OB 360

Organization

Consciously coordinated social unit composed of two or more people that functions on a relatively continuous basis to achieve a common goal.

Organizational Behavior

The systematic study and application of knowledge about how individuals and groups act within the organizations where they work

The two dimensions of personnel selection

Likability and Competence

Lovable Star > Lovable Fool > Competent Jerk > Incompetent Jerk

PESTLE

Political, Economic, Sociocultural, Technological, Legal, Environmental

Internal Analysis (7 S’s)

Strategy, Structure, System, Style, Staff, Skills, Shared Value

Departmentalization

Basis on which jobs are grouped together for the purpose \n of coordination, i.e. Product, Geographically, Customer

Functional Structure

\n A functional structure groups jobs based on similarity in functions.

Benefits of a Functional Structure

* Good coordination within functions
* Efficient use of resources
* Provide in-depth skill development and clear career progress for individuals

Use when:

* Stable, certain industry environment
* Small number of business offerings
* Small-to-medium sized organizations
* Little interdependencies between functions

Downsides of a Functional Structure

Downsides of Functional Structures:

* High risk of the “silo” effect
* Poor intergroup coordination
* Narrow strategic focus within functional groups
* Homogeneous network for individuals

Divisional Structure

A divisional structure groups jobs based on products, customers, services, or geographic locations

Benefits of a Divisional Structure

Good coordination between functions within a division

* More customer/product oriented
* Diverse network for individuals

Use When:

* Unstable, uncertain industry environment
* Multiple offerings
* Large-sized organizations
* High interdependence between functions
* Goals of product/customer/geographic specialization or innovation

Downsides of a Divisional Structure

* Duplication of Resources
* Less Technical Specialization or Expertise Development
* Poor coordination across different departments

Formalization

The extent to which policies, procedures, job descriptions, and \n rules are written and explicitly articulated

Benefits of High Levels of Formalization

* Clear and standardized procedures
* Predictable behaviors
* Little ambiguity for stakeholders

Use When:

* High stakes jobs (military)
* Employees are uncertainty-averse

Downsides of High Levels of Formalization

* Stifles creativity
* Reactive to internal shocks
* Slow decision making

Benefits of Low Levels of Formalization

* Room for flexibility
* Promotes creativity
* Faster decision-making

Use when:

* Organization values innovation
* Employees embrace uncertainty

Span of Control

The number of employees reporting to a given manager

Narrow Span Benefits

* Better supervision and monitoring
* Close control
* More managerial positions and advancement opportunities

Use when:

* The task is complex
* There are many locations

Downsides of Narrow Span

* Discourage autonomy
* Excessive distance between top and bottom levels
* Fosters silos

Wide Span Benefits

* Greater freedom for employees
* Sense of self-actualization
* Faster communication and decision making

Use when:

* The manager is capable
* Employees are motivated and capable

Downsides to Wide Span

* Little close supervision
* Fewer opportunities for guidance
* High managerial workload
* Fewer managerial positions

Centralization

The degree to which decision-making authority is concentrated at higher levels in an organization

Benefits of Centralization

* Clear line of communication & responsibility
* Straightforward implementation

Use when:

* Then environment is stable
* Decisions are significant
* The organization is in a crisis

Downsides of Centralization

* Can lead to ill-informed decisions
* Lack of buy-in for implementation

Benefits of Decentralization

* Sense of empowerment
* Procedural fairness
* Faster process for minor decisions

Appropriate when:

* The environment is dynamic
* Decisions are minor
* Lower-level employees are capable and experienced decision makers

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Downsides to Decentralization

* Requires accountability & capability from lower-level employees
* Competing Objectives

Silo Effect

A silo is a natural by-product of organizational structure when groups of \n organizational members, separated by department, specialization, or location, work in a vacuum of one another leading to:

* Lack of communication between groups
* Throw it over the wall, diffused responsibility
* Prioritization of group goals
* Unproductive competition

Matrix Structure

A type of hybrid design that cross a functional structure with divisional structure by having teams but also having employees reporting to managers within functions

Advantages of Matrix Design

* Highly Responsive
* Integration of Knowledge
* Quick Responses to technical problems and customer demands
* Increased communication and cooperation between departments

Disadvantages of Matrix Design

* Decision rights confusion
* Resource allocation confusion
* Power struggles and conflict
* Can potentially create role ambiguity and role conflict

When do companies evolve?

* When size increases
* Effectiveness of simple structures drops
* Cultural fit changes
* Leader change

Organizational Design Priority

Goals > Configure Structural Elements > Refine design for the industry

Is change required?

Evaluate:


1. Quality of communication and collaboration
2. The Capacity to adapt
3. The balance of power between groups

Organizational Barriers to Change (6)

* Structural Inertia
* Embedded attitude and routine
* Threat to established power
* Threat to resource allocation
* Lack of vision or goals
* Unclear communication to employees

Individual Barriers to Change (4)

* Self interest
* Personality
* Lack of clear understanding of the change
* Lack of trust

Kotter’s Model of Change

==Establish== opportunities and urgency

==Form== a change team

==Create== a specific shared vision

==Enlist== people in the org

==Empower== through removed barriers

==Generate== measurable action

==Sustain== change through monitoring

==Institute== link between new behaviors and success

What are common pitfalls of group interaction?

* Pitfall 1: When a team does not share clear goals or strategies for goal achievement
* Pitfall 2: Decision making mistakes are made
* Pitfall 3: Expertise is not fully utilized

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What are the three skills required for synergistic team performance?

Rational skills, task skills, and interpersonal skills

What are some distinguishing factors of a team?

* Shared leadership
* Mutual Accountability
* Common Purpose
* Complimentary Skills
* Shared Goals
* Clear Workflow

Four Qualities of Diversity

Social Categories, Expertise and Skills, Personality, Values and Beliefs

Benefits of a Diverse Team

Broad range of knowledge

Reduces Groupthink

Important for complex decision making or creativity

Groupthink

A psychological phenomenon where people make irrational or sub-optimal decisions so as to maintain conformity or harmony within a group

Consequences of Fault-lines

Rise to in-groups and out-groups

Decreased group cohesion

Increased intergroup conflict

Favored treatment

Diversity Training

Deliberate efforts to reduce bias and increase social diversity, but have little long lasting impact. Shame leads to avoidance rather than corrective action

How to manage a diverse team through leadership style?

Start with task orientation, then switch to relationship orientation

Framework for Team Design

1. Evaluate needs (current complementary skills)
2. Optimize Diversity (characteristics)
3. Set the Stage (Establish shared goals and workflow)

Five Distinct Principles of Developing Shared Goals

Clarity, Challenge, Commitment, Task Complexity, Feedback

Pooling

Work process where groups specialize in subtask rather than collaborating, good for when there are clear goals and a stable environment

Sequential

Work process where groups work on one thing before handing it sequentially to the next group, efficient in stable environments, but can cause silos

Reciprocal

Work process where work can flow in between groups, good for when the task is complex and the environment is dynamic

Centralization (Group Decision Making)

Decision making process where higher ups hold much of the control; is good for fast decisions but can be ill informed, as well as have a lack of buy in

Nominal Group Technique

Decision making process where each member of a group independently write their own thoughts before everyone shares in order, after which each idea is discussed and ranked anonymously

Intrinsic Rewards

Reward based on interest and enjoyment in the task itself

Extrinsic Rewards

Reward based on the outcome that will result by doing the task

Effort > Performance Expectancy Factors

The more people believe that their effort will result in high performance, the more likely they are going to start the task and put in effort

* Task Nature
* Goal Clarity
* Employee Ability
* Employee Confidence
* Past Performance

Performance > Outcome Instrumentality Factors

The more people believe that high performance will bring about rewards, the more motivated they are to perform

* Clarity
* Alignment
* Trust
* Fairness

Rewards > Personal Needs Valence Factors

The more meaningful or valuable the rewards are to the individuals, the more motivated they are to perform

* Reward Attractiveness
* Reward Worth

Extrinsic Downsides

* Lack of boost in low performance culture
* Can lead to unethical behavior
* Can become a psychological burden
* Narrows problem solving view

Equity Theory

Employees seek to maintain equity between the inputs that they bring to a job and the outcomes that they receive from it against the perceived inputs and outcomes of others

Four Factors of Fairness Perception

* Distributive Justice
* Process Justice
* Informational Justice
* Interactional Justice

Evaluation Feedback v. Developmental Feedback

Evaluation feedback affirms strengths while pointing out weaknesses and assesses future possibilities

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Developmental feedback creates actions to change or reinforce inputs or outputs, or develops plans for training with goals

Effective Performance Feedback

Create measurable criteria, specific expectations

Be open minded

Create future goals with a clear performance reward link

If output/input

Negative Inequity which leads to demotivation

If output/input=output/input

Fairness, leading to satisfaction and motivation

If output/input>output/input

Positive Inequity, results depend on equity sensitivity

Intrinsically Motivating Jobs Involve

Sense of Achievement, Purpose, and Affiliation

Job Characteristics Model relies on

Motivating Potential Score=

\[Skill Variety + Task Identity + Task significance / 3\] x Autonomy x Feedback

Skill Variety

The extent to which the job requires a person to utilize multiple high-level skills, need challenge and job rotation

Task Identity

The degree to which a person is in charge of completing an identifiable piece of work from beginning to end, should be involved in entire process

Task Significance

The degree to which the job has a substantial impact on the lives of other people, giving people more meaning in their work

Autonomy

The degree to which a person has the freedom to decide how to perform his or her tasks, which can be effected by formalization and span of control

Feedback

The degree to which people learn how effective they are at work

Task Crafting

Reconfiguring your job to be more fulfilling

Relational Crafting

Changing the nature of the interaction with others at work

Cognitive Crafting

How can you reframe your mindset or perspectives about the purpose of aspects of your job

Organizational Culture

A system of shared assumptions, values and beliefs that show employees what is appropriate and inappropriate behavior

Three Tiers of Culture

Artifacts: tangible aspects

Values: shared principles

Basic Underlying Assumptions: beliefs