Chapter 1: What is Organizational Behavior?

Being a good manager requires strong interpersonal skills, as communication is

crucial, as one must manage different types of resources: people, money, and time in
order to achieve specific goals.
A Manager’s Four Main Functions
Planning function refers to setting goals, creating strategies, and preparation of plans
that make different activities work coherently and effectively.
Organising function concerns tasks identification and division, assignment of tasks to
individuals, setting reporting and decision- making systems.
Leading function relates to motivating workers and directing others’ actions, choosing
communication canals and solving conflicts.
Controlling function refers to controlling others’ work outcomes and checking
whether everything is being done as planned; and when necessary undertaking
corrective actions.

DESCRIPTION
ROLE

Interpersonal
Roles which involve ceremonial/symbolic duties

Figurehead Symbolic head, needs to perform duties of social/legal nature

Leader Motivates and directs employees

Liaison Maintains a network of outside contacts

Informational
Collection and dissemination of information

Receives information, serves as nerve centre of internal and external

Monitor
information

Disseminator Transmits information from outsiders to the organisation’s members

Spokesperson Transmits information about the organisation to outside parties

 Decisional
Refers to making choices

Analyses the organisation and its environment for opportunities and

Entrepreneur
initiates projects to bring about change

Disturbance
Undertakes corrective actions in case of problems
handler

Resource
Makes or approves important organizational decisions
allocator

Negotiator Represents the organization in negotiations

Management roles
They can be divided into 3 main categories: interpersonal roles, informational roles and
decisional roles. The concept was developed by Henry Mintzberg and is
called Mintzberg’s Managerial Roles (below).
Management skills
There are 3 types of management skills developed by Robert Katz: Technical
skills (application of specialised knowledge, know-how, e.g. think of mechanical
engineer, vet, pharmacist), human skills (easiness to work in a team, understand others’
behaviors and motives, stimulate others’ actions, ability to communicate and get along
with people), conceptual skills (mental capability to analyse problems, manage
complexity of an issue, decide on solutions and evaluation of possibilities).
Effective or successful managers?
It was investigated in Luthans’ Study of Managerial Activities that effective managers
spend most of their time on communication activities (44%) and on human resource
management activities (26%). In contrast, successful managers spend almost half of their
working time on networking activities (48%) and communication activities (28%). It is
understandable that average managers work most of the time on traditional
management (32%) and on communication activities (29%).
Defining Organisation Behavior (OB)
“A field of study that investigates the impact that individuals, groups, and structures
have on behavior within organisations, for the purpose of applying such knowledge
toward improving an organization’s effectiveness” (Robbins, Judge “Organisational
Behavior”).
It is important to remember that OB deals with 3 levels of behaviors: individuals, groups
and structures. Knowledge about those 3 types of behaviors is necessary to apply actions
which make the whole organization function successfully.
How to study OB? EBM
In OB systematic study and evidence-based management is combined with intuition.
Behavior can be predicted. If it is examined on the continuous basis one is able to
forecast how people can act in particular circumstances (that is why systematic study of
people’s actions are necessary). Systematic study involves examining causes and effects,
just like in science – this is done to make general law-like conclusions based on gathered
data. What is closely related to systematic study is evidence-based management (EBM).
EBM implies making managerial decision after consideration of scientific facts, data,
conclusions, laws. Managers who apply EBM act like scientists – when they face a
problem, they search for scientific information which can give them possible problem
solutions, then they apply the most relevant knowledge in order to solve an issue. Of
course, intuition is inseparable from decision-making process. Nevertheless, importance
of systematic study and thus EBM cannot be questioned.
What major behavioral disciplines contribute to OB?
- Psychology (studies behavior of individual)
- Social psychology (studies behavior of individual within a group)
- Sociology (studies groups, societies, organisational systems, how individual acts in
relation to a society)
- Anthropology (studies societies, groups, cultures, organisational systems)
Absolutes in OB
OB concepts, however law-like they can be, must take into account situational factors.
Under different conditions different individuals act differently. That is why there only a
few absolutes in OB. Because people are different and complex, one needs to consider
OB in a contingency framework.
Challenges and opportunities for OB
I) Globalisation implications
Ia) More foreign assignments
Ib) Multicultural work environment
Ic) Coping with anticapitalism backlash – values and norms, even the economical
ones, are not the same everywhere
 Id) Placing more and more jobs, productions in low-cost labour countries (e.g.
China, Taiwan) – managers need to find a balance between organization’s interest
in low cost and (corporate) social responsibility.
Ie) Managing people during War on Terror – e.g. people resign from some
businesses, cancel flights because they are afraid of terrorism.
II) Managing work diversity
IIa) Embracing diversity – employees from diverse countries do not give up their
cultural values and norms to adapt to the rest of society. Managers need to make
them accommodate so they don’t feel isolated or ignored
IIb) Changing U.S. demographics
IIc) Implications – Effective managers need to recognize cultural differences and
can’t apply the same standards to all employees.
III) Improving quality and productivity
IV) Improving customer service
V) Improving people skills
VI) Stimulating innovation and change
VII) Coping with “temporariness”
VIII) Working in networked organizations
IX) Helping employees balance work-life conflicts
X) Creating a positive work surrounding – in this point the notion of positive
organizational scholarship needs to be mentioned – it is research area that focuses on
fostering strengths rather than eliminating weaknesses. It is all about what is good, the
best in employees and the organization itself.
XI) Improving ethical behavior
OB Models
> Dependent variables: productivity, absenteeism, turnover, job satisfaction, deviant
workplace
behavior (antisocial behavior or workplace incivility), organizational citizenship
behavior
> Independent variables:
individual-level variables – motivation, perception, ability, values and attitudes,
personality and emotions, individual decision-making and learning, biographical
characteristics
group-level variables – conflict, communication, group decision making, leadership and
trust, group structure, conflict, power and politics, work teams
organisation system-level variables – organizational culture, organization structure and
design, human resource policies and practices.

Chapter 2: Foundations of Individual Behavior

Abilities
There are 2 major types of abilities.
Intellectual abilities – capacity to perform mental tasks. There are a few dimensions of
Intellectual ability: number aptitude, verbal comprehension, perceptual speed, inductive
reasoning, deductive reasoning, spatial visualization, memory.
Moreover, the notion of general mental ability (GMA) appears – it is an overall aspect of
intelligence. Intelligence and job satisfaction do not relate to each other.
Physical abilities – needed to perform physical tasks. There are nine basic physical
abilities grouped in 3 categories: strength factors (dynamic strength, trunk strength,
static strength, explosive strength), flexibility factors (extent flexibility, dynamic
flexibility) and other factors (body coordination, balance, stamina).

Biographical characteristics
> age and relationship between variables:
1) turnover: the older a person gets, it is less probable that he/she will quit a job.
2) absenteeism: older employees have lower rates of voluntary absenteeism, but higher
on involuntary (unavoidable) one (due to health problems).
3) productivity: age and productivity are not related.
4) job satisfaction: mixed evidence. Generally, satisfaction increases with age in
professional job types and decreases with age in nonprofessional.
> gender – main difference between females and males refers to working hours. Women
prefer more flexible working times and are more often absent at work than men.
> race and relationships:
1) people positively discriminate individuals of the same race as themselves (pay them
more, promote and award more often)
2) different approach of black and white race toward affirmative actions
3) African Americans perform worse in employment assessments/decisions

> tenure and relationships:

1) productivity: positive correlation between productivity and tenure
2) job satisfaction: positive correlation between job satisfaction and tenure
2) absenteeism: negative correlation between absenteeism and tenure (seniority)
3) turnover: the longer a person works in a company, the less probable that he will qui
> religion
Religious discrimination can lead to more health problems, absence and turnover.
Learning
Learning is a process, brings changes in behavior, based on experience.
There are 3 main theories of learning.
A) Classical conditioning
Theory based on the concept that unconditioned stimulus causes unconditioned
response and that conditioned stimuli cause conditioned response. It is based on
building connection between conditioned and unconditioned stimulus. Example:
Pavlov’s experiment with dog
B) Operant conditioning
Theory based on idea that one behaves to achieve what he wants or to avoid what he
doesn’t want. Reward after the desired and deliberate behavior occurs is the
reinforcement. The elimination of punishment in case of lack of desired and deliberate
behavior is also reinforcement. Those two methods reinforce achievement of desired
response, effect, equal behavior. The theory of operant conditioning is a part of
behaviorism concept which argues that people react to stimuli not associating them
consciously with response. We act in response to stimuli, but all process takes place on
unconscious level.
C) Social learning
People learn by observation others as well as they learn through experience, “on
mistakes”. There are 4 models of social learning:
1. attentional process – people learn from people they pay attention to due to their vital
characteristics
2. retention process – depends on how well one remembers someone’s behavior when
he/she is no longer close, visible, available
3. motor reproduction process – new behavior is a consequence of observation, one
copies behavior of another
4. reinforcement process – one performs desired behavior if he is encouraged to do so by
rewarding.
Managerial tool
Managers shape behavior of employees, meaning that the change of behavior happens in
steps, and each step is reinforced. There are 4 main shaping behavior methods:
 positive reinforcement,
 negative reinforcement,
 punishment
 extinction
Positive reinforcement refers to rewarding desired behavior, negative refers to
elimination of something unpleasant, not wanted when a behavior occurs. Punishment
causes unpleasant condition when one doesn’t behave in a desired way. Extinction
means not applying any reinforcement and waiting until particular behavior extincts,
disappears.
Those reinforcements can happen on continuous or intermittent basis. Desired
behavior is reinforced each time continuous reinforcement is performed. Intermittent
reinforcement occurs when reinforcement is not regular, but it happens enough often to
make one behave in a desired way repeatedly.

When it comes to reinforcement schedules, the concept goes further beyond

continuous or intermittent models. One distinguishes 4 time schedules:
 fixed-interval schedule
  variable-interval schedule
 fixed-ratio schedule
 variable-ratio schedule.
We are talking about fixed-interval schedule when reinforcement is applied after a
particular period of time (e.g. salaries). When reinforcement happens on irregular time
basis we are referring to fixed-interval schedule (e.g. class tests in high schools, money
bonuses). Fixed-ration schedule tells us that reinforcement happens always after a
certain and constant amount of desired behaviors is performed (e.g. pupil is not praised
each time he gets A, but he is praised after he gets 10 As, and then 20 As,and so on).
Variable-ratio schedule is the opposite. One is rewarded on unpredictable basis; each
time after different amount of desired behaviors occurs. In general, variable schedules
are more effective than fixed.
OB Mod means the application of reinforcement methods described above to people in
their working environment. This happens in 5 steps:
 Identification of problematic behavior
 Collecting data
 Identification of a response’s consequences
 Setting up and executing a strategic plan
 Measuring improvement

Chapter 3: Attitudes and Job Satisfaction

Attitudes

Attitudes are evaluations, judgments, opinions about people/objects/states/events.

There are 3 main components of attitudes:

 cognitive
 affective
 behavioral

Cognitive refers to just describing things how we see them, e.g. “I have a job”. Affective is
related to emotions and feelings, e.g. when one says: “I am so happy with my job”.
Behavioral refers to intentions, actions, e.g. when one says “I will never resign from my
job” or “I am looking for another job”. All components are related, cognitive and affective
aspects of attitudes are inseparable. As one sees attitudes and behaviors are connected,
certain attitude leads always/sometimes/often/never to certain behavior.
At this point, the notion of cognitive dissonance appears – it is the reverse effect – when
attitude follows behavior. It is explained as inconsistency between attitudes or between
behavior and attitude (e.g. advising others to drive slowly when you drive fast yourself).
What influences dissonance is: its importance, influence of one’s values, rewards of
dissonance.

Major Job Attitudes

 Job satisfaction: a positive feeling about one’s job according to an evaluation of its
characteristics.

 Job involvement (level of identification with the job, caring for and participation in
it and considering it as important for “self”).

Another notion in this part is psychological empowerment – it expresses the belief in the
level of one’s influence on his work setting, abilities, his work importance and locus of
control.

 Organisational commitment (employee’s identification with the company’s goals,

corporate culture, strategy, mission, values, vision and willingness to preserve his
belonging to the organization)

Affective – emotional connection with the company and its values

Continuance – perceived financial benefit resulting from staying rather leaving a

firm/company

Normative – feeling obliged to stay in a company because of moral/ethical matters

 Perceived organisational support (POS) – level of employee’s conviction and belief

that the organisation supports him, appreciates his work and cares for his comfort,
security, and happiness.

 Employee engagement – employee’s enthusiasm for the work he does, satisfaction

with it and his commitment to his work.

Job satisfaction

Job satisfaction can be measured in two ways:

 Single global rating method (survey participants answer one question: How
satisfied are you with your job?)
  Summary of job facets (makes an employee evaluate each element of a job),
possible facets can be salary, communication with co- workers and with
supervisor, amount of days off, etc.

The first, “one-question” method is fast and inexpensive. The second one (summary of
job facets) is more accurate, allows the identification of the core problems and makes it
easier to create possible solutions.

What makes employees satisfied with their job?

 The fact that they enjoy their work

 Interesting jobs that provide training, variety, independence and control
 Most people prefer challenging over easy and various over routine

In general, most of the time is the nature of job that makes one satisfied with work.
However, also personality is an important factor influencing job satisfaction. It is
essential to have positive core self-evaluations (which are one’s evaluations of his
possibilities, abilities, and strengths).

Once a person achieves a level of payment that allows for him comfortable living, the
relationship between pay and job satisfaction does not exist any longer.

There are 4 responses to dissatisfaction:

1. Exit – behavior indicating the will to leave the organisation

2. Voice – results in actively and constructively trying to change dissatisfying
conditions
3. Loyalty – waiting passively hoping for situation improvement
4. Neglect – doing nothing, letting the conditions worsen

Relationships between job satisfaction variables:

 Job satisfaction and job performance  strong positive relation -> more satisfied
workers are more productive
 Moderate relation between job satisfaction and organizational citizenship behavior
-> more satisfied workers more probable that they engage in OCB
 Satisfied workers enhance customer satisfaction and loyalty
 Satisfied workers are less likely to miss work (moderate relation)
 Satisfied workers are less likely to quit (strong relation)
 Job dissatisfaction is much likely to cause workplace deviance
 Managers usually overestimate job satisfaction but do not actually measure it.
Chapter 4: Emotions and moods
Affects

Also referred to as the experience of different feelings, can be divided into emotions and
moods.

Emotions

Are more intense and have a contextual stimulus (they are caused by a person, situation,
action, event); they usually last for seconds/minutes. Emotions: most of researches have
agreed that there are 6 basic emotions: happiness-surprise-fear-sadness-anger-disgust.

Emotions are critical to rational thinking because they provide us with information
regarding our comprehension of surrounding world. There are few functions of
emotions. First set of functions is based on the concept if evolutionary psychology – it is
concept which states that people need to experience emotions since they have a purpose.
It is based on Darwin’s theory that emotions help solve problems. There are researches
who question evolutionary psychology because it may not be valid in case of all emotions
(e.g. fear).

Moods

Are less intense and lack situational stimulus. Are usually not felt towards people and
last longer than emotions. Moods are more cognitive while emotions are more
behavioral (can lead us to action). Moods and emotions can influence each other.
Emotion, if it is deep and lasting, and turn into mood.

Moods can be of negative or positive affect. Positive affect is a set of moods consisting of
positive emotions, we distinguish high positive emotions: excitement, self-assurance,
cheerfulness and low positive emotions: boredom, sluggishness and tiredness. Negative
affect is a set of moods consisting of negative emotions, we distinguish high negative
emotions: nervousness, stress and anxiety and low negative emotions: relaxation,
tranquility and poise. Moreover, exists something like positivity offset what means that
most of people experience slightly positive mood when nothing special is happening.

Sources of emotions/moods

 Personality – people have tendencies to experience some moods/emotions/

Moreover, people also differ in how intense they experience emotions. This last
concept is called affect intensity
  Time – worst moods early in the week, best moods late in the week. Most positive
emotions at mid-point between waking and sleeping, negative emotions highest in
the morning and later average
 Weather – weather has little influence on mood. What happens on the cultural
level in the society is illusory correlation (people think that nicer whether makes
them feel better) – it occurs when people associate some events when in reality
there’s no link between them
 Stress – stress negatively influence moods/emotions
 Social life – social activities make people experience positive emotions and also
people experiencing positive emotions seek social activities
 Sleep – poor sleep equals negative emotions (at work reduces job satisfaction).
 Exercise – sport increase positive moods
 Age – negative emotions occur less and less with age. With age, we are more
emotionally wise
 Gender – women are more emotionally expressive than men due to differences in
socialization

Emotional labour

Emotional labour is form of emotional regulation in which workers are expected to

display certain emotions as part of their job, and to promote organizational goals. The
intended effects of these emotional displays are on other, targeted people, who can be
clients, customers, subordinates or co-workers. What happens sometimes is emotional
dissonance (showing one emotion while experiencing another), it is often a difference
between felt emotion and displayed emotion (displayed emotions/regulations are
organisationally required and claimed as appropriate in a particular job).

Employees can show displayed emotions by:

1. Surface acting - "painting on" affective displays, or faking; Surface acting involves
an employee's presenting emotions on his or her "surface" without actually feeling
them. Is more stressful than deep acting
2. Deep acting - attempt to change one’s inner feeling to match emotion expressions
that an organization requires (that is displayed emotions).

Affective events theory

Model developed to identify how emotions and moods influence job performance and
job satisfaction. The model increases understanding of links between employees and
their emotional reaction to things that happen to them at work.
Look at the appendix for the model.

Hypothesis:

1. Emotions affect different job satisfaction and job performance dimensions, such as
organizational citizenship, organizational commitment, workplace deviance, level
of effort and intention to quit.
2. Emotional episode is actually a series of emotional experiences precipitated by a
single event.
3. Current emotions always influence job satisfaction, also past emotions about the
event influence the job satisfaction.
4. Since emotions/moods vary over time, their influence on performance varies.
5. Emotion-caused behaviors are rather short lasting and of high variability.
6. Emotions, even the positive ones, have negative influence on job performance.
7. Emotions provide valuable insight into understanding employees’ behaviors.
8. Employees and managers cannot ignore emotions and events that influence them.

Emotional intelligence

EI is the self-perceived ability to identify, assess, and manage the emotions or emotional
cues of one's self, of others, and of groups. It is a controversial concept in OB.

PROS EI CONS EI

Intuitive appeal Too vague for a concept

Predicts criteria that matter – High EI

claimed to correlate to a better job Can’t be measured
performance

EI is biologically based Suspect validity

OB applications of moods and emotions

Selection -> More and more employers use EI tests when hiring.

Decision making -> Moods/emotions have an important influence on decision- making.

Positive ones improve decision- making and problem- solving. Depression undermines
performance.
Creativity -> Good moods contribute to creativity.

Motivation -> Organisations that promote positive moods are likely to have more
motivated employees, thus there is a positive correlation between positive mood and
higher motivation

Leadership -> Leaders usually are and should display emotions, like excitement,
enthusiasm, etc… This is critical in persuading people/employees to new idea, strategy,
vision.

Negotiation -> Moods and emotions may hamper negotiations. Displaying negative
emotion may be effective, but feeling of poor performance may hinder future
cooperation.

Customer Service -> sometimes employees experience emotional dissonance. Moreover,

what employees feel may transfer to customers. It is called emotional contagion –
“catching” or copying emotions from others.

Job attitudes -> People who had good day at work, usually are in good mood when
coming back home that day and the same refers to bad day at work.

Deviant workplace behavior -> negative emotions may lead to deviant workplace
behavior.

How managers can influence moods? -> By showing them a funny video – make them
laugh, offering them pleasant beverage – using humor and showing appreciation for
good job. When managers are rather in good mood then employees are positive as well.
Use emotional contagion.

Global consequences

 Degree to which people experience emotions varies across countries

 Norms for expression of emotions differ across cultures
 People’s interpretations of emotions vary across cultures (some cultures value
certain emotions more than others, but interpretations are basically similar)
Chapter 5: Personality and Values
Nature of personality

Before going deeper into the subject, we define the term personality as one’s total sum of
behaviors, reactions, and interactions with others. In organisations, HRM departments
use personality tests to measure and forecast the behavior of prospective employee.

The common method of measuring personality is self-report survey – one evaluates

himself on different variables. The other means of personality measurement is
the observer-rating survey, which is a more independent assessment – a person
observes and rates personality of another person (employee, prospective employee, etc).
Claimed to be more successful in the context of organisations.

Personality results from heredity and interactions with an environment. People’s

personalities can change over the course of time. Moreover, the notion of personality
traits appears at this point – these traits are enduring, rather unchanging attributes that
characterise behavior. If one is often shy and/or aggressive and performs these behaviors
often, we can call shyness and/or aggression his personality traits.

Models which organise traits

There are two main models which recognise and organise traits:

 The Myers- Briggs Type Indicator

 Big Five Model

The Myers- Briggs Type Indicator  the most common personality-assessment tool.
It’s a test which consists of 100 questions related to behaviors, feelings, and attitudes in
different situations. After doing the test, a person can be classified to the following
groups:

 Extroverted or introverted – extraverted types are gregarious, social, assertive,

outgoing
 Sensing or intuitive – sensing types like routine, are practical-oriented, pay
attention to details
 Thinking or feeling – thinking types are logical and analytical when facing
problems
 Judging or perceiving – judging types like the ordered, structured world, need for
control

Disadvantages of the model: a person must be classified either to one type or another –
cannot be in-between the types, and do not reflect job performance.
Big Five Model  personality-assessment tool which recognises 5 aspects:

 Extraversion: reflect one’s level of comfort with relationships

 Agreeableness -> describing someone who is warm, cooperative, easily reaches
compromises and is trusting.
 Conscientiousness -> describing someone who is organised, determined,
responsible and reliable.
 Emotional stability -> handling stress measure. Negative emotional stability relates
to people who get angry/nervous/upset easily, irritated quickly, feel insecure, and
lack confidence.
 Openness to experience -> describes curiosity of world or some of its aspects,
creativity, interest in innovations, novelties.

Studies have demonstrated the relationship between personality dimensions and job
performance. Critique: the Big Five model does not represent all relevant traits that a
personality can have.

The other traits, which are not shown in the existing 2 models, but are highly relevant to
OB are:

 Core-self evaluation -> level to which one likes or dislikes himself, whether he
thinks he is effective, able to perform tasks and have control over his surrounding.
People with positive core-self evaluation usually perform at work better.
 Machiavellianism -> level of one’s being rational & practical, goal-oriented, very
good in bargaining, keeping distance with showing (experiencing) emotions,
thinking that ends justify means. People with high level of Machiavellianism tend
to manipulate others, appear as very persuasive, and are good in negotiations.
 Narcissism -> people who are high in narcissism level are good leaders, but are
perceived by others as arrogant – they want the appreciation, admiration, they
may think they are superior.
 Self-monitoring -> one’s ability to adjust himself and his behavior to external
world, various environmental circumstances. People with high level of self-
monitoring are more responsive to external signs, but also their behavior differs
from situation to situation – they tend to behave differently when being in a public
and differently in private. High self-monitoring means better job performance
than low self-monitoring.
 Risk taking -> willingness to accept changes and take risks. Managers with high
risk-taking level make decisions faster.
 Type A personality -> people who are highly competitive, always want to achieve
more, be more efficient, they can be aggressive in pursuing their goals, even if it
takes being against other people/difficulties. In US type A is associated positively,
with ambition, success. Type B personality is the opposite – people with type B
 never hurry with anything, can be relaxed without guilt. Type A personalities do
better during work interviews, are faster workers, work long hours, usually work
under stress and their actions are more predictable.
 Proactive personality -> taking initiatives, being ahead with ideas, recognition of
opportunities. Proactive people are seen as leaders, make changes within the
organization, but they are more likely to leave the organization to start business
on their-own.

Nature of values

A personal and cultural value is a relative ethic value, an assumption upon which
implementation seems reasonable. Moreover, values that we organise according to their
importance and intensity create a value system. In OB, studying values is important
because they influence behavior, perception, attitudes. They guide one’s behavior in the
sense of doing right and wrong.

The most basic categorisation of values recognises terminal and instrumental values and
is used in Rokech Value Survey (RVS). RVS is made of two sets of values: terminal
values are desirable goals and instrumental values that represent behaviors/modes
which help to achieve the terminal values (terminal goals). People in the similar
occupations have similar RVS values.

Moreover, it is necessary to mention generational values. Researches have made the

following division:

 Veterans -> begin of the workforce in 1950s and 1960s; rather loyal, belief in
authority, order, hardworking, pragmatic, traditionalists.
 Boomers -> born after the WWII; workforce from mid-1960s until mid-1980s;
career-oriented, making-money attitude, distrust/dislike of authority.
 Xers -> entered workforce from 1985 until 2000; people with team-sprit at work,
who value relationships, bonds, balance their work with private life, question
authority, do not like rules.
 Nexters -> on the work market since 2000; people to whom financial success is
important, they are technology-oriented at work, confident, value both self and
relationships, team spirit combined with work autonomy.

Disadvantages of the division above: does not apply in all cultures, little research –
relying on intuition, inexact categories.

Matching individual’s values and personality to the workplace

Two main theories:

 1. Person-job fit
2. Person-organisation fit

Ad1. Person-job fit -> recognises 6 personality types and makes a match between
particular personality fit and occupation and its environment. A successful match
guarantees high job satisfaction and lower probability to resign from the job. The
possible personality types in person-job fit theory are: realistic, investigative, artistic,
social, conventional, enterprising. Social people match best with social occupations,
artistic people with artistic jobs, etc…

Ad 2. Person-organisation fit -> this theory claims that people are attracted to and
chosen by organisations that correspond to their values and beliefs. If it is not the case, a
person will leave the organization. A fit between one’s values and corporate culture and
values guarantees job satisfaction, organizational commitment and low probability of
leaving the firm.

Global Consequences

Hofstede’s Framework

Values and value systems differ from culture to culture. Hofstede’s framework explains
and forecasts behaviors of people from different cultures. The five dimensions of
Hofstede’s theory are:

1. Power distance -> high level of it means large differences between the rich and the
poor, accepts the existence of social classes, castes. Low level of it emphasizes
equality in society.
2. Individualism versus collectivism
3. Masculinity versus femininity: high masculinity rating  men dominate the society
in which the roles for men and women are separated. Femininity 
4. Uncertainty avoidance
5. Long-term versus short-term orientation

Critique: out-of-date (concept developed 30 years ago, based on IBM company), many
changes, world events have happened since the development of the theory (and they
also shape the dimensions), some results are surprising.

GLOBE Framework

The acronym stands for The Global Leadership and Organizational Behavior
Effectiveness. It is an on-going study in leadership and national culture across different
countries representing different cultures. Some dimensions are the same as Hofstede’s,
but apart from them, GLOBE has much more other aspects: humane orientation,
performance orientation.

Chapter 6: Perception and Individual Decision Making

Perception

Perception is defined as a process of organising and interpreting impressions, thus giving

meaning to the external environment, it is organizing our world with impressions we
have. It is different from reality, it’s subjective, personal. Factors which influence
perception can be grouped: there are factors in the perceiver (attitudes, motives,
interests, etc.), factors in the target (novelty, motion, sounds, size, etc…) and factors in
the situation <context> (time, work and social setting).

Attribution theory

It is important to remember the attribution theory. It is based on the concept that

when judging people we try to explain their behavior in two possible ways. Why?
Because we recognize that 1) behavior can be internally caused and/or 2) behavior can be
externally caused. When observing, judging a person we try to determine whether his
behavior is caused internally or externally. Internally caused behaviors are the ones we
see as under the control of an individual. Externally caused are the ones we see as the
situation forcing a person to do something. There are, however, 3 factors that determine
the fact whether we perceive one’s behavior as internally or externally caused.

1. Distinctiveness - > degree to which one behaves differently in different situations

2. Consensus -> degree to which people facing the same situation, respond similarly
3. Consistency -> degree to which one’s behavior is consistent, unchanging over time

Moreover, when we judge behaviors of others, we often make fundamental attribution

error. It is a tendency to underestimate the external environment (situational
circumstances) and overestimate internal factors (e.g. blame the person, his personality).

Apart from fundamental attribution error, we are usually under the high influence
of self-serving bias. It is one’s tendency of attributing his successes to internal factors
and failures to external factors. Not blaming self, blaming others.

Shortcuts in judging others

  Selective perception -> we base our judgments on the selected by us range/sample
of characteristics (when we judge a person) or aspects of a situation. We can
‘speed-read’ others, but there is a risk of inaccurate judgements.
 Hallo effect -> tendency to make mental generalizations, impressions about a
person basing on just his one characteristic. A single trait can influence the overall
impression.
 Contrast effects -> when judging a person we compare him to other people we
have lately met and whom we have evaluated better or worse on a particular
dimension
 Stereotyping-> judging someone on the basis of a perception we have about a
group to which he belongs. Profiling is a different category of stereotyping – it is
selecting a particular group which we stereotype aiming at intensive
inquiry/investigation (used in police, criminology)

Applications of shortcuts in organizations:

 Employment interview - > first impression is extremely important

 Performance expectations -> might be concerned with self-fulfilling prophecy –
effect of one’s inaccurate perception about another person makes this person
confirm that inaccurate perception (and behave in such way).
 Performance evaluation: subjective evaluations can be problematic.

Link between perception and individual decision making

Perceptions largely influence the quality of decision-making. The decision-maker will

evaluate the data received according to his perception, bias may be involved.

Decision-making in organisations can fall into one of the three categories:

1. Rational model -> decision-making model that consists of 6 steps, which one
should take to find a problem-solution. Gives a ready scheme that follows a logical
order.
2. Bounded rationality -> based on the idea that people simplify problems to be
able to deal with them, we take out multifaceted aspects of the problem and thus
reduce complexity. Only find the first acceptable solution, but not the optimal
one.
3. Intuitive decision making -> relaying on intuition when making a decision,
takes place on unconscious level. It would be effective to complement this with
evidence and good judgements in decision making.
Common biases and errors in decision- making:

 Overconfidence bias – we overestimate our abilities, intellect, knowledge.

 Anchoring bias – we rely too much on one piece of information or “anchor”.
 Confirmation bias – in a decision-making it means seeking out information that
reaffirm our previous choices and discount information that contradicts it.
 Availability bias – basing decision on information that is already gathered and
available.
 Escalation of commitment – not changing the previous decision despite the
negative information.
 Randomness error – tendency to believe that one can predict random events
 Winner’s curse – concept which states that winners of auctions usually pay too
much for items they bought, in that they overvalue the items.

 Hindsight bias – inclination to see events that have occurred as more predictable
than they in fact were before they took place.

Individual differences in decision- making:

 Personality: achievement striving people are more likely to escalate commitments

than dutiful people.
 Gender – women have tendency to rumination (over-thinking problems, decisions,
analyzing them for very long, before and after some decisions are made)

Organisational constraints:

 Performance evaluation – managers are influenced in their decision-making by

criteria of their later evaluation
 Reward system – organization’s reward system influences decision-making
 Formal regulations – choices, decisions which are made have to fit to regulations,
rules, directives of a firm
 System-imposed time constraints – imposing deadlines influence decision-making
 Historical precedents – today’s choices are influenced by past choices

Ethics in decision making - 3 ethical decision criteria

Utilitarian criterion – the aim of utilitarianism –> make the best decision that provides
greatest good for the greatest number. Pros and cons: promotes efficiency, productivity
but ignores individuals (can be minorities).
Rights – making decisional choices consistent with rights, laws, liberties. This criterion
protects whistle-blowers who are workers that reveal unethical practices of their
organization (because they have a right to free speech). Pros and cons: gives individual
freedom, rights, protection, but at the same time creates too much of a law-based
environment, which lowers productivity and efficiency

Justice – criterion which characterises people who make decision to achieve equity and
aim at fair distribution of benefits. Pros and cons: protects rights of underprivileged, but
creates a sense of entitlement, this reduces risks taking, innovation, productivity.

Utilitarianism tends to be the safe choice for decision-makers, but should not be the
single criterion to judge good decisions.

Improving creativity in decision making

Creativity can be described as ability to generate new, innovative, useful and resourceful
ideas. It is becoming more important in decision-making process. Allows to see more
perspectives and angles of a problem. Most of us need to learn to unleash our creative
potential

Three-component model of creativity. It is a model that proposes that one’s creativity

needs expertise (know-how, particular knowledge), creative thinking skills and task
motivation (high motivation to work on interesting, challenging projects)

Global consequences:

1. Attributions – attributions which people make differ across countries. One needs
to be aware of this fact when making decision or judging decisions of others.
2. Decision-Making – culture has influence on the decision-making process.
3. Ethics – there are different ethical norms in different cultures.