OB Midterm 2 Short Answer

What are groups and what are some situations in which to use groups

Definition: 2 or more people interacting interdependently to achieve a common goal

Situations to use:

• Relatively uncertain or complex problem (hard to identify expertise/there’s ambiguity)

• Problem requires intergroup cooperation (better to have multiple points of contact

• Acceptance of and commitment to decision are critical for implementation
  

What questions should we ask to determine whether a team fits the situation?

Can the work be done better by more than one person?

• Does the task require creativity/ innovation

• Is this task/decision complex and of extreme importance

• Are there a variety of skill sets/competences needed

Does work create a common purpose or set of goals for the people in the group that is more than the aggregate of individual goals?

Are members of the group interdependent? (are there some individuals that would better off working alone?)

Does group size improve performance? Depends on nature of task (additive, disjunctive, conjunctive)

Additive: Sum total matters - tasks where group performance is dependent on sum total of individual performances

• Etc. Relay race (total time matters), construction

Disjunctive: Best contributor matters - tasks where group performance is dependent on the performance of the best group member

• Etc. Research and development(?)- Person that comes up with best solution may impact overall goal most, NASA spaceship thing

Conjunctive: Worst contributor matters - tasks where group performance is limited by the performance of the worst performer

• Etc. Synchronized swimming, assembly line

Relationship between group size and satisfaction

Negative relationship - may be more conflict the larger the group.

• Social inhibition about participating in larger groups (social anxiety)

• Individual contributions are harder to recognize (motivation drops)

  • Can reduce identification with group

Advantages and Disadvantages of group diversity

Advantages: Multiple perspectives, greater openness to new ideas, multiple interpretations, increased creativity, increased flexibility, increased problem-solving skills

Disadvantages: Ambiguity, complexity, confusion, miscommunication, difficulty in reaching a single agreement, difficulty in agreeing on specific actions

Group diversity continued

• Surface Diversity: Age, gender, race

  • Surface diversity doesn’t matter as much but rather deep diversity

• Deep Diversity

  • Differences in attitudes toward work or how to accomplish a goal (etc. worldviews)

• Rule of thumb

  • Include enough diversity to capitalize on different perspectives but not too much such that it hinders communication and performance

What is social loafing

• Tendency to withhold effort when performing a group task

• Free riders: lower effort to get a free ride at expense of others

• Sucker effect: people lower effort because tey feel others are free-riding (think equity theory where you reduce inputs to restore equity

How do you combat social loafing

• Make individual performance more visible (easier with smaller groups)

• Make sure work is interesting

• Increase feeling of indispensability (have purpose)

• Increase frequency/quality of performance feedback

• Reward group performance (entire team will make sure others don’t slack off, slacker could also feel bad and improve)

• Change norms (?)

How do you improve the effectivness of brainstorming

• Identifiable contribution

• No judgements during brainstorming session

• Equal status

• Using individual sessions to generate initial ideas

What is motivation and what are the 4 aspects

Definition: The extent to which persistent effort is applied toward a goal

4 aspects: Quantity of effort, persistence of effort, direction of effort (eg. quality), goal toward which effort is directed

Intrinsic vs Extrinsic Motivation

Intrinsic motivation:

• Wanting to do a task for its own sake (eg. interesting)

• Usually self-applied, from inside

• Strong and stable impact

Extrinsic motivation

• Wanting to do a task to obtain external reward (eg. money, recognition)

• Usually applied by others (managers), from otside

• Only work in certain situations, not longlasting
  
  

What is self-determination theory?

• Discusses when individuals are intrinsically motivated/ the degree to which behaviour is self-motivated/ self-determined

• Proposes a continuum of motivation (range of intrinsic motivation) from autonomous to controlled

  • Autonomous motivation occurs when people are self-motivated by intrinsic factors

  • Controlled motivation occurs when people are motivated to obtain a desired consequence or extrinsic reward

Self-determination theory chart

Amotivation —> Extrinsic Motivation (External regulation, introjected regulation, identified regulation, integrated regulation) —> Intrinsic motivation

What are the 3 fundamental intrinsic needs in self-determination theory

• Autonomy: need to be in control of one’s own fate

• Competence: need to grow and experience mastery

• Relatedness: need to connect with others

Needs motivate one to initiate behaviour, when 3 needs are satisfied, motivation is more intrinsic, when 3 needs not satisfied=extrinsic

What is expectancy theory

• States that motivation is determined by the outcomes that people expect to occur as a result of their actions

• Primarily a theory of extrinsic motivation (but not exclusively)

• 3 key elements:

  • Expectancy: An individual’s belief about the likelihood of achieving a desired performance level when exerting effort

  • Instrumentality: Perceived relationship between performance of a behaviour and likelihood of certain outcome

  • Valence: The positive/negative value of a certain outcome

Expectancy Theory continued

Effort—>Performance (1st level outcome)—>Outcomes (2nd level outcome)

How can we use the expectancy theory to motivate others?

Boosting expectancies: increasing self-efficacy

• Provide proper equipment

• Train and mentor

• Develop correct work procedures

• Listen to employee problems and provide feedback

Boosting instrumentality: Clarify reward contingencies

• Ensure there are objective performance assessments

• Ensure there is a fair rewarding system

Difficult to change valences but:

• Appreciate diversity needs and consider design of rewards

• Valence difficult to change but managers can make other second-level outcomes possible which may change eqn

What is the goal setting theory?

Premise: Goals are fundamental motivators of human action theory lays out how goals are translated into motivation

How do goals affect behaviours?

• Direct attention to particular task

• Mobilize on-task effort

• Encourage task persistence

• Facilitate strategy development

Example: Goal= getting A on exam—> Behaviour —> Feedback=B+ from 1st exam—> Discrepancy—>Not satisfied so increase effort

Satisfaction leads to maintaining effort. Dissatisfaction leads to an increase in effort

Goals are most motivational when":

• They are specific (plastic cup activity - either 10 or 20)

• They are challenging

• Organizational members accept them and commit to them

• Feedback about progress toward goal attainment is provided

  • Be specific, accurate, credible, and timely

  • Enables individuals to assess progress toward goals and adjust

Perceptions of Goal Velocity

Goal Velocity=Rate of discrepancy change over time (not just the discrepancy between current and goal state that matters)

• There is a velocity by discrepancy interaction

  • Affects task satisfaction: If you're making good progress (high velocity) and the gap is closing, you might feel more satisfied

  • Success expectancy

  • Goal commitment

Example 1: Feedback is important } if goal is to lose 50 pounds, scale would be feedback. If no scale would give up bc don’t know how well you’re doing

Example 2: End state} Goal is still to lose 50 pounds. A loses 10 pounds by end of month. B loses 2, Person A becomes more motivated

Goals and the role of emotions

At their core emotions are internal feedback regarding goal appraisals

• Negative emotions related to goal frustration, positive emotions are related to goal success

Emotions convey goal-relevant information

• Tell us source of goal frustration/ success

  • Eg. Anger at someone who frustrated goals, pride in ourselves for goal success

• Tell us type of goal that is frustrated

  • Eg. fear - relates to threat to safety goal

• Tell us magnitude of the appraisal

  • Eg. upset vs anger

What could we do with our goals if we wanted to feel better? —>Set smaller goals to reach larger ones

What is money and its role

Money: Most commonly used incentive in organizations : helps needs get met

Not necessarily an effective motivator because many people emphasize: relationships in workplace, or opportunities for development

Relationship between pay level and..

• Job satisfaction: Very weak positive relationship (r=0.15)

• Pay satisfaction: Weak positive relationship (r=0.23)

Money often not used effectively as a reward

• Reward follies (mistake) occur when orgs “reward A while hoping for B” (etc. Xmas bonus)

  • Etc. Want to encourage teamwork but reward best individual team member instead

• Why does this happen?

  • Stuck in old patterns of rewards and recognition

  • Don’t look at big picture and focus on short-term results

  • Make assumptions

Etc. Bonuses= investment in future performance, outcome you want: for them to work harder

Cognitive Evaluation Theory (Part of Self Determination Theory)

**More about decrease in autonomy

• Allocating extrinsic rewards for behaviour that was previously intrinsically rewarded tends to decrease the overall level of motivation

• Why does this occur?

  • Loss of control over behaviour

  • Internal changes to external explanation

  • “It was interesting” to “I did it for the $”

Etc. Children used to draw for fun without being prompted. Started being told they would get $ for each drawing. Once they stopped offering $, children would no longer willingly draw.

Key points about rewards

• Recognize individual differences

  • Employees have different needs

  • Don’t treat them all alike

  • Spend time necessary to understand what’s important to each employee

• Link rewards to performance

  • What gets measured/rewarded gets done

  • Expectancy theory can provide insight in making rewards effective

  • Provide feedback and allow employees to participate in decisions that affect them

• Formal rewards are not everything

  • Orgs should focus more on creating motivating environments

Job Characteristics Theory

*Can design job to be intrinsically motivating

Core job characteristics: have a strong potential to affect motivation

• Skill variety: opportunity to do variety of job activities using variety of skills and talents

  • Low skill= putting 1 bolt in car at assembly line

• Task identity: Extent to which a job involves doing a complete piece of work

  • Etc. Assembling an entire car

• Task significance: impact job has on other people

• Autonomy: Freedom to schedue one’s work activities and decide work procedures

• Feedback from job: information about one’s performance effectivenss

JCT Continued

Core Job Characteristics—>Critical Psychological States—>Personal and Work outcomes

Motivating Potential Score (MPS)

MPS= Extent to which a job is designed to motivate intrinsically

MPS= (Skill variety + task identity + task significance/ 3) x Autonomy x Feedback

Autonomy and feedback the most important bc if one is 0 entire eqn is 0

Equity theory

When employees perceive inequality, they are motivated to restore equity

Can be done through:

• Try to get their own outcomes increased

• Decrease their own inputs

• Attempt to get comparison other’s outcomes decreased

• Attempt to have comparison other’s inputs increased

• Find another “relevant other” to use for comparison

• Leave situation

• Rationalize inequity

Decision making: Perfect vs Bounded Rationality

Perfect rationality: A decision strategy that is completely informed, perfectly logical, and oriented toward economic gain

Bounded rationality: A decision strategy that relies on limited information and that reflects time constraints and political considerations

Assumptions of the rational model (relies on rational thinking)

• Problem is clear and unambiguous

• We know all options

• We have clear preferences (weigh things differently)

• Preferences are constant (weights are stable over time)

• No time or cost constraints

• Maximum payoff

How are managers limited in terms of bounded rationality

• Time constraints

• Capacity to acquire and process information

• Reliance on flawed memory; obtain too little or irrelevant information; potential ignorance of or miscalculation of values and probabs

• Political considerations

• Self interest

  • Criteria for solution evaluation involve political factors to please others and factors that protect self image

How are decisions actually made

• We often relied on automatic thinking/ Type 1

• Full of biases and heuristics (ie. shortcuts in thinking

• We tend to only focus on visible problems

• We satisfice: thinking smth is good enough and stopping

• We use intuition

What is problem framing

• Refers to manner in which objectively equivalent alternatives are presented

• If info is framed positively (gain frame) it encourages conservative decisions - take sure thing over a chance at gaining more (this will save 1 of 3 plants for sure)

• If info is framed negatively (loss frame) it encourages risk - we take a chance at losing less rather than accepting a sure loss (this plan will result in loss of 2 of the 3 plants for sure)

Prospect Theory - Loss Aversion

Value of gain < value of loss

Loss of x hurts about twice as much as a gain of x pleases - why you’re likely to take risks to avoid losses

**We can’t assume our judgements are good building blocks for decisions because the judgements themselves may be flawed - Kahneman and Tversky

What is groupthink and why does it happen?

• The capacity for group pressure to damage the mental efficiency, reality testing, and moral judgment of decision making groups - dynamics of being in a group impedes our ability to make rational decisions

• Why does it happen?

  • Strong identification with group - see it as a part of who they are

  • Concern for group’s approval - need to fit in

  • Isolation of the group other sources of info

  • Promotion of decision by group leader (leader stating preference will influence others)

What are the groupthink symptoms? (8)

• Illusion of invulnerability

  • members overconfidence and ignore danger signals

• Rationalization

  • problems are rationalized away - use tortured logic to justify decision

• Illusion of morality

  • Decisions are perceived as morally correct

• Stereotypes of outsides

  • Unfavourable stereotypes of those outside groups - ou have your own ingroup and an outgroup that you don’t identify with

• Pressure to conform

  • Members pressure each other to conform with group’s views

• Self-censorship

  • Members convince themselves to avoid voicing opinions contrary to group

• Illusion of unanimity

  • Members perceive unanimous support

• Mindguards

  • Some members “protect” group from info that goes against decisions

Devil’s Advocate ROle

• Person appointed to identify and challenge the weaknesses of a proposed plan or strategy - must be formalized to make it work

  • Introduces controversy

  • Brings in extra info

  • Illuminates full pros and cons of decision

  • Can be used to challenge groupthink by targeting reason not symptoms since devil’s advocate doesn’t identify with group strongly (don’t seek approval)

What is the risk with groups

Risky shift: Tendency for groups to make riskier decisions than the average risk initially advocated by individual team members

Conservative shift: Tendency for groups to make less risky decisions than the average risk initially advocated by their individual members

**group discussion polarizes or exaggerates the initial position of group members

Risk and groups chart

**We become more extreme in our decisions to differentiate ourselves - we want to create ingroup and outgroup (become more extreme to fit in with one side of chart)

What is escalation of commitment

Definition: Tendency to invest additional resources in an apparently failing course of action (etc. gambling even if you’re down to get the money back)

Sunk costs= permanent losses of resources incurred as the result of a decision (since these resources have been lost due to a past decision, they should not enter into future decisions)

Why does escalation of commitment occur

• People want to reduce dissonance by recouping “sunk cost” (self justification theory)

• Overconfidence (confirmation bias)

  • Irrational belief that the additional investment will succeed

• Problem framing after a sunk cost (Loss Aversion based on Prospect theory - focusing on fact that you lost 1k, or fact that you still have 300k in bank?)

• Social norms favour consistent behaviour (Impression management)

  • Like to look good in front of others and don’t want to seem like a hypocrite

What can we do to avoid escalation of commitment

• Actively seek disconfirming info about chosen alternative

• Reframe losses as gains to prevent risk-seeking behaviour

• Structure incentives so that decision makers are not punished for inconsistency (social norms)

• Hand off decisions about whether to commit more resources to an investment to NEW decision makers (VERY IMPORTANT if you know you’ll be biased - they give fresh perspective)

• Be careful not to consider expended resources when making decisions

• Make sure decision makers are frequently reminded of the goals of the investment

Affect and decision making

• People in a good mood (more likely to autopilot and preserve resources)

  • Tend to overestimate likelihood that good events will occur and underestimate occurrence of bad events (ppl in bad mood do opposite

  • Tend to adopt simplified, shortcut decision making strategies, more likely violating rational model

• People in negative mood (on lookout for harm and spending resources)

  • Prone to approach decisions in a more deliberate, systematic, detailed way

How does structure help decision making (it helps reduce randomness)

• No history of past interaction (structure compensates for lack of norms)

• History of conflict (structure controls interaction)

• Lots of people

• Participants of unequal status (structure helps low status views get heard)

• Scarce on time (forces more efficient use of time and more preparation)

• Heterogeneous group (helps with different norms)

• High need to get acceptance and commitment (helps with procedural justice)

What is negotiation

Decision-making process among interdependent parties who do not share identical preference

Define the 2 negotiation strategies and explain the payoff structure, the primary motivation, interests, and relationships

Distributive bargaining: Win-lose negotiation that seeks to divide up a fixed amount of resources (someone else’s win is our loss and vice versa)

Payoff structure: Fixed amount of resources to be divided
Primary motivation: To gain at the expense of others
Interests: Diametrically opposed
Relationships: Short-term

Integrative bargaining: Win-win negotiation that assumes mutual problem-solving can enlarge the assets to be divided

Payoff structure: Variable amount of resources to be divided
Primary motivation: To maximize joint outcomes
Interests: Convergent or congruent
Relationships: Long-term

How do you negotiate and define BATNA

• Assess personal goals, consider other’s goals, develop strategy

• Identify target and resistance points

  • Target: what one would like to achieve

  • Resistance: lowers outcome acceptable

• Identify your BATNA: Best Alternative To a Negotiated Agreement (outside of current negotiation)

  • You should not be accepting less than your BATNA

    • Etc. If debating between buying a 50k car at dealership your BATNA would be a 45k from another dealership - etc. walk away

What is the importance of planning in negotiation

• Is critical

  • Must walk into the negotiation prepared

  • Define your negotiating zone

  • Set resistance and target points

  • Insufficient planning= failure

  • Be prepared to walk away if offers are irrational

What are common mistakes in negotiation

• Irrational escalation of commitment

  • Continuing a previously chosen course of action beyond what a rational analysis would recommend

  • “If at first you don’t succeed then try, try again. Then quit there is no point being a fool about it”

    • Two ways to resist it: BATNA and Reservation Price

• Belief in the mythical fixed-pie

  • Assumption that your own interests directly conflict with the other party (win-lose situation either i win or he wins)

• Anchoring and adjustment ***

  • The standard against which future adjustments are measured : often based on faulty/ incomplete info

  • Best way to solve id by doing your homework and knowing what is reasonable

  • If you’re making the first offer make it ambitious but discussable

    • Etc. Car dealership is 55k - you’d want to negotiate it down 3k - but you would do this regardless even if it were 60k - instead of focusing on how much $ to negotiate down think about if original offer (55k) is reasonable

How to improve your bargaining position

• Begin with positive overture

• Address problems, not personalities

• Pay little attention to initial offers

• Emphasize win-win solutions

• Create an open and trusting climate

How to negotiate a better deal

1. Acknowledge emotions but stick to business

2. Take time

3. Ask questions

4. Research and trade information

5. Evaluate proposals thoroughly

6. Stay open to creative solutions by focusing on interests rather than just winning

7. Recognize that sometimes the best deal is no deal at all - not all negotiations end in agreement

What to do if you reach an impasse

1. Focus on interests vs positions

2. Make small concessions

3. Take a break

4. Bring in a third party for a fresh perspective

2 common irrational tendences in negotiation

• Unrealistic expectations

  • Under or overconfidence in the value of your assets

    • Obtaining information is the cure —> look for opportunities that add value

• Escalation of commitment

Signals in distributive negotiation

Bids

• Small incremental changes in bid offer= set on bid price

• Large changes= willing to accommodate for you

Speed

• Speed in which someone responds

  • If they respond slowly: will come off that they’re not as desperate

  • If they respond quickly: more desperate to close the deal
    

Explain risk vs. opportunity, negotiating in a closet, nibble, and post-settlement settlement

• Risk vs. Opportunity

  • Depends on attitude of negotiators: risk averse, risk taker etc, some may prioritize risk over opportunity

  • Some may just want security while some may see upside of potential

• Negotiating in a closet

  • Avoid negotiating with yourself when the other is taking longer to respond

• Nibble

  • When one party tries to take advantage of the happy environment after the deal is closed and takes a nibble at another deal

• Post-settlement Settlement

  • When the agreement is secure, you can make amendments that benefit both parties

What are integrative strategies

• Build trust and share information

• Emphasize commonalities and minimize differences

• Ask lots of questions (try to get good understanding of other’s real needs and objectives

• Give away some information

• Make multiple offers simultaneously

• Search for a novel solution that meets goals of both sides