompanies failed ef-
forts. The strategy also requires people
who want to be challenged and grow
in the workplace. To fully motivate such
people, resources for trying new ideas
must be made available, including time.
Opportunities to develop new skills and
polish old ones are important. Recogni-
tion for successes and pats on the back
for strong efforts that unexpectedly did
not bear fruit also might be useful. Pay,
while important, often takes a backseat.
There are many ways to motivate
people. Hence, there is no simple an-
swer to the question of what managers
should do to increase and sustain their
associates’ motivation. A great deal is
known, however, about how people
are motivated. In this chapter, we de-
scribe the major theories of work moti-
vation and the practices that are most
likely to increase and sustain strong
efforts. We begin by formally defi ning
what is meant by motivation. Next, we
describe fundamental theories of work
motivation, including both content and
process theories. To synthesize these
theories, we close the main body of the
chapter by distilling useful management
practices.
the strategic importance of Work Motivation
Sources: D. Anfuso. 1999. “Core Values Shape W.L. Gore’s Innovative Culture,” Workforce, 78 no. 3: 48–53; A. Deutschman. 2004.
“The Fabric of Creativity,” Fast Company, no. 89: 54–59; Gore & Associates, “Compensation,” 2007, at http://www.gore.com/en_xx/
careers/benefi ts/compensation.html; Gore & Associates, “Corporate Culture,” 2007, at http://www.gore.com/en_xx/aboutus/culture/
index.html; Gore & Associates, “Fast Facts,” 2010, at http://www.gore.com/en_xx/aboutus/fastfacts/index.html; P. Kriger. 2006.
“Power of the Individual,” Workforce Management, 85, no. 4: 1–7; F. Shipper and C.C. Manz. 1993 “W.L. Gore & Associates, Inc.,”
Pinnacle Management Strategy Case Base; M. Weinreb. 2003. “Power to the People,” Sales and Marketing Management, 155, no. 4:
30–35; W.L. Gore and Associates Press Release (Jan. 22, 2009), “W.L. Gore and Associates Marks 12th Year as One of Nation’s Best,” at
http://www.gore.com/en_xx/news/FORTUNE2009.html; Gore and Associates, “About Us.” at http://www.gore.com/en_xx/aboutus/
index.html.
What Is Motivation?
Man and machine … work in close harmony to achieve more than either could alone. Ma-
chines bring precision and capacity. They make our lives easier, perfect our processes, and in
many ways, enrich our quality of life. But people possess something that machines don’t—
human spirit and inspiration. Our people work continuously at setting goals and tracking
results for ongoing improvement as an overall business. They are an inspiration and their goals
and accomplishments have won Branch-Smith Printing recognition on the highest of levels.2
c06.indd 210c06.indd 210 12/08/10 10:48 AM12/08/10 10:48 AM
http://www.gore.com/en_xx/careers/benefits/compensation.html
http://www.gore.com/en_xx/careers/benefits/compensation.html
http://www.gore.com/en_xx/aboutus/culture/index.html
http://www.gore.com/en_xx/aboutus/culture/index.html
http://www.gore.com/en_xx/aboutus/fastfacts/index.html
http://www.gore.com/en_xx/news/FORTUNE2009.html
http://www.gore.com/en_xx/aboutus/index.html
http://www.gore.com/en_xx/aboutus/index.html
Content Theories of Motivation 211
This quotation from Branch-Smith Printing, a 2002 recipient of the Malcolm Bald-
rige National Quality Award, gets at the heart of motivation: it is the spirit and inspiration
that leads people to apply their human capital to meet the goals of the organization. In
Chapter 1, we discussed the strategic importance of human capital to the success of a fi rm.
However, human capital alone is not enough to ensure behaviors that support organiza-
tional performance. Associates must translate their human capital into actions that result
in performance important to the achievement of organizational goals. Motivation is the
process through which this translation takes place.
Consider the following example. A manager has three assistants reporting to her. They
have similar levels of experience and education. However, they have different levels of abil-
ity for the tasks at hand, and they perform at different levels. It is interesting that the person
with the least ability has outperformed his counterparts. How can a person with less ability
outperform individuals who have greater abilities? The answer may be that he is more moti-
vated to apply his abilities than the others. The two other assistants are approximately equal
to one another in their motivation to perform, judging by the fact that they work equally
hard, and yet one of these assistants outperforms the other. How can this be when they are
equally motivated? The answer may lie in their different ability levels. Thus, we can see that
a person’s level of performance is a function (f ) of both ability and motivation:
Performance �f (Ability � Motivation)
Now consider another scenario. Two salespersons are equally motivated and have the
same ability, yet one of them outperforms the other. How can we explain this, if perform-
ance is a function of ability and motivation? In this case, the better performer has a more
lucrative sales territory than the other salesperson. Thus, environmental factors can also
play a role in performance.
This brings us to our defi nition of work motivation. We know from the preceding
discussion that ability and certain environmental factors exert infl uences on performance
that are separate from the effects of motivation. Motivation, then, refers to forces coming
from within a person that account for the willful direction, intensity, and persistence of
the person’s efforts toward achieving specifi c goals, where achievement is not due solely to
ability or to environmental factors.3 Several prominent theories offer explanations of mo-
tivation. Most of the theories can be separated into two groups: those concerned largely
with content and those concerned largely with process. In the next two sections, we con-
sider theories in each of these two groups.
Content Theories of Motivation
Content theories of motivation generally focus on identifying the specifi c factors that
motivate people. These theories are, for the most part, straightforward. Four impor-
tant content theories of motivation are Maslow’s need hierarchy, Alderfer’s ERG theory,
McClelland’s need theory, and Herzberg’s two-factor theory.
Hierarchy of Needs Theory
One of the most popular motivation theories, frequently referred to as the hierarchy of
needs theory, was proposed in the 1940s by Abraham Maslow.4 According to Maslow, peo-
ple are motivated by their desire to satisfy specifi c needs. Maslow arranged these needs in
motivation
Forces coming from within
a person that account
for the willful direction,
intensity, and persistence of
the person’s efforts toward
achieving specifi c goals,
where achievement is not
due solely to ability or to
environmental factors.
hierarchy of needs
theory
Maslow’s theory that suggests
people are motivated by
their desire to satisfy specifi c
needs, and that needs are
arranged in a hierarchy with
physiological needs at the
bottom and self-actualization
needs at the top. People must
satisfy needs at lower levels
before being motivated by
needs at higher levels.
c06.indd 211c06.indd 211 12/08/10 10:48 AM12/08/10 10:48 AM
212 Chapter 6 Work Motivation
hierarchical order, with physiological needs at the bottom, followed by safety needs, social
and belongingness needs, esteem needs, and, at the top, self-actualization needs. In general,
lower-level needs must be substantially met before higher-level needs become important.
Below, we look at each level and its theoretical implications in organizational settings.
1. Physiological needs. Physiological needs include basic survival needs—for water,
food, air, and shelter. Most people must largely satisfy these needs before they
become concerned with other, higher-order needs. Money is one organizational
award that is potentially related to these needs, to the extent that it provides for
food and shelter.
2. Safety needs. The second level of Maslow’s hierarchy concerns individuals’ needs
to be safe and secure in their environment. These needs include the need for
protection from physical or psychological harm. People at this level might
consider their jobs as security factors and as a way to keep what they have
acquired. These managers and associates might be expected to engage in low-risk
job behaviors, such as following rules, preserving the status quo, and making
career decisions based on security concerns.
3. Social and belongingness needs. Social needs involve interaction with and
acceptance by other people. These needs include the desire for affection,
affi liation, friendship, and love. Theoretically, people who reach this level have
primarily satisfi ed physiological and safety needs and are now concerned with
establishing satisfying relationships with other people. Although a great deal of
satisfaction may come from family relationships, a job usually offers an additional
source of relationships. Managers and associates at this level may thus seek
supportive co-worker and peer-group relationships.
4. Esteem needs. Esteem needs relate to feelings of self-respect and self-worth, along
with respect and esteem from peers. The desire for recognition, achievement,
status, and power fi ts in this category. People at this level may be responsive to
organizational recognition and awards programs and derive pleasure from having
articles about them published in the company newsletter. Money and fi nancial
rewards may also help satisfy esteem needs, because they provide signals of
people’s “worth” to the organization.
5. Self-actualization needs. A person’s need for self-
actualization represents her desire to fulfi ll her potential,
maximizing the use of her skills and abilities. People at
the self-actualization level are less likely to respond to
the types of rewards described for the fi rst four levels.
They accept their own achievements and seek new
opportunities to use their unique skills and talents.
They often are highly motivated by work assignments
that challenge these skills, and they might even reject
common rewards (salary increase, promotion) that
could distract them from using their primary skills.
Only a few people are assumed to reach this level.
As mentioned, these needs are arranged in hierarchical
order, with physiological needs the lowest and self-actualization
©Ryan McVay/Getty Images, Inc.
c06.indd 212c06.indd 212 12/08/10 10:48 AM12/08/10 10:48 AM
Content Theories of Motivation 213
the highest. According to Maslow’s theory, each need is prepotent over all higher-level needs
until it has been satisfi ed. A prepotent need is one that predominates over other needs. For
example, a person at the social and belongingness level will be most concerned with rewards
provided by meaningful relationships and will not be so concerned with esteem-related
rewards, such as public recognition or large bonuses. It follows that a satisfi ed need is no
longer a motivator. For example, after a person’s social needs are met, she will no longer be
concerned with developing and maintaining relationships but will instead be motivated to
seek esteem-related rewards. The need hierarchy theory is supposed to apply to all normal,
healthy people in a similar way.
The need hierarchy theory has not been well supported by empirical research.5 Re-
search has indicated that a two-level hierarchy of lower-order and higher-order needs may
exist, but it has not found much support for the fi ve specifi c need categories proposed by
Maslow. One reason for this fi nding may be the context of the studies. Most people in the
United States, where the studies typically have been done, have satisfi ed their basic needs
and are faced with a complex system of means to satisfy their higher-order ones. It may be
diffi cult for researchers to separate the needs these people experience into the fi ve specifi c
categories proposed by Maslow.
In addition, the idea of prepotency has been questioned.6 Some researchers have
noted that several needs may be important at the same time. For example, a person can
simultaneously have strong social, esteem, and self-actualization needs. Even Maslow’s
clinical studies showed that the idea of prepotency is not relevant for all individuals.7
A fi nal problem with the need hierarchy theory involves a practical concern. It is
diffi cult to determine the present need level for each associate and the exact rewards that
would help satisfy that associate’s specifi c needs. For example, a person’s concern with
being popular with co-workers may be related to either social and belongingness needs or
esteem needs (or both). Being popular can mean that one is liked, but it can also mean
that one has high status in the group. If a manager is attempting to diagnose the meaning
behind a person’s desire to be popular, she could make an erroneous judgment. As another
example, money can be used to meet both physiological and esteem needs, but it may not
have the desired effect in all cases where esteem is the key issue. In general, it is challenging
for managers to apply the need hierarchy to motivate associates.
Although the need hierarchy theory has many weaknesses, it is historically important
because it focused attention on people’s esteem and self-actualization needs. Previously,
behaviorism had been the dominant approach to understanding human motivation. As
you may recall, behaviorism proposes that people’s behaviors are motivated solely by ex-
trinsic rewards. The need hierarchy, in contrast, suggests that the behavior of many people
is motivated by needs refl ecting a human desire to be recognized and to grow as an indi-
vidual. Beyond its historical signifi cance, the need hierarchy also continues to guide some
research in fi elds such as humanistic psychology.8
ERG Theory
ERG theory, developed by Clayton Alderfer, is similar to Maslow’s need hierarchy theory
in that it also proposes need categories.9 However, it includes only three categories: exis-
tence needs (E), relatedness needs (R), and growth needs (G). The relationship of these
categories to those of Maslow’s need hierarchy theory is shown in Exhibit 6-1. As you can
see in the exhibit, existence needs are similar to Maslow’s physiological and safety needs,
ERG theory
Alderfer’s theory that suggests
people are motivated by three
hierarchically ordered types
of needs: existence needs (E),
relatedness needs (R), and
growth needs (G). A person
may work on all three needs
at the same time, although
satisfying lower-order needs
often takes place before a
person is strongly motivated
by higher-level needs.
c06.indd 213c06.indd 213 12/08/10 10:48 AM12/08/10 10:48 AM
214 Chapter 6 Work Motivation
relatedness needs are similar to Maslow’s social and belongingness needs, and growth
needs are similar to Maslow’s needs for esteem and self-actualization. Growth needs are
particularly important in an organization such as W.L. Gore & Associates.
ERG theory differs from Maslow’s theory in two important ways. First, the notion
of prepotency is not fi xed in ERG theory. A person’s existence needs do not necessarily
have to be satisfi ed before she can become concerned about her relationships with others
or about using her personal capabilities. Her desire to meet the existence needs may be
stronger than her desire to meet the two other types of needs, but the other needs may
still be important. The need hierarchy theory proposes that the hierarchy is fi xed and that
physiological needs must be largely satisfi ed before other needs become important.
Second, even when a need is satisfi ed, it may remain the dominant motivator if the
next need in the hierarchy cannot be satisfi ed. For instance, if a person has satisfi ed his
relatedness needs but is frustrated in trying to satisfy his growth needs, his desire for relat-
edness needs again becomes strong (recall that a satisfi ed need is no longer a motivator in
the need hierarchy theory). Alderfer called this the frustration-regression process.10 Thus,
it is possible that a need may never cease to be a motivator. An associate who has many
friends and is very well liked may continue to seek friends and social approval if frustrated
in satisfying growth needs. Understanding this is important for managers because it may
provide them with the reasons for a person’s behavior.
ERG theory has more research support than Maslow’s hierarchy of needs. For exam-
ple, some research has found evidence for the meaningfulness of the three categories of
needs.11 Support has also been found for several of Alderfer’s basic propositions, such as
the concept that a satisfi ed need may remain a motivator.12 Indeed, relatedness and growth
needs have been found to increase as they are satisfi ed. In other words, the more they are
satisfi ed, the more they are desired. However, more research on ERG theory is necessary
to test its usefulness under different conditions. In general, ERG theory may be viewed as
a refi nement of the need hierarchy theory.13
Maslow’s Need Hierarchy Alderfer’s ERG
Theory
Existence Needs
Relatedness
Needs
Growth Needs
Esteem Needs
Social and Belongingness Needs
Safety Needs
Physiological Needs
Self-
Actualization
Exhibit 6-1 Maslow’s
Need Hierarchy and
Alderfer’s ERG Theory
Compared
c06.indd 214c06.indd 214 12/08/10 10:48 AM12/08/10 10:48 AM
Content Theories of Motivation 215
Theory of Achievement, Affi liation, and Power
A third theory, largely developed by David McClelland, also uses need classifi cations and
focuses on the needs for achievement, affi liation, and power. Some have referred to these
as learned needs because they are infl uenced by cultural background and can be acquired
over time.14 The three needs are also viewed as independent, meaning a person can be high
or low on any one or all three needs. Although all three needs are important, the need for
achievement has received the most attention from researchers because of its prominent
organizational effects.15
Need for Achievement
Need for achievement, fi rst discussed in Chapter 5, was originally defi ned by McClelland
and his colleagues as a “desire to perform well against a standard of excellence.”16 People with
a high need for achievement feel good about themselves when surpassing a standard that is
meaningful to them. Further, people with a high need for achievement prefer to set their own
goals rather than to have no goals or to accept the goals set for them by others. Specifi cally:
• They tend to set goals of moderate diffi culty that are achievable.
• They like to solve problems rather than leave the results to chance. They are more
interested in achieving the goal than in the formal rewards they may receive,
although they recognize the value of their inputs and tend to earn good incomes.
• They prefer situations in which they receive regular, concrete feedback on their
performance.17
• They are positive thinkers who fi nd workable solutions to life’s hurdles and
challenges.18
• They assume strong personal responsibility for their work.
Some consider the achievement motive to be a component of self-actualization.19
Consistent with this belief, people high on need for achievement tend to do well in chal-
lenging jobs but do less well in boring or routine jobs. In a study of sales and sales support
personnel, individuals with high achievement needs had positive outcomes only when oc-
cupying more demanding, technically oriented roles.20 Related to this fi nding, people who
aspire to be entrepreneurs frequently have a high need for achievement.21 Also, managers
who have high achievement needs tend to manage differently relative to those who have
lower achievement needs because of a more pronounced goal orientation.22
Although need for achievement is thought to be a relatively stable characteristic in
adults, it is possible to train adults to increase their need for achievement. This training
includes the following steps:23
1. Teach people how to think like persons with a high need for achievement. This
includes teaching people how to imagine the achievement of desired goals and
mentally rehearse the steps necessary to reach those goals.
2. Teach and encourage people to set challenging but realistic work-related goals.
3. Give people concrete feedback about themselves and their performance. Ensure
that people are knowledgeable about their behavior and its outcomes.
4. Create esprit de corps.
In organizations such as W.L. Gore & Associates, people with high achievement needs
are generally positive. Such people, however, can react negatively to the ambiguity found
need for achievement
The need to perform
well against a standard
of excellence.
c06.indd 215c06.indd 215 12/08/10 10:48 AM12/08/10 10:48 AM
216 Chapter 6 Work Motivation
in these organizations. Without reasonably clear pathways to success, high achievement
needs can go unmet in any given time period.
Need for Affi liation
People with a high need for affi liation have a strong desire to be liked and to stay on
good terms with most other people. Affi liative people tend not to make good managers.
They are more concerned with initiating and maintaining personal relationships than with
focusing on the task at hand. In one study, managers of product development units were
assessed. Those with high needs for affi liation were seen as less infl uential and as having
less-infl uential units. They also had units with weaker innovation profi les.24
Need for affi liation is a particularly important consideration in today’s world, where
working from home as virtual contributors is common. About 17 percent of the U.S.
workforce works from home at least two days per week. At IBM, 42 percent of the work-
force works from home, on the road, or at a client location. Signifi cant percentages of
people work virtually at Sun Microsystems, Convergys, and many other companies.
Without daily contact with other associates or managers, individuals with strong af-
fi liation needs might have diffi culty developing strong relations and assessing how well
they are liked. They may be particularly prone to feelings of isolation and dissatisfaction.
To combat these and other issues, companies that rely heavily on virtual contributors have
introduced a host of technologies and practices. To ensure satisfi ed and productive work-
ers, they generally have provided key technologies that help people stay connected, such as
laptops, Internet access, and a personal digital assistant. Many companies also support in-
stant messaging and provide sophisticated collaboration software. Companies such as Sun
Microsystems, Ernst & Young, and Deloitte & Touche designate offi ce and conference
space for associates who occasionally stop in. Also, some managers insist on face-to-face
team meetings every now and then.25
Need for Power
The need for power can be defi ned as the desire to infl uence people and events. Accord-
ing to McClelland, there are two types of need for power: one that is directed toward
the good of the organization (institutional power) and one that is directed toward the self
(personal power).26 People high in the need for institutional power want to infl uence others
for altruistic reasons—they are concerned about the functioning of the organization and
have a desire to serve others. They are also more controlled in their exercise of power. In
contrast, those high in the need for personal power desire to infl uence others for their own
personal gain. They are more impulsive in exercising power, show little concern for other
people, and are focused on obtaining symbols of prestige and status (such as big offi ces).
Research has shown that a high need for institutional power is critical for high-per-
forming managers. People with a high need for institutional power are particularly good
at increasing morale, creating clear expectations, and infl uencing others to work for the
good of the organization. Need for institutional power seems to be more important than
need for achievement in creating managerial success,27 although blending both is perhaps
better than having one or the other.
As discussed in the Managerial Advice feature, the Hay Group has conducted a great
deal of research on managers’ needs. Its consultants apply this work in the fi rm’s well-re-
garded global consulting practice. Importantly, Hay research shows that a strong need for
achievement can create problems. Such problems, however, are less likely to occur when a
need for affi liation
The need to be liked and
to stay on good terms
with most other people.
need for power
The desire to infl uence
people and events.
c06.indd 216c06.indd 216 12/08/10 10:48 AM12/08/10 10:48 AM
Content Theories of Motivation 217
MANAGERIAL ADVICE
The Hay Group, an internation-ally renowned consulting fi rm, studies managers’ needs for
achievement, affi liation, and power.
Through its McClelland Center, it
continues the work that David McClel-
land began many years ago.
In a recent report, the organiza-
tion identifi ed changes in the needs
of tens of thousands of managers,
most of them from the United States.
In terms of average strength, need for
achievement exhibited a substantial
increase from the mid-1980s, with
most of the increase occurring after
1995. Moreover, it became by far
the strongest need. Need for affi lia-
tion exhibited little change during the
key time period, but slipped from
the strongest to the second strongest
need. Need for power weakened and
then strengthened over the time pe-
riod. Overall, the average strength of
this need exhibited little net change,
ending the time period close to where
it began. In terms of rank, it settled
into a distant third place.
While increased need for
achievement among managers im-
plies many positive behaviors and
outcomes, very high levels of this need
can create problems for two reasons.
First, a strong achievement need in a
manager can set the stage for coercive
tendencies, particularly when this need
is paired with relatively weak needs
for affi liation and institutional power.
These coercive tendencies result from
the manager wanting to achieve at
any cost while having limited needs to
be liked and to build engaged associ-
ates. Hay research on IBM managers
showed these tendencies in action.
High-need-for-achievement managers
with lower needs for affi liation and
institutional power produced inferior
work climates through less delega-
tion, less effort in connecting associ-
ates’ work to the overall strategy and
mission of the organization, more
command-and-control behaviors, and
more instances of taking over work
that should be done by others.
Second, a strong achievement
need can set the stage for shortcuts
and illicit actions, all in the name of
achievement. Again, this is of most
concern when high need for achieve-
ment is paired with relatively weak
needs for affi liation and institutional
power. Hay researchers cite Jeffery
Skilling as a relevant example. Skill-
ing was sentenced to prison for his
role in the fall of Enron.
Scott Spreier, a senior consultant
with The Hay Group; Mary Fontaine,
a vice president at Hay; and Ruth
Malloy, director of research at Hay’s
McClelland Center recently provided
a set of guidelines designed to help
high-achievement managers avoid
problems.
• Understand needs. Without ex-
plicitly understanding their own
personal needs in the workplace,
managers cannot manage those
needs. Understanding needs can
be accomplished by simply think-
ing about valued activities and
outcomes or by using available
assessment tools (one popular tool
will be presented in this chapter’s
installment of Building Your Human
Capital ).
• Manage needs. Having gained
awareness of their needs, manag-
ers can take actions to handle them
effectively. A manager with quite a
strong achievement need might ask
a trusted colleague to monitor his
behavior for coercion. Such a man-
ager might also seek training fo-
cused on the benefi ts of delegation
and an empowered workforce. Fi-
nally, she might channel some of the
need for achievement into nonwork
pursuits (e.g., competitive golf).
Managers over the Edge
Sources: Hay Group, “About Hay Group,” 2007, at http://www.haygroup.com/ww/About/Index.asp?id=495;
Hay Group, “A Recent Rise in Achievement Drive among Today’s Executives,” 2006, at http://www.haygroup.com/
ww/Media/index.asp; Hay Group, “The McClelland Center Fact Sheet,” 2002, at http://www.haygroup.com/
wwResearch/Detail.asp?PageID=703; S.W. Spreier, M.H. Fontaine, & R.L. Malloy. 2006. “Leadership Run Amok: The
Destructive Potential of Overachievers,” Harvard Business Review, 84, no. 6: 72–82.
©
St
oc
kb
yt
e