Organizational Behavior Final Review

Power & Influence in Organizational Behavior

• Power and influence are critical in understanding how organizations function and how team dynamics operate.

  • Power: The capacity to influence the behavior of others or the course of events.

  • Substitutability: Refers to how easily a resource can be replaced. There is an inverse relationship between back power and dependency. Dependency is influenced by factors such as scarcity, importance, and alternatives available.

Negotiation Concepts

• BATNA: Acronym for Best Alternative to a Negotiated Agreement. This concept is crucial in negotiation as it sets a baseline for acceptable outcomes.

• Mutual Goals: This involves common objectives that teams aim to achieve, distinguishing them from simple groups.

Team Dynamics vs. Group Dynamics

• Team: A collective of individuals working together with a shared purpose.

• Group: Individuals who may work together but do not necessarily share the same objectives.

• 5-Stage Model of Team Development: Key stages are Forming, Storming, Norming, Performing, and Adjourning; Norming is the third stage.

Traits of Effective Leaders

• Leaders often exhibit high levels of:

  • Extraversion: Sociability and assertiveness.

  • Conscientiousness: Dependability and the extent to which a person is organized.

  • Openness: Willingness to embrace new ideas and experiences.

• According to behavioral theories, leaders engage in two primary types of behaviors:

  • Task-oriented: Focused on tasks and goals.

  • People-oriented: Concerned about the well-being of team members.

Organizational Culture

• Values: Shared principles that guide behavior within the organization (e.g., mission statement).

• Artifacts: Tangible elements within an organization that reflect core culture values.

• Responsive Culture: A flexible, experimental organizational culture that adapts quickly to change.

• Counterculture: Subset beliefs and values that challenge the dominant culture.

Organizational Structure

• Mechanistic Structures: Characterized by high centralization, formalization, and departmentalization.

• Divisional Structure: Grouped based on products, services, customers, or geographical locations.

• Matrix Organization: Combines functions of both functional and divisional structures.

Leadership and Decision-Making

• Laissez-Faire Leadership: Leaders allow employees to make decisions independently.

• Groupthink: A phenomenon where the desire for group cohesion results in poor decision-making. Strategies like assigning a devil's advocate can help mitigate this.

• Social Loafing: The tendency for individuals to put forth less effort in a group setting. Clearly defined roles can help reduce this issue.

• Group Decision-Making: Often influenced by the Common Knowledge Effect, where information known by most group members is favored over unique insights.

Negotiation Strategies

• Distributive Negotiation: Involves strategies like anchoring that focus on dividing a fixed resource.

• Integrative Negotiation: Centers on collaboration and an open approach to arriving at mutually beneficial agreements; a cooperative approach is key here.

Organizational Change

• Developing a Sense of Urgency: Essential first step to drive organizational change.

• Attraction-Similarity-Attrition Framework: Describes how organizations maintain culture through selective hiring, development processes, and socialization.

Important Theories

• Theory X: Assumes employees are inherently lazy and need to be closely supervised.

• Boundary Spanners: Individuals who connect one network to another across different organizations, promoting collaboration and communication.

Conflict Resolution

• Log-Rolling: A technique used in negotiations where parties with conflicting outcomes reach an agreement by making concessions on issues of different importance.

• Reservation Prices: The point in negotiation where a party is neither willing to concede nor to accept further offers.

These notes summarize key topics and vocabulary necessary for understanding organizational behavior, particularly in the context of negotiations, team dynamics, and leadership.

What is Power?
Power is the capacity to influence others' actions in order to achieve desired outcomes. It is often evident within organizational settings.

Dependency and Power
Dependency is directly proportional to power. The greater the reliance of an individual or unit on you, the more power you possess over them.

3 Types of Dependency

1. Scarcity

   • Represents the uniqueness of a resource. The more challenging it is to acquire something, the more valuable it generally becomes.

2. Importance

   • Relates to the worth of a resource. If the skills or resources under your control are essential to the organization, your power will increase.

3. Substitutability

   • Concerns the ability to find alternative options that serve the same purpose as those offered. The more difficult it is to locate a substitute, the more dependent a person becomes, thereby increasing the power one has over them.

6 Bases of Power

1. Legitimate

   • Arises from an individual's role or position within the organization.

2. Reward

   • Involves the capacity to bestow rewards such as salary increases, perks, or appealing job assignments. This type often accompanies legitimate power.

3. Coercive

   • The ability to withdraw something or impose penalties for noncompliance.

4. Expert

   • Derives from specialized knowledge and skills.

5. Information

   • Stems from access to specific information, akin to expert power.

6. Referent

   • Originates from the personal attributes of an individual, including the extent to which they are liked, respected, and emulated.

What is Influence?
Influence is the capacity to persuade others to act in ways that align with our desires. To effectively influence in various situations, it's crucial to:

• Broaden your skill set.

• Develop proficiency in multiple techniques.
  The most effective influencers adapt their tactics based on the context of the situation.

Six Influence Tactics

1. Reciprocity: People generally feel compelled to return favors.

2. Commitment and Consistency: Individuals usually strive to honor their commitments.

3. Social Proof: People are inclined to follow actions taken by others.

4. Authority: There is a tendency to comply with figures in positions of authority.

5. Liking: Persuasion is often more effective when it comes from someone we like.

6. Scarcity: Rare items tend to be valued more highly.

Key Takeaways

• Power is influenced by various factors.

• Dependency and the bases of power play a role in influence.

• Influence can be exercised through power, but effectiveness depends on how it's utilized.

Negotiations

Negotiation is the process where two or more parties collaborate to reach an agreement.

Distributive Negotiation

• This traditional approach views the negotiation as a fixed resource that needs to be divided between the parties involved.

BATNA (Best Alternative To a Negotiated Agreement)

• BATNA indicates the level of power one holds in the negotiation. It serves as a benchmark to evaluate any proposed agreement.

ZOPA (Zone Of Possible Agreement)

• ZOPA defines the range formed by the reservation prices of both parties.

• Reservation Price: The highest or lowest point at which a party is willing to negotiate.

• Target Price: The ideal point a party wishes to achieve.

Groups & Teams

Types of Groups

A group is defined as a collection of individuals whose interactions result in mutual impact.

• Informal Work Groups: These are formed by two or more individuals who interact in ways not formally outlined by the organization.

Formal Work Groups
Made up of managers, subordinates, or individuals with close associations that influence group behavior.

Difference Between Groups and Teams
A team is a cohesive coalition of individuals collaborating to achieve mutual goals.

Purpose of Assembling a Team

1. Achieve larger, more complex goals.

2. Address tasks requiring multiple skills from several individuals.

3. Foster increased mutual cooperation.

Team Development Theories

1. Forming-Storming-Norming-Performing-Adjourning

2. Punctuated Equilibrium Model

Forming

• The initial stage when the group meets for the first time.
  "Will I be accepted? What will my role be? Who has more power?"
  Goals:

• Get to know each other.

• Explore group boundaries to identify acceptable behaviors.

Storming

• The stage where participants become less guarded, shedding social facades and becoming more authentic and argumentative.
  "Why should I have to do this? Who designed this project in the first place? Why do I have to listen to you?"
  Goals:

• Express deeper thoughts and feelings.

Norming

• The stage where participants easily establish ground rules and define their operating procedures and goals.
  "How should we proceed? What can we accomplish?"
  Goals:

• Define procedures and objectives.

• Seek help and feedback from each other.

Performing

• The stage when group members achieve their tasks while also paying attention to how work is done.
  "Can we improve our operating procedures? Do we have means for addressing conflicts?"
  Goals:

• Align collaborative efforts towards achieving team goals.

• Foster individual growth among team members.

Adjourning

• The stage when the group separates.
  "How did it all go? What did we learn?"

Punctuated Equilibrium Model
This theory suggests that change within groups occurs in rapid, radical spurts rather than gradually over time; teams remain relatively static, maintaining a certain equilibrium.

Common Knowledge Effect
Information that is shared among members holds more sway over team judgments than unshared information, regardless of the validity of the information.

Consequences

• Common information is discussed for longer durations.

• Unique information is often not given adequate time.

Solutions

• Present all information before individuals vote or express initial preferences.

• Establish norms that encourage openness to differing perspectives.

• Focus on unique information.

• Center the decision-making process on what is best for the team, rather than on having one's choice prevail.

Cohesion
Refers to the camaraderie within the group.
Fundamental Factors

• Similarity

• Stability (longer they are together)

• Size
  Benefits

• Increased satisfaction

• Buffer against stress

• Resourceful strength
  Drawbacks

• Risk of groupthink

• Social loafing

Groupthink
A phenomenon induced by group pressure that leads to the avoidance of critical evaluation of favored ideas; members may become conflict-avoidant.

Overcoming Groupthink

• Establish norms that permit questioning.

• Seek disconfirming evidence.

• Assign a devil’s advocate.

• Bring in a third party for fresh perspectives.

Social Loafing
The tendency for individuals to exert less effort when working in a group context; as group size increases, individual effort generally decreases.
"My own effort will have little effect on the outcome. Others aren't pulling their weight, so why should I? No one will notice anyway."

Overcoming Social Loafing

• Limit the number of individuals in the group: one less person is generally more effective than one more.

• Emphasize task importance: loafing decreases when the team believes their work is highly significant.

• Enhance task identity.

Designing Effective Teams

• Who: Acknowledge individual differences and personality traits.

• How many: Groups larger than 10 can become hard to coordinate.

• Diversity: Greater variety leads to better outcomes.

Key Takeaways

• Team development takes time for smooth operation.

• Teams progress through stages and evolve over time.

• Teams may fail to generate higher quality decisions due to challenges like too much cohesion.

• Be aware of groupthink and social loafing.

Leadership
Leadership is the act of influencing others toward a shared goal.

Formal Leaders: Individuals holding positions of authority who can leverage the power of their roles.
Informal Leaders: Individuals who influence without formal authority.

Leadership and Management

• Manager: Plans, designs, staffs, establishes, and monitors units.

• Leader: Defines direction, motivates team members, promotes unity, and encourages collaboration.

• Effective management requires strong leadership skills.

Four Approaches to Leadership
Trait Approach:
This earliest leadership approach aimed to identify traits distinguishing leaders from non-leaders, focusing on:

• Intelligence: General mental ability and emotional intelligence

• Personality: Characteristics such as extraversion, conscientiousness, and openness

• Self-Efficacy: Related to self-esteem

Limitations:

1. It fails to consider the situational context of leadership.

2. There is little evidence to suggest that effective leaders must possess specific traits.

3. Inconsistencies are found across different leaders.

Behavioral Approach:
Disillusioned with trait research, scholars shifted focus to behaviors exhibited by leaders, categorizing them into two groups:

• Task-Oriented Behaviors: These include structuring subordinates' roles, providing instructions, and enhancing group performance.

Limitations:

1. This approach also neglects the situational context in which these behaviors occur.

Contingency Approach:
Following the behavioral and trait approaches, scholars examined the conditions that dictate the effectiveness of different leadership styles.

Limitations:

1. This approach emphasizes both behaviors and situations, complicating understanding.

2. It's challenging to apply in dynamic, evolving situations.

3. Difficulty arises in coaching or training leaders effectively.

Leadership Approaches:

1. Trait approaches assist in leader selection.

2. Behavioral approaches aid in training leaders.

3. Contingency approaches teach leaders how to adapt.

Contemporary Approach:

1. Transformational Leadership

2. Leader-Member Exchange

3. Servant Leadership

4. Authentic Leadership

Transformational Leaders:
These leaders inspire employees through idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration (the 4 I’s). They leverage charisma, persuasiveness, and personal appeal to inspire change.

Transactional Leaders:
These leaders motivate employees by providing resources in exchange for expected behaviors.

Why is Transformational Leadership Effective?

• Trust: Followers are significantly less likely to trust transactional leaders.

• Employee Satisfaction: Employees tend to be more satisfied under transformational leadership.

• Intrinsic Motivation: Increases among followers are more pronounced.

Leader-Member Exchange (LME):
The LME Theory suggests that the quality of the relationship between leaders and their followers is crucial in understanding leadership influence.

How to Build High LMX:

1. Treat employees fairly.

2. Encourage followers to seek feedback.

Servant Leadership:
This approach defines a leader’s role as serving the needs of others, with the primary mission being the development of employees and helping them achieve personal goals, beyond just organizational objectives.

Authentic Leadership:
This style emphasizes being true to one’s own values and drawing strength from personal history and experiences. It requires leaders to be self-aware and introspective.

Leadership Styles:

• Directive: Best when there is high role ambiguity.

• Participative: Engages team members in decision-making.

• Laissez-Faire: Empowers employees to make their own decisions.

Leadership Myths:

• Charisma is an innate quality.

• Leadership effectiveness differs significantly between genders.

• Only those in formal positions can lead.

Organizational Culture:
This refers to the shared assumptions, values, and beliefs that dictate what is considered appropriate behavior within an organization. Just like individuals, organizations exhibit unique cultures, and the strength of those cultures is determined by the level of agreement among members.

Why Does Strong Organizational Culture Matter?

• It brings employees together.

• Creates a distinct identity.

• Acts as an effective mechanism for controlling employee behavior.

• Influences employee interactions.

Levels of Organizational Culture:

1. Artifacts: Tangible and visible elements of culture such as the physical environment, employee interactions, company policies, and reward systems.

2. Values: Shared principles and standards, such as learning, discovery, freedom, leadership, opportunity, and responsibility.

3. Assumptions: Taken-for-granted beliefs about human nature and reality, e.g., "Students are self-motivated and want to learn."

Do Organizations Have a Single Culture?
Typically, multiple cultures exist within an organization.

• Subculture: Values unique to a limited subset of the organization.

• Counterculture: Values that oppose the broader organizational culture.

Organizational Culture Preferences

1. Control: Cultures that are rule-oriented and bureaucratic.

2. Performance: Cultures that prioritize competitiveness and outperforming rivals.

3. Relationship: Cultures valuing fairness, support, and respect for individual rights.

4. Responsive: Cultures that adapt flexibly and experiment with new ideas.

Founder Values:
Organizational culture is often deeply connected to the founders' personalities, backgrounds, and values, such as in the case of Ben & Jerry’s.

Industry Demands

• Act as a force to create similarities among organizational cultures.

• Example: Insurance and Banking require stability and rules and regulations.

• Industry influence over culture may make it impossible to imitate cultures of companies in different industries.

Attraction-Selection-Attrition

1. Employees are attracted to organizations where they will fit in. Individuals self-select into the companies they work for.

2. Companies also look to select people who will fit into their corporate culture, going through a screening process to avoid person-culture misalignment.

3. Organizations eventually eliminate candidates who do not fit in through attrition.

New Employee Onboarding

• Process through which new employees learn the attitudes, knowledge, skills, and behaviors required to function effectively within an organization.

• Important aspects include having clarity about what is expected, feeling confident in their abilities, and feeling socially accepted by peers. Mentors can be crucial to helping new employees acclimate.

Leadership

• There is a direct correspondence between a leader’s style and an organization's culture.

• Leaders influence culture through role modeling and their reactions to the actions of others.

Reward Systems

• Organizations determine the kinds of behaviors and outcomes to reward and punish (e.g., what behaviors are recognized or ignored).

• Considerations include whether an organization rewards purely goal achievement or emphasizes intangible elements of performance, and whether the evaluation system is absolute or relative.

Disney Organizational Culture

• Artifacts: Mission Statement

• Values: Safety, Courtesy, Show, Efficiency

• Assumptions: Everyone is a child at heart.

The Disney Way

1. Attraction and selection: Personal contracts are crucial in hiring decisions.

2. New Company Onboarding: Intensive training programs for cast members.

3. Leadership: Employees at all ranks are managed by higher-ranking employees.

4. Reward Systems: Placement within the theme park is a symbol of status.

• Disney’s culture itself serves as a competitive advantage; people want to be part of the magic, but it's not for everyone.

Organizational Structure

• Refers to how individuals and teams within an organization are coordinated.

• Centralization: The degree to which decision-making authority is concentrated at higher levels. Centralized companies have multiple management layers; decentralized companies have fewer layers.

• Advantages and disadvantages of each structure type affect efficiency, creativity, and decision-making.

Formalization

• The degree to which policies, procedures, job descriptions, and rules are written and explicitly articulated.

• Advantages include predictability and consistency in employee behavior, while disadvantages may involve reduced innovativeness, motivation, and job satisfaction.

Departmentalization

• Functional structures group jobs based on similarity in functions.

• Divisional structures group jobs based on products, services, or geographic locations.

• Many structures are hybrid, combining functional and divisional elements.

Organizational Configurations

• Bureaucratic structures: High centralization and formalization, clear division of labor, often resist change.

• Organic structures: Low centralization and formalization; roles are loosely defined, allowing for entrepreneurial behavior and innovativeness.

Why Do Organizations Change?

• Organizational change is the movement from one state of affairs to another and can take many forms.

Why Do People Resist Change?

1. Disrupted Habits: Change can disrupt familiar habits and patterns; outspokenness may occur even with simple changes.

2. Personality: Those with a positive self-concept cope better with change.

3. Feelings of Uncertainty: Unclear futures can create stress and a sense of lost control.

4. Fear of Failure: Changes may impact job security and power dynamics, particularly for high-status individuals.

Planning Organizational Change

1. Develop a sense of urgency: People are more likely to accept change if they feel a need for it.

2. Build a coalition: Enlist the right people instead of trying to get everyone on board.

3. Create a vision: Provide an exciting picture of a future that employees would want to be part of.

Executing Organizational Change

1. Eliminate obstacles to change: Identify resistance sources and create integrative solutions.

2. Create small wins: Success along the way enhances inspiration and motivation.

3. Build on change: Use momentum for further change.

4. Make change part of culture: Ensure change is reflected in mission statements, values, and reward systems.

Key Takeaways:

• The building blocks of structure determine ultimate configurations.

• Key factors include centralization and formalization.