RSM260 - Organizational Behaviour FINAL EXAM

Leadership

The use of power and influence to direct followers’ activities toward achieving goals.

Power vs. influence

Power is direct control through rewards and punishments; influence is social persuasion without formal authority.

Leadership emergence

When an individual becomes a leader informally through group dynamics rather than formal assignment.

Leadership effectiveness

"The extent to which a leader’s actions result in goal achievement, commitment, and trust."

First advocacy effect

The tendency for people who speak first or often to be perceived as leaders.

Survivorship bias in leadership

"Focusing only on successful leaders while ignoring those who failed, leading to flawed conclusions."

Trait approach to leadership

The view that certain stable personal traits make individuals better leaders.

Key problem with trait approach

Traits explain very little variance in leadership effectiveness and ignore situational context.

Situational leadership approach

"The idea that effective leadership depends on the task, context, and follower characteristics."

Why there is no single best leadership style

"Effectiveness varies across situations, tasks, and follower needs."

Autocratic leadership

A leadership style where the leader makes decisions unilaterally with little follower input.

Autocratic leadership pro

Efficient in emergencies or highly structured environments.

Autocratic leadership con

Reduces intrinsic motivation and employee satisfaction.

Democratic leadership

A leadership style that involves followers in decision-making.

Democratic leadership pro

"Increases satisfaction, commitment, and decision quality."

Democratic leadership con

"Decision-making can be slower, especially early on."

Laissez-faire leadership

A leadership style characterized by minimal direction and high autonomy.

Laissez-faire leadership risk

Often leads to low performance unless the team is highly skilled.

Transformational leadership

A style that motivates followers by inspiring a shared vision and personal growth.

Four I’s of transformational leadership

"Idealized influence, inspirational motivation, intellectual stimulation, individualized consideration."

Transformational leadership risk

Can encourage blind trust or risky decisions if unchecked.

Bounded rationality

"The idea that people want to be rational but are limited by information, time, and cognitive capacity."

System 1 thinking

"Fast, automatic, intuitive thinking that is prone to bias."

System 2 thinking

"Slow, deliberate, analytical thinking that is more reliable."

Confirmation bias

Seeking information that confirms existing beliefs while ignoring contradictory evidence.

Anchoring bias

Relying too heavily on initial information when making decisions.

Availability heuristic

Judging probability based on how easily examples come to mind.

Problem framing

The way a decision is presented influences the choices made.

Escalation of commitment

Persisting with a failing course of action due to prior investments.

Sunk costs

"Past, unrecoverable costs that should not influence current decisions."

Rational decision-making model

"Identify problem, gather information, develop alternatives, evaluate options, choose and implement."

Key solution to decision biases

"Slow down decisions, use objective criteria, and seek diverse perspectives."

Legitimate power

Power derived from formal authority or position.

Reward power

Power based on the ability to provide valued outcomes.

Coercive power

Power based on the ability to punish or impose negative outcomes.

Expert power

Power derived from knowledge or expertise.

Referent power

Power based on admiration or identification with the leader.

Manipulative power effect

Activates reward-seeking behavior while suppressing threat sensitivity.

Distributive justice

Perceived fairness of outcome distributions.

Procedural justice

Perceived fairness of the processes used to determine outcomes.

Internalization

Influence response where the target genuinely agrees.

Compliance

Public agreement without private acceptance.

Resistance

Active or passive opposition to influence.

Milgram experiment

Demonstrated how authority can lead individuals to act unethically.

Four-component ethics model

"Ethical behavior requires awareness, judgment, intent, and action."

Negotiation

A decision-making process among interdependent parties with differing preferences.

Distributive negotiation

A zero-sum negotiation focused on claiming value.

Integrative negotiation

A negotiation that creates value through trade-offs and mutual gains.

Deal-maker’s curse

Over-focusing on winning can lead to worse outcomes.

BATNA

Best Alternative to a Negotiated Agreement; key source of power.

Reservation price

The worst acceptable outcome before walking away; never revealed.

Target price

The ideal outcome a negotiator aims to achieve.

ZOPA

Zone of Possible Agreement between parties’ reservation prices.

Pareto-optimal solution

An agreement where no party can be made better off without harming another.

MESOs

Multiple Equivalent Simultaneous Offers used to reveal preferences.

Benefits of MESOs

"Reveal priorities, anchor negotiations, and create integrative outcomes."