Friday, December 12, 2003
Chapter 1 – Organizational Behavior and Management
Organizational Behavior – George/Jones

Opening Case – Sclumberger CEO Euan Baird has introduced IT and Communications technology at all levels of the company, and it has transformed the way the company does business. Access to information, Training and Virtual Teams, are benefits.

Organization – A group of people who work together to achieve individual and organizational goals.

Organizational Behavior – The study of factors that affect how individuals and groups act in organizations and how organizations manage their environments.

Group – Two or more people who interact to achieve goals.

Team – A group on which members work intensively to achieve a common group goal.

Insight 1.1 - NUMMI Forges Ahead – in 1983, GM and Toyota cooperated to reopen GM’s Fremont, CA plant, which had been closed in 1981 due to low performance and employee absenteeism and drug/alcohol abuse, and called it New United Motor Manufacturing, Inc. The companies used work groups to empower employees. A Manager’s job at NUMMI is defined explicitly in terms of providing workers with support. Toyota divided the workforce into 200 workgroups of 3-5 teams, led by a group leader; groups rather than individuals are responsible for the group’s work. A No-layoff policy, training, and worker control made NUMMI successful; in May 1997, it produced its 3-millionth vehicle and won the J.D. Powers Bronze Plant Award

Organizational Effectiveness – The ability of the organization to achieve its goals.

Management – The process of planning, organizing, leading, and controlling an organization’s human, financial, material, and other resources to increase its effectiveness.

- Planning – Deciding how best to allocate and use resources.
- Organizing – Establishing a structure of relationships that dictate how members of an organization work together
- Leading – Encouraging and coordinating individuals and groups.
- Controlling – Monitoring and evaluating individual, group, and organizational performance.

Manager – Any person who supervises one or more subordinates.

Top-Management Team – High-ranking executives who plan a company’s strategy.

Insight 1.2 - Big Changes at Pearson – Marjorie Scardino was named Britain’s Pearson PLC CEO. Pearson’s management was having trouble planning and controlling the activities of the widely diverse company; Scardino decided that Pearson would only a media and publishing company, and sold off its other businesses, like Madam Tussaud’s Wax Museum. Scardino created a new organizational plan to force collaboration using technology, and adopted an up-front and visible management approach.

Role – A set of behaviors or tasks a person is expected to perform. Roles of managers:

- Figurehead
- Leader
- Liaison
- Monitor
- Disseminator
- Spokesperson
- Entrepreneur
- Disturbance Handler
- Resource Allocator
- Negotiator

Skill – An ability to act in a way that allows a person to perform his or her role.

Conceptual Skill – The ability to analyze and diagnose a situation and distinguish between cause and effect.

Human Skill – The ability to understand, work with, lead. And control the behavior of people and groups.

Technical Skill – Job-specific knowledge and techniques.

Challenges for Organizational Behavior and Management

How to:

- Use new information technologies to increase employee creativity and organizational learning
- Manage human resources to give an organization a competitive advantage
- Develop an Ethical organizational culture
- Manage workforce diversity
- Manage organizational behavior when an organization expands internationally and operates at a global level.

Challenge 1: Using IT to Enhance Creativity and Organizational Learning

Insight 1.3 - How IT can Enhance Individual and Group Learning - DuPont used email and an intranet to manage communication and decision-making after losing a number of middle managers to early retirement.

Chiat/Day Advertising developed a computer network to promote collaboration between employees on creative projects. “Electronic Job Jackets,” replaced manila stacks and files.

Hewlett Packard and Canon used email and voice mail to collaborate on laser printers.

Challenge 2: Managing Human Resources to Increase Competitive Advantage

Competitive Advantage – The ability to outperform competitors. Done by:

- Increasing Efficiency
- Increasing Quality
- Increasing Innovation
- Increasing Responsiveness to Customers

New Ways to Increase Performance

- Reengineering – A complete rethinking and redesign of business processes.
- Restructuring – Altering an organization’s structure
- Outsourcing – Acquiring goods and services from outside the organization
- Freelancers – Independent individuals who contract with organizations to perform specific services

Insight 1.4 - John Deer Finds New Uses for its Employees – John Deere used teams and sophisticated computerized production equipment and training to better compete with Komatsu. Deere also sent production workers to meet with customers, and tied compensation to learning new skills.

Challenge 3: Developing Organizational Ethics and Well-Being

Ethics – Rules, beliefs, and values that outline the ways in which managers and workers should behave.

Well-being – The condition of being happy, healthy, and prosperous.

Insight 1.5 - The Valujet Airline Crash Disaster – The May 11, 1996 Valujet crash occurred as a direct result of unethical behavior of employees of SabreTech, who had pressured mechanics to leave safety caps off of and then label as empty two oxygen tanks, which ignited in flight.

Social Responsibility – An organization’s moral responsibility to individuals or groups outside of the organization that are affected by its actions.

Challenge 4: Managing a Diverse Workforce

Diversity – Differences resulting from age, gender, race, ethnicity, religion, sexual orientation, and socio-economic background.

3 Challenges of Diversity:

1) Fairness and Justice Challenge – Ethical problems arise when hiring and promoting: seniority is a factor, but many minorities are recent hires; actively recruiting and promoting minorities reduces job prospects for white males.
2) Decision-Making and Performance Challenge – A diverse work force broadens an organization’s decision-making perspective, but management must appreciate the contributions of a diverse workforce. Communication problems can arise in a diverse workforce, e.g. when younger employees supervise older employees.
3) Flexibility Challenge – Benefits, flex-time, job sharing, are among the approaches used by organizations to increase the well-being of a diverse workforce.

Insight 1.6 - Union Bank of California’s Approach to Diversity – Union Bank of California realized it could use diversity to its advantage; in 1996, Union Bank VP George Ramirez suggested tailoring marketing efforts to Hispanic customers. Subsequently, the bank targeted African-Americans, and changed its branches’ workforce to reflect the demographic make-up of the community in which it does business. CEO Takahiro Moriguchi said that when it searched for talent from a diverse group, the bank gained access to ideas, energy, and creativity that is as diverse as the human race itself.

Challenge 5: Managing the Global Environment

Main issues involved in global management:

1) Understanding organizational behavior in global settings
2) Planning, organizing, leading, and controlling become more complex for an organization as it expands internationally

Some organizations have rotated management to foreign divisions, as well as incorporate IT solutions.

Insight 1.7 - Improving Global Communication – Hitachi, HP, and IBM use teleconferencing to connect managers in different countries.

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