Chapter 1 A Strategic Approach Approach to Organizational Behavior Basic Elements of Organizational Behavior Organizational behavior behavior - the actions of individuals and groups in an organizational context
Managing organizational behavior - focuses on acquiring, developing, and applying the knowledge and skills of people Strategic OB approach - people are the foundation of the organization’s organization’s competitive advantage - involves organizing and managing people's knowledge and skills e"ectively to implement the organization’s strategy and gain a competitive advantage Factors that determine the behavior and ultimate value of people in the organization 1. Individual ual ability to learn, self-managing, technical skills, personal characteristics, personal values # 2. Inte Interp rper erso sona nall # quality of leadership, communication, conflicts 3. Orga Organi niza zati tion onal al # culture and policies These factors produce 1. Producti Productivity vity - output output of of individu individuals als and and groups groups 2. Satisfact Satisfaction ion - feelings feelings that individual individuals s and groups groups have about about work/workpla work/workplace ce 3. Organiza Organizationa tionall Success - competi competitive tive advantag advantage e and financial financial performance performance Importance of Using a Strategic Lens 1. Senior Senior Managers Managers - also also called called strategic strategic leaders leaders think and act strategically strategically, , and use these skills to motivate people and build trusting # relationships to help implement the organization’s strategy # make strategic decisions for the firm # help middle managers define their roles and manage conflict # shapes internal norms and informal practices of the organization 2. Midd Middle le Man Manag ager ers s championing strategic ideas with senior managers and helping the firm remain adaptive # implementation of strategies by working with middle and lower-level lower-level managers # implementation # processes data and information to be used by the whole firm 3. Lowe Lowerr-lev -level el Mana Manage gers rs # coaching the firm’s associates # remove obstacles for associates and deal with personal problems # design jobs, team structures, and reward system 4. Associat Associates es - worker workers s who carry out the the basic basic tasks tasks Foundations of a Strategic Approach to Organizational Behavior How is OB di "erent from the disciplines? 1. It integrates integrates knowled knowledge ge from all of these these areas areas to understand understand behavior behavior in organiz organization ations s 2. Focuses on on behaviors and processes processes that help to create create competitive competitive advantage advantage and and financial success Instead of understanding human behavior, behavior, it aims to IMPROVE the performance of the organization
OB is an important field of study
1. There are complexities and subtleties in fully leveraging the capabilities of people. Common sense wont do 2. Managers must avoid seeking simple answers to resolve organizational issues 3. Integrates important behavioral science knowledge within an organizational setting and emphasizes application Definition of an Organization - Collection of individuals whose members may change over time, forming a coordinated system of specialized activities for the purpose of achieving specific goals over an extended period of time - Network of individuals, system, coordinated activities, division of labor, goal orientation, continuity over time regardless of change in individual membership The Role of Human Capital in Creating Competitive Advantage - An organization has tangible and intangible resources - Intangible resources - reputation of the organization, trust between managers and associates, knowledge and skills of associates, organizational culture, brand name, and relationships with customers and suppliers
Human capital - critical intangible resource - sum of skills, knowledge, general attributes of the people in an organization - use knowledge to gain competitive advantage The Concept of Competitive Advantage - when an organization can perform some aspect of its work better than competitors can or when it can perform the work in a way that competitors cannot duplicate Human Capital as a Source of Competitive Advantage 1. Value - the extent to which individuals are capable of producing work that supports an organization’s strategy for competing in the marketplace 1. Cost leadership strategy - creating low-cost products or services for the customer while maintaining acceptable or good quality (Kia) 2. Di"erentiating products/services through special features or superior quality (Lexus) 2. Rareness - extent to which the skills and talents of an organization’s people are unique in the industry - Nordstrom (highly educated, heroic service) 3. Imitability - extent to which the skills and talents of an organization’s people can be copied by other organization - Tacit knowledge - a type of knowledge that people have but cannot articulate. (BMW they just know. They have a feel of what is right)
So, CA should be valuable, rare, and di %cult to imitate Sustainable competitive advantage through people not only depends on the skills and talents of the people, but also how they are treated and deployed. Positive Organizational Behavior - nurturing individuals’ greatest strengths and helping people use them to their and the organization’s advantage - Emotional Intelligence - people with high EI have self-awareness, possess good social skills, display empathy, have strong motivation, and regulate their own behavior without the oversight of others
High-Involvement Management - senior, middle, and lower-level managers all recognize human capital as the organization’s most important resource Five characteristics of HIM 1. Selective Hiring - obtaining a large pool of applicants and undergoing rigorous evaluations (multiple interviews, tests, other tools). Applicants are selected not only through their technical skills, but also of fit with the company culture and mission 2. Extensive Training - thoroughly train new associates and managers to help them build skills for their positions (OJT, dedicated training exercises); also participate in structured discussions of culture and mission 3. Decision Power - associates are given the authority to make decisions a"ecting their work and performance. Can also participate in decisions made by lower-level and middle managers 4. Information Sharing - associates are given information concerning a broad variety of operational and strategic issues. Promotes collaboration, coordination, and high team performance 5. Incentive Compensation - associates are compensated partly on the basis of performance. (Individual performance, team performance, and business performance)
