Chapter 1 Introduction to Organizational Behavior Organizational behavior the actions of individuals and groups in an organizational context Strategic OB Approach an approach that involves organizing and managing people s knowledge and skills effectively to implement the organization s strategy and gain a competitive advantage People are the foundation of an organization s competitive advantage Organization a collection of individuals forming a coordinated system of specialized activities for the purpose of achieving certain goals over some extended period of time The nature of human capital intangible resources including the reputation of the organization trust between managers and associates knowledge and skills of associates organizational culture brand name and relationships with customers and suppliers are the organization s nonphysical economic assets that provide value Human capital is a critical intangible resource Human capital the sum of the skills knowledge and general attributes of the people in an organization Human capital doesn t depreciate in value as it is used Knowledge plays a key role in gaining and sustaining an advantage over competitors Firms that have greater knowledge about their customers markets technologies competitors and themselves can use this knowledge to gain a competitive advantage A competitive advantage results when an organization can perform some aspect of its work better than competitors or when it can perform the work in a way that competitors cannot duplicate Human capital value can be defined as the extent to which individuals are capable of producing work that supports an organization s strategy for competing in the marketplace For example top managers are generally highly valuable resources for the firm Their human capital as perceived by investors coupled with the strategic decisions that they make affect the investors decisions of whether to invest in the firm Human capital rareness the extent to which the skills and talents of an organization s people are unique to the industry Imitability the extent to which the skills and talents of an organization s people can be copied by other organizations The least imitable skills and talents are usually those that are complex and learned inside a particular organization Typically these skills involve tactic knowledge a type of knowledge that people have but cannot articulate Sustainable competitive advantage through people depends not only on the skills and talents of those people but also on how they are treated and deployed High involvement management requires that senior middle and lower level management all recognize human capital as the organization s most important resource High involvement management approach involves carefully selecting and training associates and giving them significant decision making power information and incentive compensation Empowerment can increase the likelihood that associates will provide maximum effort in their work including a willingness to 1 work hard to serve the organizations best interests 2 take on different tasks and gain skills needed to work in multiple capacities and 3 work using their intellect as well as their hands Selective hiring another important part of the selection process involves examining applicant s fit with the organization s culture and mission selecting new hires solely on the basis of technical skills is a mistake Extensive training new hires cannot be expected to perform adequately Socialization into the norms of the organization is an important part of the initial training Decision power providing associates with the authority to make some important decisions while inviting them to influence other decisions Self managed or self directed teams are a central part of most high involvement systems Empowering associates enhances knowledge sharing within and the efficacy of teams that in turn increased performance Information sharing in order for associates to make effective decisions and provide useful inputs to decisions made by managers they must be properly informed Incentive compensation executives indicated that incentive pay positively affected productivity and competitiveness An organization is characterized by these features Network of individuals System Coordinated activities Division of labor Goal orientation Continuity over time regardless of change in individual membership Diversity can be defined as a characteristic of a group of people where differences exist on one or more relevant dimensions such as gender Notice that diversity is a group characteristic not an individual one Any characteristic that would influence a person s identity or the way he or she approaches problems and views the world can be important to consider when defining diversity Affirmative Action Programs AAPs are specific measures an organization takes to remedy and or prevent discrimination AAPs do not require that specific hiring quotas be implemented which may be illegal or that standards for selection and promotion be lowered Also AAPs usually provide temporary action once women and minorities are appropriately represented in an organization the AAP with the exception of monitoring is no longer necessary Diversity management programs address diversity on many dimensions They are often meant to change the organizational culture to be more inclusive and to enable and empower all associates In addition they focus on developing people s ability to work together Chapter 2 Diversity A multicultural organization is one in which the organizational culture fosters and values differences Because of the effective management of diversity there is little intergroup conflict Plural organizations have diverse workforces and take steps to be inclusive and respectful of people from different backgrounds However diversity is tolerated rather than valued and fostered We would expect more intergroup conflict in plural organizations than in multicultural organizations because diversity is not proactively managed Monolithic organizations are homogeneous These organizations tend to have extreme occupational segregation with minority group members holding low status jobs They actively discourage diversity thus anyone who is different from the majority receives heavy pressure to conform Social identity a person s knowledge that he belongs to certain social groups where belonging to those groups has emotional significance A person s social identity becomes more
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