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Chapter 9: Communication

IBM and virtual social worlds (www.secondlife.com) for events, white-board brainstorming,mentoring, new employee orientation, simulations and rehearsals, software development

Communication: the sharing of information between two or more people to achieve a commonunderstanding about an object or situation (thus, communication does not end with the message

sent) Encoding: the process whereby a sender translates the information he or she wishes to send in a

message

Communication Medium / Communication Channel: the manner in which a message is conveyed Decoding: the process whereby a receiver perceives a sent message and interprets its meaning Feedback: the process whereby a receiver encodes the message received and sends it or a response

to it back to the original sender

o Communication that includes feedback is referred to as two-way communicationOrganization Communication

Organizational Communication: the patterns and types of communication that occur at theorganizational and unite levels. Purpose = facilitate the achievement of the organizations goals

Communication networks affect coordination, innovation, and performance Overall, reasonably dense networks with some degree of leader centrality tend to be the most

effective consistent w/ high involvement management

Sparse Networks: a communication network in which most or all network members communicatewith only a few other members

o Creates an opportunity for brokerage where one or more members of a network act as aconduit or go-between for information exchanges between members without direct ties

o Wheel, Y, Circle Dense Networks: a communication network in which most or all network members communicate

with many other members

o Well-connected network: Density score of .80 (16 connections among 5 ppl divided by 20possible connections)

Centralized Networks: a communication network in which one or a few network membersdominate communications

o Wheel and Y simple tasks due to efficiency, speed, and accuracy Decentralized Networks: a communication network in which no single network member

dominates communications

o Circle and Well-connected network complex tasks

Communication w/I organizations can occur in any of three directions: downward, upward,horizontally

Downward Communication: communication that flows from superior to subordinateo Necessary to provide job instructions, info on organization policies, and performance

feedback

o Disadvantage lower-level managers and associates often complain about the lack ofinformation on goals and changes being made in the organization

Upward Communication: communication that flows from subordinate to superior

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o Necessary to provide feedback on downward communication and to provide ideas andinformation

o Can be difficult to achieve in an effective way; can be costlyo Departmental meetings, open-door policies, suggestion boxes, attitude surveys,

participation in decisions, grievance procedures, exit interviews

Horizontal Communication: communication that takes place between and among people at thesame level

o Face-to-face conversations, phone conversations, and e-mailo boundary-spanning positions

360-degree feedbacko Problems: retaliations, politically motivated to either overrate or underrate

Interpersonal Communication

Interpersonal Communication: direct verbal or nonverbal interaction between two or more activeparticipants.

Formal Communication: communication that follows the formal structure of the organization (e.g.,superior to subordinate) and entails organizationally sanctioned information

o Drawback can be slow Informal Communication: communication that involves spontaneous interaction between two or

more people outside the formal organization structure; Ex. Peers on their coffee break

o Benefit enables managers to reach more members than the formal one; can help buildsolidarity and friendship among associates

o Drawback rumors and gossip Rumors: unsubstantiated information of universal interest Gossip: information that is presumed to be factual and is communicated in private or intimate

settings not specifically work related reduces associates focus on work, ruins reputations,

creates stress, lead to legal problems

Communication Media

o Richness the amount of information a medium can convey. Depends on:1) Availability of feedback2) Use of multiple cues3) Use of effective language4) Extent to which the communication has a personal focus

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Effective managers will use richer media as the message becomes more equivocal Equivocal messages are those that can be interpreted in multiple ways Managers will use richer media when the message is important and when they feel the need to

present a positive self-image

Organizational norms that indicate which types of communication media are desirableCommunication Technology

Problem: information overload, leak private or secret information to an unintended audience w/unintended consequences

Nonverbal

Nonverbal communication: communication that takes place without using spoken or writtenlanguage, such as communication through facial expressions, tone of voice, personal appearance,

contact or touch, mannerisms 60 to 90% of all interpersonal communication is nonverbal

o Three Categories: (1) Body Language (2) Paralanguage (3) Gestures Body Languagekinesics facial expressions, hands, arms, legs, posture Paralanguage how something is said tone of voice, pitch of voice, silence Gestures signs used to convey specific meanings okay sign with fingers

Leaky Behaviors are those that we cannot control Nonverbal can provide a form of feedback Can reveal whether a person is lyingOrganizational Barriers to Effective Communication

1) Information Overload May escape information or prioritize it

2) Information Distortion Unintentional distorting due to honest mistakes or time pressure; Intentional distortion

due to competition

3) Jargon Specialists in two different fields

4) Time Pressures5) Cross-Cultural Barriers

Expatriate managers may fail in their international assignments Lack of language fluency, broader lack of cultural fluency Internationally sold products: Advertisement slogans, names for products Cultural Fluency: the ability to identify, understand, and apply cultural differences that

influence communication

Language fluency is necessary for cultural fluency but is not enough by itself6) Network Breakdowns

Interference in flow of communication Breakdowns involving communication

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Individual Barriers to Effective Communication

Individual factors are the most commonly cited barriers to effective communication1) Differing Perceptions

When the sender has one perception of a message and the receiver has another causedby differing frames of reference

2) Semantic Differences Semantics: refers to the meaning people attach to symbols, such as words and gestures

3) Status Differences Can result from both organizational and individual factors

4) Consideration of Self-Interest Forecasts of future activity, performance standards, and recommendations on capital

budgets are often used in determining the managers compensationmanagerssometimes provide info that is in their self-interest; incomplete data

5) Personal Space Differs among individuals, genders, and across cultures

6) Poor Listening Skills The receiver must listen in order to hear and understand the senders message Managers listen with about 25% efficiency

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Overcoming Communication Barriers

Communication Audit: an analysis of an organizations internal and external communication toassess communication practices and capabilities and to determine needscan be conducted in-houseor by external consulting firms

o Often are used to ascertain the quality of communication and to pinpoint any deficiencies inthe organization

o Examine the organizations communication philosophy and objectives, existingcommunication programs, communication media, quantity and quality of personal

communications, and employee attitudes toward existing communications

Communication Climate: associates perceptions regarding the quality of communication withinthe organization

o Influences the extent to which associates identify with their organizationo Mutual trust exists between senders and receivers, communication credibility is present, and

feedback is encouraged, managers should encourage a free flow of downward, upward, and

horizontal communication

Improve Interpersonal Communication:o Know Your Audienceme to me to me communication (Scudder) such communication

assumes that others share your frame of reference and, in the absence of feedback, that

people interpret the message as you intend it; know audience, their experience, frames of

references, and motivations

o Select an Appropriate Communication Medium various communication media differ inrichness; follow-up complex/important info with e-mail after face-to-face interaction

o Regulate Information Flow and Timing discarding information of marginal importance andconveying only significant information

o Encourage Feedback Related to Understanding to ensure that the received message isinterpreted as intended, feedback from the recipient is necessary

Ask to repeat what they have heard; Promote and cultivate feedback; Reward thosewho provide feedback & use feedback received (thank them); Respond to feedback

o Listen Actively listening is not passive; must consciously listen to others Stop talking, Pay attention, Listen empathetically, Hear before evaluating, Listen to

whole message, Send feedback

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Chapter 10: Decision Making by Individuals and Groups

Decisions: choices of actions from among multiple feasible alternativesDecision Making Process

Define the Problem problems are typically gaps between where we are today and where we wouldlike to be tomorrow

Identify Criteria exactly what is important in solving the problem; determine what info the decisionmaker needs to collect in order to evaluate alternatives and help her explain the choice that she

ultimately makes

Gather and Evaluate Data better understand the decision context and to discover specificalternatives that might solve the problem.

Decision maker cannot choose an alternative that has not been considered Decision maker cannot choose an alternative that is better than the best alternative on list

List and Evaluate Alternatives assess each alternative using each criterion Select Best Alternative choose alternative that seems to best satisfy the criteria Implement and Follow-Up monitor the results to ensure that the adopted alternative solved the

problem; may determine that the chosen alternative did not work, a new problem must be solved

Optimal v. Satisfactory Decisions

Effective Decision: one that is timely, acceptable to those affected by it, and satisfactory in terms ofthe key decision criteria

Satisficing Decisions: satisfactory rather than optimal decisions (Boundedly Rational Decisions)o Two important reasons people often make satisfactory decisions rather than optimal:

1) Do not have the capability to collect an process all of the information relevant for aparticular decision lack time and other resources

2) Tendency to choose the first satisfactory alternative discoveredIndividual Decision Making

Decision making is a cognitive activity that relies on bothperception andjudgmentDecision-Making Styles

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Jungs Theory: an individuals predispositions can affect the decision process at two critical stages(1) the perceiving of information (2) the judging of alternatives

1. Gathering Information Requires perceptual processes Sensing: a decision style focused on gathering concrete information directly through the senses,

with an emphasis on practical and realistic ideas

o Such a person believes in experience and typically wants to focus on rules andregulations, step-by-step explanations, and fact checking; develop factual database

o See themselves as practical and realistic; enjoy the information-gathering stageo Most appropriate for jobs where routine decisions are typical

Intuition: a decision style focused on developing abstractions and figurative examples for use indecision making, with an emphasis on imagination and possibilities

o Dislike details and the time required to sort and interpret them; perceive info in largechunks (holistic, integrated abstractions)

o Decisions often based on imagination; Creativity comes from inspiration rather thanconcentrated effort

o May better cope with rapid change and crisis situationso Most appropriate for jobs where novel decisions and a need for creativity are common

When a high level of ambiguity exists, few or no precedents exists, facts arelimited, facts dont clearly indicate which way to go, time is limited and there is

pressure to make the right decision

2. Evaluating Alternatives There is no fixed relationship between a persons information-gathering style and his judgment

style

Thinking: a decision style focused on objective evaluation and systematic analysiso Use an impersonal, rational approach to arrive at their judgmentso Objective, analytical, logical, and firmo Concerned with principles, laws, and objective criteriao Easy to critique the work/behavior of others, uncomfortable dealing w/ peoples feelingso Able to discipline and reprimand people, even fire them if necessaryo Firm and seem detached and impersonal to subordinateso Conservative in their decisions

Feeling: a decision style focused on subjective evaluation and the emotional reactions of otherso Emphasize the maintenance of harmony in the workplaceo Judgments are influenced by their own or others personal likes and dislikeso Subjective, sympathetic, and appreciative in their decisionso Give more weight to maintaining a friendly climate in the work group than to effective

task achievement

3. Using Decision Styles Mind-stretching techniques: can be helpful in addressing the problem of limited styles by

extending ways of thinking about situations and broadening the decision styles used

Six Thinking Hats: the de Bono Group, exercise in class Brain Dominance Technique: Hermann International

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Degree of Acceptable Risk

Risk exists when the outcome of a chosen course of action is not certain Risk-Taking Propensity: willingness to take chances

o Low-risk propensity may collect and evaluate more informationo High-risk propensity must avoid making decisions with too little information

Reference Point: a possible level of performance used to evaluate ones current standingo Can be a goal, a minimum acceptable level of performance, the average performance level of

others

Cognitive Biases

Cognitive Biases: mental shortcuts involving simplified ways of thinkingo Although are harmless and save time, they often cause problems

Confirmation Bias: a cognitive bias in which information confirming early beliefs and ideas issought while potentially disconfirming information is not sought

o Individuals subconsciously seek only information that supports their early thinking Ease-of-Recall Bias: a cognitive bias in which information that is easy to recall from memory is

relied upon too much in making a decision

o Easily recalled information may be misleading or incompleteo May not be indicative of the overall situation (ex. Performance appraisals)

Anchoring Bias: a cognitive bias in which the first piece of information that is encountered about asituation is emphasized too much in making a decision

o Even when decision makers acquire a wide range or additional information (therebyavoiding the confirmation bias), initial information can still have too much influence.

Sunk-Cost Bias: a cognitive bias in which past investments of time, effort, and/or money are heavilyweighted in deciding on continued investment

o Reluctant to walk away from past investments, preferring to build on them and make themsuccessful

o Decision makers should treat a past investment as a suck cost and focus on the future costsand benefits of continued investments

o Sunk Cost a cost that is unrecoverable and irrelevant

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Moods and Emotions

Moods: affective states corresponding to general positive or negative feelings disconnected fromany particular event or stimulus

o Individuals in positive moods seem to neglect the details of decision situations pooroutcomes when such details are crucial

o Individuals in positive moods seem to exhibit more breadth in ideas considered, which cancreate more exploration, less conservatism, more creativity, and perhaps more risk taking

o Positive moods overall performance was lower than those in bad moods because detailsmattered in the trading context

Emotions: affective states corresponding to specific feelings, such as anger, that tend to beassociated with particular events, people, or other stimuli

o Regret is an aversive emotion involving self-blame that comes from unwanted outcomesavoiding in the future a choice that has led to a poor outcome

o Self-management this reaction to regret can protect the ego of the decision makero Anger may cause decision makers to be less effective gatherers and evaluators of

information; May lead to lower perceived risk unwanted decision consequences, particularlyin comparison to the effects that other negative emotions have on perceived risk (fear)

Group Decision Making

Pitfalls

1) Groupthink Groupthink: a situation in which group members maintain or seek consensus at the expense

of identifying and debating honest disagreements; increases the likelihood of a poor decision

o Focusing too much attention on censuses, especially early in a decision process, canresult in a faulty decision

o Most likely occurs when a group that has a positive image is under threat (toughcompetitor)

o Eight Specific Symptoms:1- Self-Censorship remain quiet during group discussions and avoid issues that

might upset the group

2- Pressure to any group member who expresses opinions that threaten groupconsensus

3- Unanimity members quiet are assumed to be in agreement4- Rationalization complex rationales that discount information that conflict w/

their thinking

5- Invulnerability group members ignore any dangers, become overly optimisticand take unwarranted risks; overestimate collective wisdom

6- Mindguards shield the group from any facts, criticisms, or evaluations that mayalter the illusion of unanimity and invulnerability

7- Morality talk about the morality of what they are doing and the immorality ofopposing views; ignore ethical and legal issues

8- Stereotypes develop negative stereotypes of other people and groups

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2) Common Information Bias Common Information Bias: a bias in which group members overemphasize information held

by a majority or the entire group while failing to be mindful of information held by one group

member or a few members

o Defeats the availability of unique information, ideas, and perspectives brought to theprocess by individual group members

3) Diversity-Based Infighting Diversity-Based Infighting: a situation in which group members engage in unproductive,

negative conflict over differing views

o Instated of creating rich discussions and insight, diverse ideas can create ill will andfractured groups

o Fix this by formal brainstorming procedures and the formal use of devils advocacy4) Risky Shift

Risky Shift: a process by which group members collectively make a more risky choice thanmost or all of the individuals would have made working alone

o Involves diffusion of responsibility no single person can be blamed if the decision turnsout poorly, they can shift the blame entirely to others (the group)

Group Decision Making Techniques

1) Brainstorming Brainstorming: a process in which a large number of ideas are generated while evaluation ofthe ideas is suspended

o Groups do not do as well as individuals brainstorming aloneo Overcoming problems of standard group brainstorming:

Brain-Writing: write down all of their ideas, placed on a flipchart or whiteboard bypooling the written remarks (removing oral to a written approach and anonymity

and less distractions)

Electronic Brainstorming (EBS): computer stations in front of them, enter ideas intoa database, projected onto a large screen anonymity, remove oral, less distractions

Self-censorship

Pressure

Unanimity

Rationalization

Invulnerability

Mindguards

Morality

Stereotypes

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2) Nominal Group Technique Nominal Group Technique: a process for group decision making in which discussion is

structured and the final solution is decided by silent vote

o Eliminates a great deal of interaction among group members; better than brainstormingo Four Procedural Rules:

1- Write down ideas silently, no discussion2- Present one idea to the group; second idea after the first round; repeated until done3- Ideas recorded on blackboard for projection, then discussion clarify and evaluate4- Silent and independent vote or ranking of choices

3) Delphi Technique Delphi Technique: a highly structured decision-making process in which participants are

surveyed regarding their opinions or best judgments

o Do not meet face-to-faceo Most common approach respond to a questionnaire about the issue of interest

responses are summarized and results are fed back to the group given a second

opportunity to respond and may or may not change their judgments

o May feel constrained by the particular set of questions posedo When members of the group are geographically dispersed

Brainstorming, Nominal group technique, Delphi technique = more concerned w/ increasing thenumber of ideas generated

Dialectical inquiry and Devils advocacy = concerned with directly improving the quality of the finalsolution, help group find best choice; both use constructive conflict; however can result is lower

levels of group satisfaction

4) Dialectical Inquiry and Devils Advocacy Dialectical Inquiry: a group decision-making technique that relies on debate between twosubgroups that have developed different recommendations based on different assumptions

o Requires group members to develop two distinct points of view; debate of the twoopposing sets of recommendations and assumptions maximizes constructive conflict

Devils Advocacy: a group decision-making technique that relies on a critique of arecommended action and its underlying assumptions

o Requires the group to generate only one set of assumptions and a singlerecommendation, which are then critiqued by the devils advocate

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Individual v. Group Decision Making

Associate Involvement in Managerial Decisions

The correct level of involvement depends on the nature of the decision problem itself Vroom-Yetton Method: requires the manager first to diagnose the problem situation and then to

determine the extent to which associates will be involved in the decision-making processo Optimal extent of involvement depends on the probable effect participation will have on:

(1) the quality of the decision,

(2) the acceptance or commitment subordinates exhibit when implementing the decision,

(3) the amount of time needed to make the decision

o When a group decision approach is to be used (Type GII), the manger must determine howmuch agreement should exist within the group

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Value of Individual v. Group Decision Making

Group decision making should increase the number of ideas generated and improve the evaluationof alternatives generally produce better decisions

a) Time groups take more time to reach a decision. Options: make decision alone, use group foradvice only, use already existing group to minimize the arrangement time, use majority-decision

rule rather than unanimity, used the nominal group techniqueb) Cost group decision costs more than individual; time costs moneyc) Nature of the Problem group have more info and ideas than single individual; however,

groupthink, information bias, diversity-based infighting, and risky shift; but devils advocacy can

help overcome these negative social forces

d) Satisfaction and Commitment group decision making increases individual satisfaction andcommitment

e) Personal Growth group decision making ideal opportunity for personal growth

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Chapter 11: Groups and Teams

Synergy: an effect wherein the total output of a team is greater than the combined outputs ofindividual members working alone

Groups and Teams Defined

Group: two or more interdependent individuals who influence one another through socialinteraction

Team: groups of individuals working toward specific goals or outcomes;1. two or more people2. with work roles that require them to be interdependent,3. who operate within a larger social system (the organization),4. performing tasks relevant to the organizations mission,5. with consequences that affect others inside and outside the organization,6. and who have membership that is identifiable to those on the team and those not on the team.

Formal and Informal Groups

Formal Groups: groups two which members are formally assigned (faculty department, highwaycrew, assigned project team for class)

Informal Groups: groups formed spontaneously by people who share interests, values, or identities(fantasy football league, Happy Hour on Friday afternoon with group of employees)

Identity Groups: groups based on the social identities of members (Hispanic, female, Catholic) Virtual Teams: teams in which members work together but are separated by time, distance, or

organizational structure benefits = they allow people who are physically separated to work

together but less effective than face-to-face teams in many instances

o Trust can be slower to developo Members rely on communication channels that are less rich than face-to-face

misunderstandings are more likely to occur

o More difficult for virtual teams to develop behavioral normso Easier for some members to be free riders causing frustration among other members

Functional Teams: teams are distinguished by the type of work they do & the purpose they serveo Production teams produce tangible products (team of restaurant chefs)o Service teams engage in repeated transactions with customers (Starbucks baristas)

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o Management teams managers who coordinate the activities of their respective units(senior management teams)

o Project teams associates (from different functional areas or org. units) who temporarilyserve as teams to complete a specific project (new-product development teams)

o Advisory teams formed to advise the organization on certain issues ( disability groupsadvise on technical aspects of various products)

Self-Managing Teams:Team Effectiveness

Knowledge Criteria

Affective Criteria

Outcome Criteria

Is the Team Needed?

Factors Affecting Team Effectiveness

Process Loss: the difference between actual and potential team performance that is caused bydiverting time and energy into maintaining the team as opposed to working on substantive tasks

Team Composition

Team Orientation: the extent to which an individual works well with others, wants to contribute toteam performance, and enjoys being on a team

Roles: expectations shared by group members about who is to perform what types of tasks andunder what conditions

Task Roles: roles that require behaviors aimed at achieving the teams performance goals and tasks

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Socioemotional Roles: roles that require behaviors that support the social aspects of theorganization

Destructive Individual Roles: roles involving self-centered behaviors that put individual needs andgoals ahead of the team

Norms: informal rules or standards that regulate the teams behavior Divisible Tasks: tasks that can be separated into subcomponents Unitary Tasks: tasks that cannot be divided and must be performed by an individual Maximization Tasks: tasks with a quantity goal Optimization Tasks: tasks with a quality goal Interpersonal Cohesion: team members liking or attraction to other team members Task Cohesion: team members attraction and commitment to the tasks and goals of the team Social Facilitation Effect: Improvement in individual performance when others are present Social Loafing: a phenomenon wherein people put forth less effort when they work in teams than

when they work alone

Punctuated Equilibrium Model (PEM): a model of team development that suggests that teams donot go through linear stages but that team formation depends on the task at hand and the deadlines

for that task.

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Chapter 12: Conflict, Negotiation and Power

Conflict: a process in which one party perceives that its interest are being opposed or negativelyaffected by another party

Dysfunctional Conflict: conflict that is detrimental to organizational goals and objectives Functional Conflict: conflict that is beneficial to organizational goals and objectives Personal Conflict: conflict that arises out of personal differences between people, such as differing

values, personal goals, and personalities

Substantive Conflict: conflict that involves work content, tasks, and task goals Procedural Conflict: conflict that arises over how work should be completed

Conflict Escalation: the process whereby a conflict grows increasingly worse over time Negotiation: a process through which parties with different preferences and interests attempt to

agree on a solution

Distributive Bargaining: a strategy that: (1) involves a competing, win-lose approach and (2) tendsto be used when one partys goals are in direct conflict with the goals of another party

Integrative Bargaining: a strategy that: (1) involved a collaborative, win-win approach and (2)tend to be used when the nature of the problem permits a solution that is attractive to both parties

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Attitudinal Structuring: activities aimed at influencing the attitudes and relationship of thenegotiating parties

Power: the ability to achieve desired outcomes Legitimate Power: power derived from position; also known as formal authority Reward Power: power resulting from the ability to provide other with desired outcomes Coercive Power: power resulting from the ability to punish others Expert Power: power resulting from special expertise or technical knowledge Referent Power: power resulting from others desire to identify with the referent Strategic Contingencies Model of Power: a model holding that organizational units and people

gain power by being able to address the major problems and issues faced by the organization

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Chapter 12: Organizational Politics

Organizational Politics: behavior that is directed toward furthering ones own self-interestswithout concern for the interests of well-being of others

o Goal is to exert influence on others Organizational politics is a fact of life in most organizations. Political behavior can be carried out

through a wide range of tactics. The extent to which a politician is successful in achieving his or herown goals depends on political skill

Coalition: a group whose members act together to actively pursue a common interest Upward Political Influence refers to individual or group influence on those in a superior position,

such as their manager

Lateral Politics refers to attempts to influence targets at the same hierarchical level Downward Influence refers to attempts to influence those lower down in the hierarchyPolitical Tactics:

Rational Persuasion using logical arguments or factual information to persuade targets thatthe persuaders request will result in beneficial outcomes

Consultation requires getting the target to participate in the planning or execution ofwhatever the politician wants accomplished.

Personal Appealfocuses on the targets loyalty or affection (ex. Reminds targets about how hehas always supported their ideas)

Ingratiation makes the target feel good by flattering or helping him Inspirational Appeal used to generate the enthusiasm and support of targets by appealing to

their important values and ideals

Exchange a person volunteers a favor in order to gain a favor in return. Old axiom, Ill scratchyour back if youll scratch mine.

Coalition people w/ common interests join together to pursue their interests; Ex. representedby ethnic and minority group members who band together to promote organizational diversity

Legitimizingmaking a request seem legitimate or official; saying this is how managementwants it done.

Pressure threats, nagging, or demands as a means of influencing targets Extraverts are likely to use inspirational appeals and ingratiation, whereas people high on

conscientiousness are most likely to use rational appeals

Political Skill: the ability to effectively understand others at work and to use this knowledge toenhance ones own objectives affects the successful use of political tactics

o Can be positive, but only if sued to achieve the appropriate goals (of the organization and notoneself)

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Chapter 13: Organizational Structure and Culture

Organizational Structure: work roles and authority relationships that influence behavior in anorganization

Organizational Culture: the values shared by associates and managers in an organization

Fundamental Elements of Organizational Structure

Essentially, an organizations structure is a blueprint of the reporting relationships, distribution ofauthority, and decision making in the organization

Hierarchy: the reporting relationships depicted in an organization chartStructural Characteristics

Structural Characteristics: the tangible, physical properties that determine the basic shape andappearance of an organizations hierarchy (indirectly affect behavior) the shape of a hierarchy is

determined by its height, spans of control, and type of departmentalization

Height: the number of hierarchical levels in an organization, from the CEO to the lower-levelassociates tall hierarchies often create communication problems, information flow is slowed anddistorted, employees are unclear on appropriate actions and behaviors, lower satisfaction and

commitment; tall hierarchies are more expensive

Span of Control: the number of individuals a manger directly overseeso Broad spans have advantages: 1) result in shorter hierarchies thereby avoiding

communication and expense problems 2) promote high-involvement management b/c

managers have difficulty micromanaging people when there are larger numbers of them 3)

allow for more initiative by associates

o It has been argued that a CEOs span of control should not exceed six people

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Departmentalization: the grouping of human and other resources into units, typically based onfunctional areas or markets

o Functional Form of Departmentalization resources related to a particular functional areaare grouped together

Advantages: Deep specialized knowledge in each functional area and economies ofscale within functional areas

Weaknesses: managers and associates in each functional department can becomeisolates from those who work in other departments (harms coordinated action and

causes slow responses to major industry changes that require two or more

functional areas to work together) lateral relation mechanisms can overcome this

weakness

o Divisional Form of Departmentalization organization has multiple products or servicesor operates in multiple geographical areas can group its resources into divisions FedEx

implemented a divisional structure

Benefits: 1) Better coordination among individuals in functional areas people tendto be closer to one another and fewer barriers (formal or informal) to direct

communication 2) Rapid response and managers in the various functional areas

coordinate more effectively, response times are often faster 3) Tailoring to the

different product/service or geographical markets

Drawbacks: 1) lack of collaboration across the product/service or geographicmarkets 2) diseconomies of scale within functional areas

Hybrid: some functional areas divided across divisions, while others remain intact at the corporatelevel, for cost reasons

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Network: many or most functional areas are outsourced to other organizations (homebuilders).Chief benefit: allowing a firm to focus on what it does best while outsourcing the rest. Quality control

can be an issue and coordination of internal and external efforts

Structuring Characteristics

Structuring Characteristics: the policies and approaches used to directly prescribe the behavior ofmanagers and associates includes centralization, standardization, formalization, and specialization

Centralization: the degree to which authority for meaningful decisions is retained at the top of anorganization top-level managers retain most authority, leaving less for mid- and lower-level

managers and very little for associates ~not consistent w/ high-involvement management

Standardization: the degree to which rules and standard operating procedures govern behavior inan organization when high, managers and associates are expected to follow prearranged

approaches to their work, and their behavior is very predictable ~ reduced opportunities for

individual initiative, creativity, and self-directed collaboration w/ others inside and outside the org.

Formalization: the degree to which rules and operating procedures are documented on paper or incompany intranets closely related to standardization

Specialization: the degree to which associates and managers have jobs with narrow scopes andlimited variety

The Modern Organization

Structural = Organic = Learning = Boundarylesso Fewer management levels, broader spans of control, lesser amounts of centralization,

standardization, formalization, and specialization; the flexible approach provides freedom

for lower-level managers and associates to think for themselves

Structuring = Mechanistic = Nonlearning = Traditional Modern organizations tend to favor organic structures closely aligned with high-involvement mgt

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Factors Affecting Organizational Structure

Factors that should be considered in designing the structure of the firm include strategy, externalenvironment, internal technology, and organizational size

A) The Role of StrategyCorporate Strategy

Corporate Strategy: the overall approach an organization uses in interacting with its environment.The emphasis is placed on growth and diversification focus on orgs stockholders and other critical

external constituents oriented toward growth, diversification, or both

Growth: relates to increases in sales as well as associates and managers almost all types of orgsuse growth as a measure of success

o Growth can be achieved through internal developmentor by external acquisitionacquisition is often a faster method of achieving growth, but carries some risk

o Internal-growth strategy firms are likely to have larger marketing and research anddevelopment (R&D) departments, authority for decisions is decentralized to the heads ofthese departments

o External acquisition the firms are likely to have the more well-developed financial andlegal functions required to analyze and negotiate acquisitions

Diversification: related to the number of different product lines or service areas in the organizationo Primary reason firms diversify is to reduce overall risk by decreasing dependency on one or

a few product markets can also diversify the geographic markets they serve by entering

new foreign markets

Most companies following a diversification strategy move on to become related-product firms As firms become more diversified, the more they should adopt the divisional form they should

develop divisions for each of their end-product businesses

Holding Company: structure used by large, highly diversified unrelated-product firms in which theoperating divisions are extremely autonomous

U-form organizations: (unitary) firms with functional structures M-form organizations: (multidivisional) firms with divisionalized structuresBusiness Strategy

>95% of annual sales come from 1 product

70-94% of sales come from 1 product

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Business Strategy: how a firm competes for success against other organizations in a particularmarket

o Necessary to ensure effective competitive actions in the different markets in which a firmintends to operate (ex. Maintaining low internal costs as a basis for low prices offered to

customers; product/service differentiation)

A more advanced form of the divisional structure, strategic business units (SBUs) are sometimesused for more complex firms

B) The Role of the EnvironmentEnvironment and Basic Structure

Environmental Uncertainty: the degree to which an environment is complex and changing;uncertain environments are difficult to monitor and understand related to the type of structure an

organization utilizes

Environment and Integration

Slack Resources: an integration technique whereby a department keeps more resources on handthan absolutely required in order to reduce the need for tight communication and coordination with

other departments

Self-Contained Tasks: an integration technique whereby a department is given resources fromother functional areas in order to reduce the need to coordinate with those areas

Information Technology: an overall set of tools, based on microelectronic technology, designed toprovide data, documents, and commentary as well as analysis support to individuals in an

organization.

Lateral Relations: elements of structure designed to draw individuals together for interchangesrelated to work issues and problems.

Organic

Lower-level managers and employees

must think for themselvesHigh Uncertainty

Less Organic

Mid- and senior-level managers

create rules and procedures to followLow Uncertainty

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C) The Role of TechnologyTechnology and Structure: A Manufacturing Framework

Mass Customization: a manufacturing technology that involves integrating sophisticatedinformation technology and management methods to produce a flexible manufacturing system with

the ability to customize products for many customers in a short time

Technology and Structure: A Broader Framework

D) The Role of Organizational Size

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Ambidextrous Organization: an organization structure that balances formalization andstandardization to help to achieve efficiency and flexibility

Socialization: a process through which an organization imparts its values to newcomers Cultural Audit: a tool for assessing and understanding the culture of an organization Subcultures: in the organizational context, group that share values that differ from the main values

of the organization

Values: abstract ideals that relate to proper life goals and methods for reaching those goals

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Chapter 14: Organizational Changes and Development

Aspiration-Performance Discrepancies: gaps between what an individual, unit, or organizationwants to achieve and what it is actually achieving

Life-Cycle Forces: natural and predictable pressures that build as an organization rows and thatmust be addressed if the organization is to continue growing

Changes in Top Management: involve the replacement of top management team members whoretire or depart the company for other reasons

Planned Change: a process involving deliberate efforts to move an organization or a unit from itscurrent undesirable state to a new, more desirable state

End (Goal) Values

Prosperity

Stimulating

Achievement

World peace

Harmony

Equality

Security

Freedom

Happiness

Inner peace

Love

National security

Pleasure

Religion

Self-respectSocial respect

Friendship

Wisdom

Means (Behavior) Values

Ambition

Open-mindedness

Competence

Cheerfulness

Cleanliness

Courageousness

Forgiving

Helpfulness

Honesty

Imagination

Independence

Intelligence

Rationality

Affection

Obedience

CourtesyResponsibility

Self-discipline

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Unfreezing: a phase in the change process in which leaders help managers and associates movebeyond the past by providing a rationale for change, by creating guilt and/or anxiety about not

changing, and by creating a sense of psychological safety concerning the change

Transforming: a phase in the change process in which leaders help to implement new approachesby providing information that supports proposed changes and by providing resources and training

to bring about actual shifts in behavior

Refreezing: a phase in the change process in which leaders lock in new approaches byimplementing evaluation systems that track expected behaviors, by creating reward systems that

reinforce expected behaviors, and by ensuring that hiring and promotion systems support the new

demands

Resistance to Change: efforts to block the introduction of new approaches. Some of these effortsare passive in nature, involving tactics such as verbally supporting the change while continuing to

work in the old ways; other efforts are active in nature, involving tactics such as organized protests

and sabotage

Procedural Justice: in the context of organizational change, the perceived fairness of the changeprocess

DADA syndrome: a sequence of stages Denial,Anger, Depression, and Acceptance throughwhich individuals can move or in which they can become trapped when faced with unwanted

change

Organization Development (OD): a planned organization-wide continuous process designed toimprove communication, problem solving, and learning through the application of behavioral

science knowledge

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T-Group Training: group exercises in which individuals focus on their actions, how others perceivetheir actions, and how other generally react to them; participants often learn about unintended

negative consequences of certain types of behavior

Team Building: a process in which member of a team work together and with a facilitator todiagnose task, process, and interpersonal problems within the team and create solutions

Survey Feedback: data obtained from questionnaires; managers receive the data for their units andare expected to hold unit meetings to discuss problems

Training: a process used in OD to help managers and associates to gain skills and capabilitiesneeded to accomplish tasks in their jobs

Job Redesign: enlargement or enrichment of jobs; enrichment is the better method to enhancemotivation for effective problem solving, communication, and learning

Management By Objectives (MBO): a management process in which individuals negotiate taskobjectives with their managers and then are held accountable for attainment of those objectives

Supplemental Organizational Processes: processes in which associates and/or managers have ongoing meetings for the purpose of understanding and addressing important problems

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Exploitative Learning: learning how to more effectively use current knowledge Exploratory Learning: creating new knowledge and being innovative