Introduction to the Field of Organizational Behaviour

Chapter 1 Introduction to the Field of Organizational Behaviour

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Introduction to the Field of Organizational BehavioUr

Learning Objectives

After reading this chapter, students should be able to:

Define organizational behaviour and give three reasons for studying this field of inquiry.

Discuss how globalization influences organizational behaviour.

Summarize the apparent benefits and challenges of telework.

Identify changes in Canada’s work force in recent years.

Describe employability and contingent work.

Explain why values have gained importance in organizations.

Define corporate social responsibility and argue for or against its application in organizations.

Identify the five anchors on which organizational behaviour is based.

Diagram an organization from an open systems view.

Define knowledge management and intellectual capital.

Identify specific ways that organizations acquire and share knowledge.

Chapter Glossary

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Chapter 1 Introduction to the Field of Organizational Behaviour

communities of practice Informal groups bound together by shared expertise and passion for a particular activity or interest.

contingency approach The idea that a particular action may have different consequences in different situations.

contingent work Any job in which the individual does not have an explicit or implicit contract for long-term employment, or one in which the minimum hours of work can vary in a nonsystematic way.

corporate social responsibility (CSR) An organization’s moral obligation towards its stakeholders.

employability An employment relationship in which people are expected to continually develop their skills to remain employed.

ethics The study of moral principles or values that determine whether actions are right or wrong and outcomes are good or bad.

globalization When an organization extends its activities to other parts of the world, actively participating in other markets, and competing against organizations located in other countries.

grafting The process of acquiring knowledge by hiring individuals or buying entire companies.

grounded theory A process adopted in most qualitative research of developing knowledge through the constant interplay of data collection, analysis, and theory development.

intellectual capital The sum of an organization’s human capital, structural capital, and relationship capital.

knowledge management Any structured activity that improves an organization’s capacity to acquire, share, and use knowledge in ways that improve its survival and success.

open systems Organizations that take their sustenance from the environment and, in turn, affect that environment through their output.

organizational behaviour (OB) The study of what people think, feel, and do in and around organizations.

organizational culture The basic pattern of shared assumptions, values, and beliefs governing the way employees within an organization think about and act on problems and opportunities.

organizational learning The knowledge management process in which organizations acquire, share, and use knowledge to succeed.

organizational memory The storage and preservation of intellectual capital.

organizations Groups of people who work interdependently toward some purpose.

scientific method A set of principles and procedures that help researchers to systematically understand previously unexplained events and conditions.

stakeholders Shareholders, customers, suppliers, governments, and any other groups with a vested interest in the organization.

teleworking Working from home, usually with a computer connection to the office; also called telecommuting

values Stable, long-lasting beliefs about what is important in a variety of situations.

virtual teams Teams whose members operate across space, time, and organizational boundaries and linked through information technologies to achieve organizational tasks.

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Chapter 1 Introduction to the Field of Organizational Behaviour

Chapter Synopsis

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Chapter 1 Introduction to the Field of Organizational Behaviour

Organizational behaviour is a relatively young field of inquiry that studies what people think, feel, and do in and around organizations. Organizations are groups of people who work interdependently toward some purpose. OB concepts help us to predict and understand organizational events, adopt more accurate theories of reality, and influence organizational events. This field of knowledge also improves the organization’s financial health.

There are several trends in organizational behaviour. Globalization requires corporate decision makers to be more sensitive to cultural differences, and seems to be associated with the recent rise in job insecurity, work intensification, and other sources of work-related stress. Information technology blurs the temporal and spatial boundaries between individuals and the organizations that employ them. It has contributed to the growth of telework -- an alternative work arrangement where employees work at home or a remote site, usually with a computer connection to the office. Information technology is also a vital ingredient in virtual teams -- cross-functional groups that operate across space, time, and organizational boundaries.

Another trend in organizations is the increasingly diverse workforce. Diversity potentially improves decision making, team performance, and customer service, but it also presents new challenges. A fourth trend is the employment relationships that have emerged from the changing work force, information technology, and globalization forces. Employment relationship trends include employability and contingent work. Values and ethics represent the fifth trend. In particular, companies are learning to apply values in a global environment, and are under pressure to abide by ethical values and higher standards of corporate social responsibility.

Organizational behaviour scholars rely on a set of basic beliefs to study organizations. These anchors include beliefs that OB knowledge should be multidisciplinary and based on systematic research, that organizational events usually have contingencies, that organizational behaviour can be viewed from three levels of analysis (individual, team, and organization), and that organizations are open systems.

The open systems anchor suggests that organizations have interdependent parts that work together to continually monitor and transact with the external environment. They acquire resources from the environment, transform them through technology, and return outputs to the environment. The external environment consists of the natural and social conditions outside the organization. External environments are generally much more turbulent today, so organizations must become adaptable and responsive.

Knowledge management develops an organization’s capacity to acquire, share, and use knowledge in ways that improves its survival and success. Intellectual capital is knowledge that resides in an organization, including its human capital, structural capital, and relationship capital. It is a firm’s main source of competitive advantage. Organizations acquire knowledge through grafting, individual learning, and experimentation. Knowledge sharing occurs mainly through various forms of communication. Knowledge sharing includes communities of practice, networks where people share their expertise and passion for a particular activity or interest. Knowledge use occurs when employees realize that the knowledge is available and that they have enough freedom to apply it. Organizational memory refers to the storage and preservation of intellectual capital.

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Chapter 1 Introduction to the Field of Organizational Behaviour

PowerPoint® Slides

Canadian Organizational Behaviour includes a complete set of Microsoft PowerPoint® files for each chapter. (Please contact your McGraw-Hill Ryerson representative to find out how instructors can receive these files.) In the lecture outline that follows, a thumbnail illustration of each PowerPoint slide for this chapter is placed beside the corresponding lecture material. The slide number helps you to see your location in the slide show sequence and to skip slides that you don’t want to show to the class. (To jump ahead or back to a particular slide, just type the slide number and hit the Enter or Return key.) The transparency masters for this chapter are very similar to the PowerPoint files.

Lecture Outline (with PowerPoint® slides)

Introduction to the Field of Organizational Behaviour
Slide 1
Four Seasons and OB
Slide 2
What are Organizations?
Slide 3 /

Introduction to the Field of Organizational Behaviour

Opening Vignette

Four Seasons Hotels and Resorts have leveraged the power of organizational behaviour to become one of the top luxury hotels in the world as well as one of the best places to work.

• CEO Isadore Sharp emphasizes the importance of relying on the creativity of its staff and maintaining a culture that supports employee involvement.

• Four Seasons pays close attention to employee competencies, corporate culture, leadership, communication, motivation, organizational structure

The Field of Organizational Behaviour

Organizational behaviour (OB) -- study of what people think, feel, and do in and around organizations.

Organizations -- groups of people who work interdependently toward some purpose

• Structured patterns of interaction -- expect each other to complete certain tasks in a coordinated way

• Organizations have purpose -- e.g. producing oil from oil sands or selling books on the Internet.

Why Study OB?
Slide 4
Trends:Globalization
Slide 5
Trends: Information Technology
Slide 6 /

Why Study Organizational Behaviour?

1. Satisfy the need to understand and predict

• Helps us figure out why organizational events happen

2. Helps us to test personal theories

• Helps to question and rebuild personal theories

3. Influence our environment

• Improves our ability to work with people and influence organizational events

Emerging Trends in Organizational Behaviour

1. Globalization

• SAP, the German software giant and others operate in a global economy

-- activities in other parts of the world, participates in other markets, competes against organizations located elsewhere

• Requires new organizational structures and different forms of communication

• Adds more diversity to the workforce.

• Increases competitive pressures, mergers, work intensification and demands for work flexibility from employees.

2. Information Technology & OB

• Re-designs jobs, facilitates competitive advantage through knowledge management.

• Telework (telecommuting) –alternative work arrangement

-- working from home, usually with a computer connection to the office

-- need to replace face time with performance output

-- changes employment relationship expectations

• Virtual teams

-- operate across space, time, and organizational boundaries with members who communicate mainly through electronic technologies

Trends: Workforce Diversity
Slide 7
Trends:Employment Relationship
Slide 8
Employability vs Job Security
Slide 9
Trends: Workplace Values & Ethics
Slide 10 /

3. Changing Work Force

• More diversity

-- primary categories – gender, age, ethnicity, etc.

-- secondary categories -- some control over (eg. education, marital status)

-- more women in workforce

-- new age cohorts (eg. Generation-X, Generation Y)

• Implications

-- leverage diversity advantage (e.g. decision making, provide better customer service).

-- adjust to the new workforce -- e.g. Gen-X employees value flexibility and opportunities to use new technology; Gen-Y employees expect responsibility and involvement.

4. Emerging employment relationships

• Employability

-- many tasks, not a specific job

-- need to continuously learn skills

• Contingent work

-- no explicit or implicit contract for long-term employment, or minimum hours of work can vary in a nonsystematic way

5. Workplace Values and Ethics

• Values – stable, long-lasting beliefs about what is important.

• Ethics -- the study of moral principles or values that determine whether actions are right or wrong and outcomes are good or bad

Corporate Social Responsibility
Slide 11
Org. Behaviour Anchors
Slide 12 /

CORPORATE SOCIAL RESPONSIBILITY (CSR)

• Corporate social responsibility -- an organization’s moral obligation toward all of its stakeholders

• Stakeholders -- shareholders, customers, suppliers, governments, and any other groups with a vested interest in the organization

• Triple bottom line

-- part of corporate social responsibility

-- supporting economic, social, and environmental spheres of sustainability

• Various stakeholders (job applicants, current employees, and suppliers) associate with firms based on their CSR

• Many firms talk about their CSR, but few practise CSR or have their actions evaluated

Five Anchors of Organizational Behaviour

1. Multidisciplinary anchor

• Many OB concepts adopted from other disciplines

-- e.g. psychology concepts in motivation, perceptions

-- emerging fields: communication, information systems, marketing, womens’ studies

• OB is developing its own models and theories, but needs to continue scanning other fields for ideas.

2. Systematic research anchor

• OB researchers rely on scientific method -- a set of principles and procedures that help researchers systematically understand previously unexplained events and conditions.

• OB also adopting a grounded theory approach – dynamic and cyclical approach that provides constant interplay between data gathering and developing theoretical concepts.

3. Contingency anchor

• A particular action may have different consequences in different situations -- no single solution is best in all circumstances

• Need to diagnose the situation and select best strategy under those conditions

• Universal theories welcomed where contingency theories offer little advantage

4. Multiple levels of analysis anchor

• OB issues can be studied from individual, team, and/or organizational level

• Topics identified at one level, but usually relate to all three levels

Open Systems Anchor of OB (build)
Slide 13 /

5. Open systems anchor

• Open systems -- organizations consist of interdependent parts that work together to continually monitor and transact with the external environment

• Receives inputs and transforms them through technology into outputs that are returned to the external environment

• Some output valued (services), but other output have adverse effects (eg., layoffs, pollution)

• External environment -- natural and social conditions outside the organization

-- stakeholders – anyone with a vested interest in the organization

-- environment is increasingly turbulent – rapid change

• Organizations need to adapt to external environment

• Need to coordinate subsystems and be aware of unintended consequences

Knowledge Management Defined
Slide 14
Intellectual Capital
Slide 15
Knowledge Management at Clarica
Slides 16
Knowledge Management Processes
Slides 17 /

Knowledge Management

Any structured activity that improves an organization’s capacity to acquire, share, and use knowledge for its survival and success

Intellectual capital

• Knowledge residing in the organization

-- sum of its human, structural, and relationship capital

1. Human capital -- employees possess and generate

2. Structural capital -- captured in systems and structures

3. Relationship capital -- value derived from external stakeholders (eg., customer loyalty)

Knowledge Management Processes

Knowledge management at Clarica Life Insurance Company

• Clarica Life Insurance Company uses its company-wide Intranet (called Clarica Connects) to help agents develop and share their expertise in ways that generate innovative solutions.

1. Knowledge acquisition -- organization's ability to extract information and ideas from its environment as well as through insight