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2Organizational Culture and Diversity

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Learning Objectives

After reading this chapter and studying the materials, you should be able to:

Explain the nature of organizational culture. Identify ways to integrate new employees into an organization's culture. Discuss methods for building a more ethical culture and effectively adapting or modifying a culture when necessary. Evaluate the effects of the increasing level of diversity in today's business environment.

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Honest Tea was founded in 1998. ManuHK/iStock/Thinkstock

2.1 Understanding Organizational Culture In the 1980s, many Japanese companies began making serious inroads into U.S. markets, especially in the automotive and electronics industries. A variety of factors helped explain the change, including historical events, economic conditions, the legal environment, competitive circumstances, and the quality of the products sold by �irms such as Honda, Toyota, and Sony. Additional speculation began to emerge, suggesting that somehow the Japanese culture was part of the picture. The Japanese culture included elements of loyalty and shared commitment between companies and employees. Lifelong employment contracts were common. Many workers experienced a sense of "honor" from being true to the organization, regardless of status in the organizational hierarchy or the actual tasks performed. This common bond created a competitive advantage in terms of product quality and worker productivity.

Consequently, in the United States, organizational behavior and management researchers started studying the role that culture plays in the business community. The investigation led to some confusion. Some believed that the national culture of Japan was the driving force behind the competitive successes of businesses in that country. To others, however, it was the cultures of speci�ic companies that created the advantage.

The �irst distinction to be made when studying culture is the level of analysis—in a nation versus within a speci�ic company. This chapter examines culture at the company level. Organizational culture consists of a set of shared meanings and values held by a set of members in an organization that distinguish it from others. An organization's culture determines how members perceive and react to the larger environment (Becker, 1982; Schein, 1996). Culture determines the nature of an individual's experience in for-pro�it companies, nonpro�it, and governmental entities.

An organization's culture normally develops over a long period of time. Many times, it begins with what has been termed a "founder story" regarding the individual who created or started the organization. Examples include J.C. Penney, Sam Walton (Walmart), or more recently, Steve Jobs (Apple Computer). A founder espouses certain values and expresses the way he or she wishes to operate. Members follow, and the culture begins to develop (see OB in Action: Honest Tea for another example).

Over time, a culture may evolve as organizational leaders respond to the need for external adaptation and survival methods while at the same time coping with problems associated with internal integration (Schein, 1996). Patterns of behavior develop within the organization including what to wear, the type of language (formal, informal) used when addressing those of higher rank, the conduct of performing the actual task or job, and numerous other facets of organizational life that re�lect and express the values of the founder and those who follow.

Culture becomes a relatively �ixed organizational element re�lecting the organization's history. Top managers who understand the importance of a culture enjoy a major competitive advantage. Airbnb's co-founder and CEO Brian Chesky stated,

The thing that will endure for 100 years, the way it has for most 100 year companies, is the culture. The culture is what creates the foundation for all future innovation. If you break the culture, you break the machine that creates your products. (ReferralCandy, 2016, para. 5)

OB in Action: Honest Tea—A Strong Culture from the Beginning

Honest Tea began as a collaboration between co-founders Seth Goldman and Barry Nalebuff. Both had an interest in refreshment products that were less sweet than traditional drinks such as Coke or Pepsi. Tea provided a natural alternative. Nalebuff visited India, where he learned that the major teas sold for bottling by American companies were often brewed using the dust and fannings left after the quality tea leaves were used. Nalebuff and Goldman concluded that tea brewed with actual tea leaves would taste better and enjoy a natural advantage in the marketplace. The name Honest Tea resulted from the idea that bottled teas brewed with real tea leaves had a better, more genuine (or honest) taste (Honest Tea, 2016).

From the beginning, the company based operations on a passion both cofounders held regarding social responsibility. The company's mission statement is "Honest Tea creates and promotes delicious, truly healthy, organic beverages. We strive to grow with the same honesty we use to craft our products, with sustainability and great taste for all." The concept drives every company activity, from the manufacturing process to marketing programs, biodegradable tea bags, organic ingredients, and community partnerships. Efforts to become more sustainable led to the development of plastic bottles that are 22% lighter than most versions, saving tons in waste.

Honest Tea's partnership programs seek out circumstances in which an entrepreneur in a struggling region can produce new �lavors and additives. Contracts have been developed with Native American groups in the United States and farmers in Thailand who grow mangosteen, an antioxidant ingredient. Goldman and Nalebuff believe in helping others through commerce.

The result, in terms of an organizational culture, is a company �illed with employees who are proud of what they do and how the organization operates. Company involvements include "plant a tree" efforts and support of the Susan G. Komen cancer foundation. The strong emphasis on sustainability, responsibility, and high-quality products has taken this

small operation to a thriving and successful business across the United States (Honest Tea, 2016).

In 2011, Honest Tea was acquired by Coca Cola. Conscious Company Magazine (2016) noted that the organization stayed true to its mission and values. Further, Honest Tea has been left to operate largely as an independent unit within the bigger corporation, thereby supporting the company's original mission and value statements, and maintaining the organization's internal culture.

Re�lection and Application Questions

1. Can most companies develop a similar mindset regarding social responsibility and succeed at the same high level? 2. What kinds of employees would naturally �it in the Honest Tea organization? 3. Can you think of situations that might threaten the culture of Honest Tea? If so, what are they?

Culture consists of the symbols, rituals, language, and social dramas that highlight organizational life, including myths, stories, and jargon (Smircich, 1984). Symbols include the golden arches at McDonald's, the Intel tune played in commercials, a Star of David in a synagogue, or the Republican elephant. Rituals include joining ceremonies and commencement activities, such as the Doctorate of Hamburgerology granted to graduates of the McDonald's manager training

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Organizations that have strong cultures tend to have employees who identify with the organization's mission and with each other, potentially leading to higher productivity.

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program, Hamburger University. Language includes company-speci�ic acronyms and terms: In the world of Disney, a crowd at a theme park is an "audience" and a work shift is a "performance." Social dramas emerge from promotion decisions, termination decisions, and disciplinary actions.

Culture also consists of shared meanings associated with these elements. For instance, the term "no rules" has a shared meaning among employees at Outback Steakhouse. The organization emphasizes having fun and creating a positive and pleasant environment in which customer needs come �irst (no rules about altering the menu choices, for example). Further, shared meaning arises from consistently mentioned themes of inclusivity, diversity, team trust, and communication (Bloominbrands.com, 2016; Sullivan, 2005). Culture combines the philosophy of the founder of the �irm with beliefs, expectations, and values shared by members.

Organizational culture has several dimensions. These include dominant cultures and subcultures, strong (and weak) cultures, along with other functions and layers.

Dominant Cultures and Subcultures

In nearly every society, a dominant culture guides the daily activities of citizens. The same holds true for individual companies. The dominant culture articulates the core values shared by a majority of an organization's members. When the company interacts with the public, the dominant culture is often readily noticeable. As an example, the dominant culture at Southwest Airlines leads employees to cooperate with one another and to have fun while doing so. The Outback Steakhouse chain tried to instill the same type of shared values using the "No Rules" motto for many years. In essence, the dominant culture becomes the organization's personality.

As a company grows in size, subcultures often emerge. A subculture (a culture that differentiates a subgroup from the larger group to which it belongs), in an organizational context, arises from the common problems, situations, and experiences that a set of members face. In a freethinking and fun-loving company such as Nintendo, which develops handheld games, the dominant culture extends to every member. One department in the company, quality control, still must adhere to carefully managed production techniques or the games will have defects and will not work. It would not be surprising to �ind that members of the quality control department have an additional set of values that differ somewhat from the overall organization.

Many times, subcultural values mesh with or contribute to those of the dominant culture. A subculture should not automatically be considered as a negative force, or counter-position to the dominant culture. In the case of Nintendo, for example, stricter adherence to safety and quality protocols supports the delivery of the fun-loving games others create.

At the other extreme, there may be times when an "us versus them" mentality emerges as the subculture becomes more established and some values con�lict with those professed in the dominant culture. Such may be the case when a subculture emerges around a new technology that may change the entire organization but cost some members in terms of position and power, leading to resistance from some and support from others. Managers are advised to monitor the relationships between the dominant culture and any subculture that arises over time.

Strong Cultures

Some dominant cultures are more pervasive than others. A company with a strong culture features members who intensely hold and readily share the organization's core values. Strong cultures are readily evident in military and religious organizations with rich histories and traditions.

Strong, dominant cultures may even be found in Internet companies. The rapidly growing Internet company Zappos.com provides training focused on the �irm's 10 core values, which include "Deliver WOW," "Pursue growth," "A little weirdness," "Be passionate," and "Be humble." Founder and former CEO Tony Hsieh would seek out individuals with a passion to provide quality customer service. To create and maintain that culture, the workplace includes free food, substantial interactions between employees, and constant encouragement to have fun. New employees begin their training in the call center serving customers, even when the worker will eventually play a different role, such as order ful�illment, inventory control, or �inance and accounting. During the training sessions, Hsieh offered to "buy out" anyone who did not believe he or she would �it with the company. Payments, which were rarely accepted, ranged up to $2,000 (Durst, 2006).

In organizations such as Zappos.com and Honest Tea, a strong dominant culture generates several bene�its. Members of these companies often express high levels of agreement with and commitment to the organization's mission. Employees and employee groups are often tightly knit and cohesive and remain loyal to the organization. In practical terms, companies with strong cultures often exhibit lower levels of turnover (few people quit or are �ired); the employees offer statements of loyalty to other employees and to people outside of the company. The net results can be improved productivity and a positive, social work atmosphere, which in turn may entice quality individuals to seek employment with the company.

By inference, other organizations would have what might be characterized as "weak" cultures. Employees or members may not be made aware of key organizational values or may simply not buy into those values. Some researchers conclude that a weak culture may be associated with a lack of employee focus and lower organizational performance (Gordon & DiTomaso, 1992); however, others suggest an overly dominant culture can make an organization less democratic and more inclined to mind guarding against dissenting opinions or approaches (Parker, 2000).

Managers should be aware of the potential negative effects of a culture that has become too strong as to be overwhelming, or one that is too weak to generate some of the potential bene�its a culture can offer.

Functions of Culture

Organizational culture can play a key role in an organization's well-being. It can improve the organization's functioning as well as enhance the employment experiences of individual workers. Several potentially positive functions may be played by an organization's culture.

Culture Makes the Organization Distinct Culture creates distinctions between organizations. These unique features attract some people to join a company and encourage others to go elsewhere. They extend to customers, other organizations, and even the government. In the insurance industry, A�lac developed a highly visible reputation for being family friendly and welcoming to members of minority groups. The company's culture sets it apart from other insurers.

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Company Values: Zappos

Zappos CEO Tony Hsieh discusses the company's top values and how the leadership ensures that those values are represented in the company's workforce.

Critical Thinking Questions

1. Should new employees be given time to adjust to company culture, or do you agree that those who do not embody the culture ought to be eliminated early on?

2. Do Hsieh's methods/values differ from your current or past workplace cultures? If so, how?

Culture Creates a Sense of Identity If you speak to a person in uniform and refer to him or her as a "soldier," there will be instances in which you will be quickly corrected with, "I'm a Marine." Marines view themselves as different from "ordinary" soldiers. The same sense of identity can be found in a variety of organizations. Stronger cultures lead people to incorporate the organization's core values into their own personal value systems.

Culture Builds a Strong Social System Culture has been compared to social glue holding an organization together. When people join companies, they learn how to promote themselves and become more fully aware of how an organization operates. The social system explains the "rules of the game," including what are acceptable and unacceptable behaviors.

Social dramas occur when norms and rules have been violated. Norms are the rules of behavior that guide members of an organization. Norms apply to levels of effort given on the job, to the willingness to share information and help others, to manner of dress, and even to language. Rewards and promotions accumulate to those who follow the rules and play the game as expected (O'Reilly & Chatman, 1996).

Culture Helps Employees "Fit In" By comprehending how a culture operates, an employee who wishes to remain will seek to �it in. The person will learn company lingo and, over time, more strongly accept the organization's core values. Culture plays a major role in guiding the behaviors of members of a company. Understanding and adapting to a culture can assist in building a successful career.

Layers of Culture

Just as people have layers in their personalities, layers may be found in the culture of an organization. Some of the characteristics of an organization's culture can be readily observed, while others remain subtle or hidden. Three levels of culture interact with one another and in�luence behaviors in organizations: observable artifacts, espoused values, and enacted values.

Observable Artifacts Artifacts include the physical signs of an organization's dominant culture. A company such as Walmart that refers to employees as "associates" on name tags states a value. Other expressions of observable culture include displays of awards such as "employee of the month," specially designated parking spaces, the manner of dress exhibited by employees, and company ceremonies. A color associated with a company (IBM as "big blue") is an observable artifact, as are items such as the mouse ears found in Disney operations.

The University of Hawaii football team under former head coach June Jones exhibited traditional elements of culture and a unique set of observable artifacts. Traditional cultural elements included trophies on display for individuals and teams in the training facility, signs on display stressing the importance of teamwork, and practice rituals that are the same for football teams across the country. The team's observable artifacts are found in its inclusion of Hawaiian culture. The coaches wear Hawaiian shirts during games to re�lect the local culture.

Espoused Values Most organizations have guideposts that express the primary beliefs of the leadership group. Espoused values are the explicitly stated values and norms that are found in organizations. The espoused values of Honest Tea include an emphasis on sustainability and a commitment to helping communities. Espoused values are aspirations rather than outcomes. At times, the ambitions are not achieved. When a company's leadership team expresses the desire to hire, train, and promote a more diverse workforce, an espoused value exists. When the same company does not follow through with hiring decisions dedicated to that value, it remains simply an aspiration.

Enacted Values The values and norms exhibited as employee and managerial behaviors are enacted values, or readily observable acts that re�lect the organization's culture. As an example, customer service phone representatives at Zappos.com receive constant reminders about the value of a quality interaction with the company. As a result, when a customer calls looking for a speci�ic pair of shoes, and Zappos.com does not have the item in stock, the service representative provides the names of other companies that might have a pair. CEO Tony Hsieh (2010) believed that, even though a sale has been lost by not trying to entice the customer to switch to a different pair of shoes, the long-term loyalty will be worth far more. Employees that enact that value achieve access to greater rewards in the Zappos.com system.

The combination of observable artifacts, espoused values, and enacted values can create role clarity for an employee. Role clarity exists when a person has a clear understanding of his or her function in the organization and how to complete all assigned tasks. Role clarity means, "I know what I'm supposed to be doing." The reminders that come from seeing observable artifacts, hearing espoused values, and carrying out enacted values generates a greater sense of clarity.

Bene�its of Positive Cultures

Company leaders enjoy distinct advantages when an organization exhibits a positive culture. Positive cultures are democratic and progressive. They nurture and value the contributions of members. Positive cultures tend to be more �lexible and adaptable, making the organization better able to meet the challenges of a dynamic world (Benn, 2011). Organizational leaders have vested interests in trying to build positive cultures over time. This is especially true in dynamic industries, such as high-tech, entertainment, services, and others.

Some studies suggest that culture can play a larger role in employee motivation than pay (Gifford, Zammuto, Goodman, & Hill, 2002). Organizational culture can help managers reach their goals while helping employees adapt to company life. The bene�its of a positive culture include stability, employee self-management,

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A positive work culture provides employees with a sense of comfort and security that promotes stability and successful working relationships.

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and assistance in integrating new employees into the workplace.

Stability In a positive culture, certain elements remain constant and reliable even in an ever-changing world. Sprint and Verizon operate in a rapidly changing and evolving industry. A positive culture within these corporations, which emphasizes interdependence of various locations along with a sense of belonging, might be helpful in such a turbulent environment.

Employee Self-Management In a positive culture, members may be willing to set aside personal interests to help the organization succeed. Self-management originates at two levels. First, strong, positive cultures create certain norms. Failure to follow these norms results in social pressure to conform; those who do are accepted and those who do not might encounter caustic comments or ostracism from peers. If the norm imposes a ban on profanity, for example, someone who constantly violates the rule faces rejection by peers.

The second level of self-management comes from within the person. Most people have a natural desire to be accepted by coworkers. Many go a step further and wish to please others. Abiding by cultural constraints can help achieve these goals.

The bene�its to managers include less time enforcing the company's discipline system. It becomes easier to complete performance appraisals in a positive fashion, by concentrating on work-related behaviors rather than social activities. A positive environment in which employees exhibit self-management also invites better relationships between supervisors and subordinates.

Integrating New Employees Positive cultures often mean that workers feel comfortable and secure. The "new guy" is not threatening; thus, incoming employees are more readily accepted and trust can be built more quickly. The bene�it to management will be less time training and socializing new workers. The bene�it to the worker will be a much more comfortable and pleasant transition into the new workplace role. This bene�it receives greater attention in the next section of this chapter.

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With leadership that places employees �irst, customers second, and shareholders third, Southwest is a primary example of an organization that is team oriented.

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2.2 Transmitting Culture Culture is transmitted in a variety of ways. Meetings, mailings, and other communications express cultural values, such as the statement "Quality is Job 1," a pervasive phrase repeated in Ford Motor Company paperwork. Role modeling and coaching processes instruct employees about the �irm's core values. One viewpoint of culture suggests that seven characteristics, as a group, express the essence of an organization's culture (O'Reilly, Chatman, & Campbell, 1991):

1. Degree of encouragement of innovation and risk-taking. 2. Attention to detail and precision. 3. Outcome orientation. 4. People orientation. 5. Team orientation. 6. Level of aggressiveness and competitiveness. 7. Emphasis on stability and the status quo.

The degree of encouragement of innovation and risk-taking identi�ies an organization's leadership philosophy regarding such activities. In companies where risk- taking is punished or ignored, the culture takes on a different hue from one in which innovative successes are hailed and even failed attempts receive reassurance and recognition. Consequently, the roles played by members of an organization that does not embolden innovation will be different from the roles played by members of an organization that encourages original thinking and actions. The organization's reward system normally re�lects which approach �its with its culture.

Attention to detail and precision is re�lected by management's attitudes toward methods used to complete tasks. As a simple example, the degree of tolerance for defects and returned goods in�luences supervisory processes and worker attitudes as items are made or services are rendered. A company that provides painting and other interior work might emphasize low-prices in bids and the buyer might expect lesser quality as a result. This in turn would affect how employees perform their jobs and feel about company expectations.

Outcome orientation refers to a focus on results rather than methods. For example, salespeople may be encouraged to "aggressively" attract new customers; however, the actual methods individuals chose to achieve that goal may differ. In essence, attention is given to the outcome rather than any speci�ic process or technique.

People orientation appears when organizational leaders make it clear that valuing employees is a key part of the company's culture. Employees quickly pick up on situations in which management's appreciation of them is genuine and those in which they and their work are only paid lip service. In �irms where management truly places value on employees, those seeking to move up in the ranks quickly learn that such an orientation is necessary and will be noticed.

A team orientation will also be transmitted by those in charge and at higher ranks. Firms such as Zappos.com, Southwest Airlines, and Costco make it clear that not only are individual people respected, but also that teamwork is expected and rewarded. Consequently, cultural norms regarding team-oriented behaviors emerge, such as "pitching in" and helping in dif�icult situations and �inding ways to place the good of the group above one's own interests. Further, doing so will be noticed and rewarded by higher level managers.

Aggressiveness and competitiveness dominate the cultures of some organizations. Many legal �irms, for example, have been shown to favor the most aggressive and competitive lawyers when offering partnership and other bene�its. A competitive culture does not necessarily mean that managers will always fail to recognize and appreciate employees and team-related efforts. An individual can be competitive and a team player at the same time. Conversely, an overly-aggressive individual who hurts the team and the overall organization will also be noted by management and often counseled that such behaviors do not �it with the company's goals.

A cultural emphasis on stability and the status quo may favor some organizations and work against the interests of others. For many years, the banking industry was typi�ied by a strong emphasis on the appearance and maintenance of the status quo, with impressive buildings and well-dressed employees inside. When pressures from competitive forces through products such as online banking and other sources emerged, the priority of maintaining the status quo may have slowed the ability of some banks to effectively respond.

In all these instances, cultural transmission takes place as part of the socialization process when an employee or person joins and learns about a company or organization. Organizational stories and other activities help transmit and reinforce culture to members over time. Managers reinforce cultural values through public statements, through advice and counsel to individual workers, via performance appraisal ratings, and through the formal and informal organizational reward systems.

Socialization Phases

Within the �ield of organizational behavior, socialization is the process of learning, internalizing, and assimilating an organization's values. Part of socialization includes learning the organization's culture. Socialization programs range from simple interactions between employees to highly developed systems. For example, Sanyo's orientation program places new employees into circumstances in which they live and eat together for 5 months at a company-sponsored resort. Among the items new workers learn are how to dress, speak, and even groom themselves. The company intends to develop kaisha senshi, or corporate warriors, through these efforts (Frujstuck, 2007).

The organizational socialization process includes three phases (Feldman, 1984), which are displayed in Table 2.1. The �irst, anticipatory socialization, involves the learning that takes place prior to joining an organization. The �irst stage may also be referred to as pre-arrival. Potential applicants may learn about a company from members of their families, from encounters at school, from social media, or from visits with members of a profession. After receiving negative publicity following the sale of tainted food items, the leadership of the Chipotle restaurant chain responded by enacting an active program to emphasize careful purchasing programs for food items and cleanliness by all employees and managers (Vinjamuri, 2015). This emphasis takes place during recruiting and selection processes for new employees, or during the pre-arrival stage.

The second stage of organizational socialization, the encounter, takes place as the individual learns more about the company. The worker begins to compare his or her expectations about the �irm's culture with reality. Employee training programs are available to emphasize new aspects of a culture as workers learn their jobs. Training extends to the supervisor in charge as well as the human resource department.

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The third stage, change and acquisition, also called the metamorphosis stage, occurs as the employee masters the skills and role performance needed to succeed in the organization. The change may include moving personal values and working methods closer to those imposed by the organization. At that time, observance of role models and coaches becomes a powerful in�luence. Zappos.com CEO Tony Hsieh had his of�ice cubicle strategically placed at the center of the work zone. The message was clear: He valued his peers and wished to be accessible. Top managers can seek to change a culture by providing visible messages about what must be done.

Table 2.1: Stages of organizational socialization Stage New employee action or evaluation

Anticipatory socialization Anticipating new employer expectations Anticipating employer needs for skills and abilities Anticipating employer's sensitivity to one's needs and values

Encounter Seeking role clarity Managing group interactions Balancing life and work

Change and acquisition Completing role demands as required Mastering tasks Internalizing cultural norms and values

Forms of Socialization

Individual companies have personalities, and each responds to its environment in different ways. Internal functions are managed in various ways as well. Company leaders can proactively create and �ine-tune the socialization process. Doing so involves a series of decisions about how to engage with new employees (Van Maanen, 1978; Schein, 1990).

Formal Versus Informal Socialization Formal socialization involves a new employee engaging in a clearly designated, separate socialization program. Normally formal socialization and learning take place somewhere away from the job; as part of orientation or new employee training systems. Informal socialization and learning occur as the employee receives attention from coworkers and supervisors. Questions are answered and suggestions are given as to how the new employee can effectively �it in. Formal and informal socialization and learning do not present an either–or scenario. Both can occur as the person enters the organization.

Individual Versus Collective Socialization Individual socialization takes place as a person receives private instruction or training. Collective socialization occurs in groups. The bene�it of individual attention will be personalized instruction tailored to the person's unique needs. The advantage of collective socialization can be that new employees reinforce each other as the program proceeds.

Fixed- Versus Variable-Advancement Socialization Fixed-advancement socialization involves all employees spending the same amount of time on each stage of training. Promotions or advancements to additional new stages occur on a �ixed timetable. Variable-advancement socialization tends to be goal- or objective-based. After an employee completes a stage of training and adjustment to the company, the individual moves on to the next goal. Variable-advancement socialization works well when training individuals who require additional or special attention. Fixed-advancement systems are used in circumstances in which all employees are expected to learn and adjust in comparable time frames.

Serial Versus Random Socialization Serial socialization places employees with various staff members for speci�ic training programs. That way, the new workers learn from experts. Random socialization occurs when new employees are not paired with speci�ic staff members. Instead, individuals seek advice and training as they see �it. Serial socialization will be used when speci�ic skill sets or knowledge bases are required. In that way, the company has greater assurance that new employees have received proper training. Random socialization matches employees with generalists who perform numerous tasks or carry out a variety of activities.

Divestiture Versus Investiture Socialization Divestiture socialization requires "unlearning" of personal characteristics and habits to �it in with others in the organization. Military training involves the classic divestiture approach. Investiture socialization assumes the individual possesses unique traits and characteristics that may be of value to the organization. One can inject his or her own personality into the job.

Some of the aforementioned forms of socialization do not represent mutually exclusive approaches. Formal and informal socialization can both take place. Employees can be socialized individually at times and collectively at others. Socialization can occur serially and randomly.

Two of the methods listed above involve choices. Employees can receive either �ixed or variable socialization programs. Employees will be socialized either through divestiture or investiture.

As most human resources managers will attest, �irst impressions matter. New employees will quickly discover whether they have made appropriate work choices. Some will discover the �it cannot and will not exist. They can then move on to more favorable working situations.

Mentoring and Socialization A mentor is an individual who assists a less-seasoned employee. Mentoring involves several activities, including listening to and reviewing ideas, introducing the mentee or protégé to key individuals who might offer help, showing the person how to act and perform the job, and providing emotional support. Mentoring systems can be formal or informal. Formal systems assign mentors to individuals. Informal approaches allow the relationships to form naturally.

A portion of mentoring involves interpreting the organization's culture to the protégé. Other activities include providing exposure and visibility to the mentee, protecting the individual from internal threats and competitors, helping with assignments, and providing friendship.

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Learning a company's stories can help employees become familiar with aspects of the company's culture, such as dualities, equalities and inequalities, and events.

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Individuals with mentors have an important career advantage. Some sources suggest developing sets of mentors, or mentor networks. To do so involves taking the time to develop close relationships with diverse organizational members who can offer assistance and guidance. Showing appreciation for the counseling and support given helps continue a strong mentor– protégé relationship.

The socialization process represents a key opportunity to develop quality employees. It can also be used to support organizational change and a more ethical culture, as will be discussed later in this chapter. Effective managers pay attention to all aspects of the socialization process.

The Role of Stories

One important way members (especially managers) transmit culture is through stories and organizational myths. As noted earlier, culture often begins with and relies on stories and myths about the company's founder and its current leading �igures—the �irm's heroes and heroines (Gordon, 1993; Schein, 1985). As part of the recruiting process, prospective employees are often told about the organization's philosophy, which—as is the case with Honest Tea, Walmart, Southwest Airlines, and other companies—can include the organization's origin story.

Stories can also take shape in the answers employees hear to their questions. As one begins working in a company, asking questions about the organization is common. Many of the questions will be about cultural issues, including what is important and why. Some of the more common questions new employees ask include the following:

Which rules are important? What will get me �ired? Will the company help me if I must move? How does the company view risk taking? Can the little person rise to the top? Is the big boss human?

Obviously, the questions will probably not be stated in these exact words, but in general, employees want to know if top management is approachable. They want to understand the discipline system and where the "line" is regarding termination. They ask about the amount of support they will receive and whether the company regards fairness and equality as important values. The answers they receive take the form of stories, which serve several purposes.

Stories Explain Dualities Stories present the most positive and negative versions of answers to questions about culture. When questioning whether the leaders at the top are approachable (Is the big boss human?), a new employee might receive two answers at either end of the spectrum:

One person's account: "I saw this guy say 'hello' to the CEO, and he bit his head off !"

Another person's account: "I saw this guy in the parking lot with a �lat tire, and the CEO stopped, took off his suit coat, and helped him put on the spare."

Both stories may be true. In the �irst instance, the CEO was in a bad mood and in a hurry. The storyteller may not know that the CEO later found the same employee and apologized profusely.

Stories Explain Equality and Inequality Stories also explain perceived issues of equality and inequality. When new employees ask whether there is room for growth in the organization, they may again receive two entirely different responses, depending on whom they ask:

"Sheila has been our best accountant for the past 10 years. Three different times she applied for the accounting manager job and got passed over. Some guy always ended up getting the job."

"Jose Morales is such a cool dude. Everyone likes him. No one was surprised when he got promoted, even though he had only been here a couple of years."

Stories are used to explain when employees have been treated fairly and when they have not.

Stories Explain Company Events and the Past Stories explain social dramas, such as why someone was terminated. A story has been told about the president of a small university in the Midwest, who, despite warnings by several people, including a weather expert, decided to hold graduation ceremonies outdoors. As the commencement program began, a massive rainfall, complete with powerful lightning, interrupted the proceedings and drenched the entire audience. The next day the Board of Regents terminated the president. As the story goes, "He was �ired for holding graduation in a thunderstorm." In truth, the story provides a portrayal of an authoritarian leader who wouldn't listen to good advice.

Stories Create and Emphasize Heroes and Heroines Founding stories create mythologies about the entrepreneur that began the company. An organizational hero or heroine provides the ultimate role model for employees to follow. A common hero story told about Walmart founder Sam Walton focuses on his "everyman" characteristics. Walton was famous for driving to stores in an old pickup truck and pitching in to help associates unload delivery trucks and stock shelves. As the years unfold, undoubtedly hero stories will be told about Mark Zuckerberg's Facebook founding adventure as well as Twitter's Biz Stone, Jack Dorsey, Evan Williams, and Noah Glass.

Stories Help Identify Cultural Forms Studies of organizational culture suggest that four categories may exist. Each one dictates differing behaviors to members. The four forms are displayed in Table 2.2. Stories told within the organization help transmit these characteristics to new members. Outside observers may also be able to somewhat understand the culture present in the organization, which might in turn in�luence the decision to apply for a position with the company.

Table 2.2: Forms of culture Name Characteristics

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Clan Internally focused, family-type, high levels of collaboration, emphasis on involvement, commitment, consensus, decentralized management

Hierarchy Internally focused, driven by strong control mechanisms, standardized rules, formal procedures, centralized management, stable, in�lexible

Adhocracy Externally focused, values �lexibility, emphasis on innovation, encourages risk taking, decentralized management

Market Strong external focus, driven by competition, values stability and control, customer-centered, centralized management Source: Adapted from K. S. Cameron, R. E. Quinn, J. Degraff, & V. Thakor (2006). Competing values leadership. Northampton, MA: Edward Elgar.

Employees in a clan culture, such as Southwest Airlines, enjoy positive relationships with peers. Employees in a hierarchy culture, such as a police force, quickly learn that rules and procedures are important. In an adhocracy culture, trying something that doesn't work out will have different consequences than it would in other companies. Many Silicon Valley companies exhibit adhocracy cultures. In a market culture, such as automobile or insurance sales, pay raises, promotions, and rewards are likely to be based on visible performance measures related to sales and customer service.

Over time, employees learn about their company's culture based on what is rewarded, and what is punished. Questions, answers, myths, stories, and jargon all become part of the organizational experience. When the person matches the organizational type, the �it produces the best chances for individual success.

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Despite many public scandals, academic institutions across the country struggle to adequately address sexual harassment and assault claims.

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2.3 Changing an Organization's Culture "We need to change the culture around here." This type of statement is often made when a new CEO or president arrives. Declarations such as these are more common during a transition in which a crisis has occurred or is taking place. Classic stories of cultural change include the efforts of Lee Iacocca at Chrysler in the 1980s and Jack Rowe at Aetna in the early 2000s. Iacocca had to convince an entire corporation to overhaul all of its product lines by eliminating nearly 500 Chrysler products while designing new types of cars featuring front-wheel drive and a smaller chassis to meet the needs of a changing automotive environment. Rowe had to make peace with a series of frustrated health care providers and restore morale in a company that was losing money every day. Both succeeded by changing the cultures of their organizations.

Two sets of circumstances typically demand cultural change. The �irst is when an organization has engaged in irresponsible or illegal activities and a more ethical culture must be built. The second type of pressure for cultural change results when a crisis of some sort, including a dynamic marketplace, a major error, or damage caused by an uncontrollable force, such as an economic crisis, takes place.

The following OB in Action box describes how an unethical culture creates signi�icant problems for individual employees, the overall institution, and even the larger society in which the organization operates.

OB in Action: Sexual Harassment in Academia

Unethical cultures may be found in areas other than a for-pro�it workplace. A CNN report (Ganim, 2016) examined instances of sexual harassment in the academic world, particularly in the �ield of astronomy. Alessondra Springmann, a rocket scientist at the University of Arizona, noted that sexual harassment extended beyond her own �ield:

We see it in anthropology, we see it in philosophy, we see it in physics, we see it in the humanities, we see it in the social sciences. We see it in engineering in particular. Astronomy just happened to be, sort of, the �irst to get attention. (para. 5)

Apparently, the problem remains pervasive. A survey indicates that 71% of respondents reported they had been sexually harassed while engaged in �ield work, and 25% said they had been sexually assaulted. U.S. Rep. Jackie Speier of California sponsored legislation that would force institutions receiving federal grant money to report harassment investigations. She argued that such a move is necessary because university leaders continue to fail to report the actions of their faculties.

These cultures create extra hardships for female students and faculty. A woman who accuses a male faculty member of such an unethical act would likely have to abandon her research and years of hard work. As one person noted in the report, doing so can derail a career before it even starts.

Unfortunately, the cultures of many institutions tend to protect older, tenured male faculty members, even when younger, brilliant females report incidents. Over time, this can drive women away from careers in STEM (science, technology, engineering, and mathematics). This cultural problem can be made worse by institutional factors, such as tenure, which make it dif�icult to terminate a predator, especially one who has received substantial funding for research grants. Without an institutional response, this tragic problem may continue to remain unresolved.

Re�lection and Application Questions

1. How might this institutional cultural problem be transmitted to new male and female students and faculty? 2. What potential long-term effects might result if such a hostile environment culture continues to persist at a university? 3. How could university governance (president, regents, faculty senate) work to change this cultural �law?

Building a More Ethical Culture

The past two decades have witnessed numerous dramatic episodes of unethical individual and corporate activities. The 2008 Bernie Madoff Ponzi scheme scandal, the unethical activities in �inancial markets, the car safety concerns from unexpected acceleration in Toyota automobiles, and the 2016 Wells Fargo scandal regarding employees creating false accounts serve as examples of the devastating impact of short-sighted, unethical actions.

Many company leaders have concluded that an ethical culture provides guidance to employees and managers that will keep a company on a better course. Socially responsible and ethical companies minimize negative actions such as cheating on taxes, selling defective products, discriminating against various employee groups, and breaking other laws. Socially responsible and ethical companies engage in positive actions including fair treatment of workers, community relations efforts, and other altruistic activities.

The bene�its of ethical cultures include employee loyalty and commitment, a better standing in the community, and greater compassion from customers and the government. For these reasons, organizational change dedicated to building an ethical culture and environment is a worthwhile managerial goal. Many of the methods to change a culture overlap with tactics used to build an ethical culture.

Visible Statements of Commitment To build a more ethical culture, leaders must put the goal in writing. Many organizations have updated company mission statements to include clauses about the importance of social responsibility, ethical behaviors, and closely associated goals such as sustainability. Such pronouncements deserve highly visible platforms, so that employees and outside publics are made well aware of the intention to change or improve the company's ethical culture. Two examples include the following:

"We are committed to offering high-quality, ethically purchased and responsibility produced products." — Starbucks

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"We envision a community of responsible and educated citizens who are environmentally conscious, practice social responsibility in their daily lives and inspire others to do the same." — Shangri-La Hotels and Resorts

Establish Ethical Expectations An organizational code of ethics provides one venue for clearly communicating ethical guidelines. The standards can be based on those established in professional ethical codes, such as those followed by physicians, accountants, and academics. Company codes should spell out key values and ethical rules speci�ic to the type of organization. The AT&T code of ethics contains the following elements, which are common to many such documents:

Values statement prioritizing honest and ethical conduct Con�licts of interest statement Disclosure requirements Compliance requirements Reporting and accountability statement Corporate opportunities statement Fair dealing commitment Guidelines outlining the protection and proper use of corporate assets

Provide a Positive Role Model Company executives are closely watched by members of the organization. Those who cut corners and become involved in questionable actions set a standard of behavior that will be detrimental to the organization. Open lines of communication and transparent management practices communicate the importance of ethical actions.

Cultural role modeling takes place when leaders address both internal and external publics. These individuals overtly or subtly indicate the values of the organization to which they subscribe. As an example, consider the public persona of Indra Nooyi, CEO of PepsiCo. She has achieved substantial recognition for her caring attitude, her insistence on diversity in the organization, and her willingness to innovate. All the while, she occasionally wears traditional Indian attire to work and encourages employees to participate in "bring your child to work"-type company events. Her new interests in sustainability as well as turning a "snack food" company into one offering healthy alternatives for snacking has continued to resonate with a wide audience (Useem, 2008; Snyder, 2015).

Reward Ethical Acts and Punish Unethical Acts Ethical and unethical actions take place at the individual and group levels. At the individual level, the performance appraisal process provides the opportunity to offer feedback about a person's conduct. Rewards including pay raises and bonuses for meeting ethical standards encourage continued positive behavior. Punishments, which can range from sanctions such as �ines to being sent home without pay, or termination in extreme cases, send a powerful message.

Groups engage in unethical activities such as collaboration on padding expense accounts and mileage vouchers, harassing or hazing targeted employees, and "time theft," where goo�ing off or sur�ing the Internet are viewed as acceptable activities. To combat such problems, groups may be sanctioned as a whole, with each member receiving a punishment commensurate with the person's involvement. Groups that continue to violate ethical codes should be broken up, or their leaders may need to be terminated.

Provide Help Many organizations provide ethical counselors to handle inquiries. Employees must not fear retribution for approaching these individuals. Smaller companies can offer access to what are essentially ethics hotlines, where employees can present ethical dilemmas and seek advice. Lighthouse Services, The CorporateCounsel.Net, and NAVEX Global, among others, provide ethics hotlines.

As with any other aspect of culture, breaking down what was presented and building in something new will take time. Top-level managers that truly want an ethical company must remain committed to these actions to create cultural change.

The Role of Human Resources As has been shown already in this chapter, the socialization process begins prior to a person joining an organization. Consequently, the role of the human resource (HR) department becomes a key element in maintaining the culture and attracting the best individuals to join. The transmission of culture takes place in recruiting programs, job descriptions, and other informational programs (public relations efforts, for example) that can and should transmit what an individual might expect when seeking employment with or joining a company or organization. It continues as the person goes through the selection process, where effective HR managers once again signal what to expect from the culture of the organization. Then, as the individual receives on- and off-the-job training for a job or role, socialization moves into a more prominent position. Consequently, the top-level management team receives bene�its when it clearly and consistently establishes cultural expectations to the HR department, which in turn passes those values along to applicants and new employees.

Tactics for Changing a Culture

Changing a culture takes time and a great deal of deliberate effort. Top managers can utilize a series of tactics in the attempt to alter a culture. Each can be designed to "upset the applecart," or change the status quo. Note that changing a culture will be extremely dif�icult and cannot be accomplished overnight. It will take time and persistent managerial efforts to succeed.

Top Management Pronouncements Cultural change often begins with a major announcement. Company leaders can express a new organizational philosophy, revise the �irm's mission statement, or incorporate new values. Walmart's leadership had always emphasized the belief that employees or associates represented the most important constituency. For many years, the organization enjoyed an untarnished image and was featured in a variety of textbooks as a quality model to follow. In the 2000s, circumstances changed as the company was charged with discrimination against female employees and other unfair management practices. To combat the allegations, Walmart's leadership stressed positive examples of employment experiences and undertook other projects designed to emphasize that the company sought to be a good citizen in the community, including scholarship programs and neighborhood cleanup events.

Heidi Roizen, CEO of software company Broderbund (formerly T/Maker), recently stated,

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Though culture changes can happen organically, pronouncements can also be triggered by public scandals.

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How you act—and how you reward or punish the actions of others—will determine how everyone else in the company will act. And that in turn will set the culture—honest or cheating, respectful or disrespectful, friendly or mean, trusting or mistrustful. (ReferralCandy, 2016, para. 39)

Therefore, words, while important, are not the entire story. Managerial behaviors are what employees see. They will have a strong impact on any attempt at modifying or changing a culture.

Company Language Company language can be an effective method for changing corporate culture. Many years ago, in the 1980s, Ford's executive team needed to respond to declining sales and foreign competition in the U.S. automobile market. They decided it was important to demonstrate a renewed emphasis on quality. Thus, Ford adopted the motto "Quality is Job 1." When a manager can discover the right phrase or acronym, it can serve as a beacon guiding cultural change. Part of language change will be to defuse negative commentary about the company and its future.

Workplace Redesign In the 1990s, many of the "dot-com" companies began moving to open of�ice designs featuring employee spaces that could be personalized. While not every original Internet company succeeded, it became clear that the design of the work space can be altered to change the culture of an organization. Removal of walls and other barriers encourages collaboration but decreases privacy. The highly successful Google organization continues to take advantage of an open work space and features a variety of bene�its, including exercise rooms, free food, and even a massage program. These perks provide tangible evidence of the value placed on innovation and employee loyalty that meshes with the design of the of�ice. A hierarchical organization seeking to encourage greater innovation might follow suit.

Reward System Changes Altering the reward system can provide the most immediate incentives for changing

behaviors. Companies often change performance standards to re�lect new circumstances. When a company offers a new product, typical sales goals include identifying and capturing accounts; and pioneering selling techniques (making contacts, creating new accounts) receive the greatest rewards (commissions and pay raises). Should a company's new product succeed and become established in the marketplace, the culture might shift to greater expectations regarding relationship maintenance, such as tending to returned merchandise, answering customer complaints, and keeping in personal contact with key people in customer companies.

The HR department, working in conjunction with the marketing/sales department, will often modify indicators of successful performance and reward those people who meet new requirements. The same will be true in many international expansions. Salespeople must recognize that foreign partners want to establish trust prior to any business transaction. Therefore, the reward system will require adjustment to this new reality.

Managers are advised to remember that shifting performance criteria and the rewards that follow may be met with resistance. High performers receiving the biggest rewards under the prior system will be among the �irst to become upset. It takes time and training to effectively install a revised reward system.

Training Programs To effect change through training programs, goals should be aligned with the desired cultural shift. Many company executives have pushed for a renewed emphasis on customer service. Firms including Enterprise Rent-A-Car, Whole Foods, L.L. Bean, Olive Garden, and Nordstrom enjoy reputations as being customer-friendly and consistently outperform competitors as a result. A �irm known for indifferent service could repair its reputation by emphasizing the importance of customers in the initial stages of employee training, thereby changing perceptions of customers in the company's culture.

Role modeling and coaching can then reinforce training messages. When successful and higher-ranking employees display the behaviors that match the new cultural feature, others will follow. By connecting the reward system to such behaviors, the impact increases.

Systems and Procedures Cultural change can be encouraged by altering work systems. A hierarchical company seeking to become more �lexible can introduce �lextime work schedules to allow employees freedom to come and go as needed. The Zehnder advertising agency in New Orleans has installed a policy called VAN, which stands for "vacation as needed." Owner Jeff Zehnder explains that his idea of a strong culture is one in which people are treated as adults. So long as the work is completed on time, he trusts that his employees know how to best use their talents and energies (J. Zehnder, personal communication, February 17, 2010).

Goal-Setting Goals direct activities. The automobile companies Subaru and Mazda recently shifted goals toward a greater emphasis on quality dealerships, and employees were at the forefront of the changes. Company leaders believed that a more pleasant shopping environment would boost sales. The organizations spent a great deal of money improving showrooms and other elements of the dealerships (Greenberg, 2004) to assist salespeople in providing quality purchasing experiences. Toyota shifted its goals toward better serving the needs of women visiting dealerships. Children's play areas were added, restrooms were upgraded, and the company established coffee bar areas (Voight, 2006). The sales force was retrained to provide improved service to female customers. Company leaders changed the culture to recognize that both men and women buy cars. Subaru, Mazda, and Toyota all enjoyed increases in sales and customer loyalty.

In summary, changing a culture or creating a more ethical culture takes time. Managers must be committed to the change. Employees that respond positively should be rewarded and serve as role models.

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As workplaces become progressively more diverse, managers must utilize strategies to accommodate an array of people and experiences.

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2.4 Diversity and Diversity Management Diversity describes a wide spectrum of differences between people and that applies to individuals, groups, and organizations. At the individual level, for example, a disability sets a person apart in one sense from others, as does sexual orientation. Groups and categories include those associated with age, race, and gender, as well as political af�iliation, religion, and occupation (Gomez-Mejia, Balkin, & Cardy, 2005).

In the study of diversity, care must be taken to avoid assuming that group averages or characteristics apply to every individual or group. Differences between groups are normally smaller than differences within groups. Stereotyping occurs when all persons with one common characteristic, such as Hispanic origin or Jewish religious af�iliation, are incorrectly assumed to have a set of common characteristics. When leaders, managers, or coworkers make these false and racist generalizations, the workplace becomes divisive and unpleasant. In the world of business, typical groupings used to describe diversity include gender, age, racial identity, nationality, religion, sexual orientation, and physical disabilities.

Gender

Women compose more than half the workforce in the United States. In addition to single working women, over 50% of the U.S. workforce consists of employees from two-income families in which both spouses work (United States Department of Labor, 2011). Issues of marriage, child raising, career development, and work–life balance persist for both men and women.

In the United States, many women postpone marriage to begin careers. Numerous careers are interrupted by either having children or deferring to a spouse's career path. Some companies have responded to these challenges by offering on-site day care, job sharing, and other programs; however, most companies do not.

One of the more commonly noted problems, the glass ceiling, continues in many companies and industries. The glass ceiling refers to a barrier that prevents women from advancing to top level executive positions. In some circles the glass ceiling is often referred to as the cement ceiling—especially for non-white women. This issue arises when men dominate the agenda of an organization, including promotion decisions. The social network systematically excludes women from moving up. Mentoring programs and other systems have been designed to reduce the problem; however, evidence suggests that perceptions play a key role in maintaining the glass ceiling, especially when top executives view the barriers to advancement in ways that are different from the women seeking to break through to higher levels (Ragira, Townsend, & Mattis, 1999).

Age

By 2015, the average age of the United States workforce had reached 42 (U.S. Bureau of Labor Statistics, 2015). The trend toward an increasingly older work population will begin to decline in this decade, as members of the Baby Boomer generation retire. In 2011, 13% of the U.S. population was over the age of 65. By 2030, the �igure will be 18%. The 2008 economic downturn combined with better health and increased life expectancy has slowed the number of older workers who wish to stop working, further complicating the workplace environment (Stibich, 2011).

Age differences can complicate the manager's role. Senior workers hold the greatest level of experience and can teach and mentor younger employees. The U.S. economy is driven by a large services sector, where physical strength and endurance are not required. Senior workers in these occupations are able to remain on the job for longer periods of time. Some company executives have concluded that lower-level managers should receive training in methods to assist new workers and younger employees and help integrate them into the organization through socialization processes. Many companies now include senior employees in formal mentoring programs and strategy sessions (Cadrain, 2008).

Age may not be respected equally in every company or in every country. While age may be revered in many parts of the world, the traditional view that employees become more valuable as they continue their careers faces skepticism in many countries, including the United States. This conclusion, called ageism, dominates cultures in many companies.

Commentaries suggest that companies employing large numbers of senior workers will experience rising health insurance costs. The same workers may have accumulated longer vacation packages and sick leave days. Longer vacations and days set aside for a lengthy recovery from a medical issue remove the employee from the workplace, requiring others to pick up the slack. Some managers might notice resentment toward those who are away for longer periods of time.

Age diversity also affects younger workers. Some may become frustrated by the inability to move up the chain of command, because senior managers stay on the job past the traditional retirement age. Younger employees might express frustration that their newer, more cuttingedge skills are not fully utilized. Managers should monitor and respond to these potential rivalries.

Race and Ethnicity

Immigration into the United States has created both con�lict and growth in the economy. Each generation of Americans has experienced the in�lux of groups of individuals from other countries. Diversity issues associated with race have long existed.

Three of the largest non-white population segments in the United States are Hispanics, African Americans, and Asian Americans. In the United States, however, statistical racial composition pro�iles are skewed, because neither Hispanic nor Latino is considered to be a race. With that caveat in mind, Figure 2.1 identi�ies the overall composition of various groups in the United States.

Note that these three major racial/ethnic distinctions do not constitute all categories of nonwhite employees. In many organizations, persons of other backgrounds, such as individuals from the Middle East and Africa, are part of the work force. Many of the problems these larger ethnic groups encounter are also faced by those from other races or ethnic groups.

Figure 2.1: Composition of identi�iable groups in the United States

According to the latest census, three of the largest population segments in the United States are classi�ied as Hispanics, African Americans, or Asian Americans.

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Source: U.S. Quick Facts from the Census Bureau, https://www.census.gov/quickfacts/table/PST045216/00 (https://www.census.gov/quickfacts/table/PST045216/00)

The future of the �ields of management and organizational behavior undoubtedly will include great investigation into the issues such individuals confront, as well as managerial strategies designed to help fully integrate them into an organization and take advantage of the unique contributions they can make.

Hispanic Populations The terms "Hispanic" and "Latino" do not represent speci�ic racial groups. Instead, they apply to sets of individuals with common characteristics, including Spanish as a primary language (at least in the country of origin), belonging to the Catholic religion, and ancestry in former colonies of Spain. Spanish surnames and customs are found in Spain, Mexico, Cuba, Central America, and South America.

The Hispanic subset of U.S. citizens represents business opportunities and speci�ic management needs. Approximately 770,000 Hispanic-owned �irms were projected to exist by the year 2005 (Mendosa, 1996). The 2008 recession reduced that number; however, the majority of these organizations remain. Companies that conduct business with Hispanic-owned �irms enjoy a large marketplace that can be reached through Spanish-language media such as radio, newspapers, and magazines. Many U.S. companies are starting to recognize the potential purchasing power held by Hispanic and Latino people. In more recent years, Latino- owned companies, in particular, have been on the rise. CNBC notes,

The State of Latino Entrepreneurship 2015 report revealed that between 2007 and 2012, the number of [Latino-owned businesses] grew by 46.9 percent compared to just 0.7 percent for non-Latino owned businesses, an extraordinary level of entrepreneurship that suggests Latinos play a substantial role in local job creation and economic development. (Porras, 2016)

Managers are challenged by certain issues related to the Hispanic population as members of the workforce. One challenge is language. An individual whose primary language is Spanish often copes with misunderstandings and other problems associated with English, even when the individual speaks some English. Supervisors who do not speak Spanish encounter a similar dif�iculty. Bilingual managers are a valued resource in companies in regions with signi�icant Hispanic or Latino populations.

African Americans Approximately 13% of the U.S. population is African American, with ancestry of at least one parent originating in Africa. Discrimination and stereotyping continue to haunt this minority group. The election of President Obama, while viewed as a positive step, has not solved the problems associated with bigotry and systematic exclusion of African Americans in many organizations. The 2008–09 recession dramatically impacted employment statistics of African Americans, who suffered disproportionate job losses relative to the entire population. Some view this as evidence that discrimination and an unfair playing �ield still exist.

At the same time, African Americans are viewed by marketers as a potentially valuable segment that can be reached via speci�ic media, such as the BET cable channel and magazines including Essence and Black Enterprise.

In the business community, managers should be aware of racial incidents. Progressive companies develop programs to recruit, train, and promote minority members, including African Americans. Working toward equality and fair treatment of all remains an important ethical objective for African Americans as well as other minority groups.

Asian Americans Asian Americans also originate from numerous countries. As a group, Asian Americans constitute about 4% of the U.S. population. These individuals encounter different kinds of stereotypes and discriminatory practices than do Hispanics and African Americans. One recent research report suggests that nearly one-third of Asian-American employees have been subject to workplace discrimination (Montero, 2011), including unequal pay and promotion decisions, favoritism toward others by management, and incidents of stereotyping. Promotion issues have led to the term "bamboo ceiling," and "sticky �loors," which suggest Asian Americans are often held to lower ranks in the organizational hierarchy and cannot break through to top management (Fisher, 2005).

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Managers must take strides to promote a workplace culture that is safe and comfortable for all.

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Managers are advised to break down these perceptions and deal with members of this group in the same ways as other American minorities. The Equal Employment Opportunity Commission (EEOC) recommended the following steps to improve the employment circumstances of Asian Americans in 2010:

Strengthen leadership and personal commitment to diversity from top management in the private sector. Strengthen commitment to diversity in U.S. employment agencies. Make certain the EEOC is fully accessible to Asian Americans. Collaborate with Asian American community organizations. Support Asian American employee groups. Improve Asian American documentation and support for promotions.

Religion

Matters of religion have affected interactions among citizens for centuries. In the 1960s, concerns were expressed because President John F. Kennedy was Roman Catholic. The events of September 11, 2001, changed the American perspective regarding religion. Speci�ically, members of the Islamic faith became targets of hostility in the media, in local communities, and in the workplace. As time passes, the hope is that greater cultural integration will include a reduction in animosity toward some religions.

As a matter of law, employment discrimination based on a person's religion is prohibited, as is discrimination based on race, sex, age, or national origin. In practical terms, a hostile workplace based on religion creates similar discomfort to intolerance based on race and gender. Ethical managers seek to reduce these tensions and create understanding among employees with diverse religious beliefs.

Sexual Orientation and Gender Identity

In 2010, the repeal of the "don't ask, don't tell" policy regarding members of the military took place in the context of a continuing national debate regarding the rights of gays, lesbians, and other groups. Contested issues included the right to marry and live with the same civil rights as heterosexual couples, including hospital visitation, access to health insurance coverage, and inheritance rights.

The 2015 Supreme Court decision regarding what has been termed marriage equality has dramatically shifted the landscape, as have the majority national views of the issue. By 2016, 60% of U.S. respondents reported they support same-sex marriage, which has implications for a vast variety of companies, including insurance, health care, and advertising (how ads are prepared), and extending to HR departments, managers, and co-workers across the country (McCarthy, 2015).

Recently, legislation regarding transgender individuals has resulted in controversy and disagreement. In both Texas and North Carolina, state legislators passed laws insisting persons use bathrooms based on the gender they were assigned at birth. The North Carolina law resulted in responses by several major corporations, including PayPal, Dow Chemical, the NBA, the NCAA, and Google. The reactions included economic sanctions and condemnation of

the statute itself.

In the workplace, intolerance of gay, lesbian, and transgender coworkers persists, despite laws that make discrimination based on sexual orientation illegal. Gay slurs continue to make headlines in the worlds of entertainment and sports. Debates then move to other places, including the of�ice. Managers are expected to defend employees from defamatory statements and to try to instill respect toward others regardless of differences.

Disabilities

A disability represents diversity in the sense that it is a distinguishing characteristic. The Americans with Disabilities Act covers the basic rights of individuals with disabilities. The EEOC takes further steps to help those with special needs in the workplace. Many business organizations have taken dramatic steps to help accommodate those with disabilities. Approximately 15 million disabled U.S. citizens are employed.

Statistics indicate that disabled workers are less prone to absenteeism and turnover than other employees (Workforce Strategies, 1993). Managers are aware that disabled workers can make others feel uncomfortable and that they may feel isolated or patronized in many working situations. Therefore, increasing sensitivities toward disabled workers remains an important goal. This includes education of coworkers and peers to help both the disabled employee and others to feel more comfortable with each other. Reducing patronizing statements and isolation of those with disabilities creates a proactive response to improve the workplace for those with special needs.

One response to assisting disabled workers who have dif�iculty traveling has been the implementation of telecommuting positions. This and other innovative approaches can become part of an overall diversity management strategy.

Diversity Management Strategies

Companies that embrace diversity often reach wider audiences with their products and services, bene�it from innovative ideas from untapped members of society, and perform a social good. As described in the sections that follow, seven key activities are part of a quality diversity management system (Cox, 1993, pp. 225–241; Harvey & Allard, 2002). These are implemented by management in individual departments, as well as throughout the entire organization. As previously noted, the HR department plays a key role in recruiting and selection; other aspects are more oriented to the general organization.

Recruit From New Sources One element of the human resource management process involves planning for future personnel needs. Human resource planning programs can be designed to emphasize �inding recruits from diverse backgrounds. Doing so involves publicizing efforts to attract minority applicants. Internship programs and job fairs can be established to create pipelines of minority member applicants. The power of word of mouth and social media should not be ignored. Part of recruiting involves getting the word out that a company has a true interest in a more diverse workforce.

Use Unbiased Selection Processes

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Diversity and Sensitivity

This video demonstrates two workplace interactions which illustrate the importance of sensitivity to the differences of others in the workplace.

Critical Thinking Questions

1. What was the difference between the �irst and second interactions between the two men in the break room?

2. What can you do differently to be more accommodating to coworkers who may differ from you?

Many major orchestras across the United States employ a unique selection process. When a �inalist plays for the judging committee, the musician plays behind a screen. Only the music matters. The judges cannot see the person's physical appearance. This technique cannot be applied to many situations; however, the concept can. Selecting candidates solely for their potential to succeed, without any other biases involved, encourages true diversity. Many organizations use multiple raters to examine an employee's application or resume, with the goal of making sure the applicant receives unbiased treatment during the selection process.

Provide Training and Orientation for Minority Group Members Many times, someone from an unusual or different background will experience a sense of discomfort with a new, unfamiliar organization coupled with the potential lack of familiarity with various company procedures. Training methods establish an environment in which a person can remain con�ident while knowing his or her background may be different, but at the same time feeling assured the adjustment to the new situation will take place. Diversity strategies include making sure minority trainers are part of the process. Trainees should receive continual, positive feedback regarding their progress and possibly additional attention away from the training group (during break periods or other down times) if they ask for help.

Encourage Sensitivity From All Employees Many larger organizations now provide diversity training. The goals of such programs are to encourage employees to embrace the idea that diversity creates an advantage for a company and to enjoy cultural and individual differences. The process can begin at an earlier stage, in the recruiting and selection processes. Applicants can be noti�ied that the company intends to build a diverse workforce. The selection criteria can include an acceptance of or excitement about working in such an environment.

Display Flexibility in Responding to Worker Requests An effective diversity program recognizes that employee needs vary. Parents need time to tend to matters such as doctor's of�ice visits and parent-teacher conferences at school. Individual workers may take time off to celebrate various holidays throughout the year. Senior workers may request time off to help out their children or grandchildren in some way. Listening constitutes a key element in �lexibility. Managers who pay attention to employee needs are often rewarded with loyalty and extra effort.

As an example of �lexibility in the workplace, one newer method of helping maintain work– life balance, telecommuting, involves working at home and utilizing technologies such as the Internet and the phone system to transmit �inished projects to an of�ice. In 2008 nearly 3 million jobs, or about 14% of workforce positions contained elements of telecommuting (Telework Research Network, 2011). A parent with children in school can work at home and then tend to family needs during other parts of the day. Telecommuting allows new parents to work when the child sleeps and during times when the other spouse is at home. Telecommuting has been noted as a method for reducing wife/mother/employee role con�licts as well as husband/father/employee role con�licts (Madsen, 2003).

Tailor Motivation Programs to Individuals Motives vary by personal circumstance. A single parent will have motives that are different from someone approaching retirement age with an empty nest, and issues such as the cost of health insurance and the viability of a company's retirement program will have varying degrees of signi�icance to each employee. Extrinsic motives are tangible and visible. They include pay raises, promotions, prizes in contests, positive performance appraisals, and pension plans provided by companies. These motives can be adapted to �it the needs of various organizational members.

Intrinsic motives are internal. Intrinsic satisfaction results from performing at a high level, helping others, and taking advantage of one's own talents and abilities. Employees may derive additional satisfaction and motivation from winning a sales contest, receiving promotion to a certain rank, or being chosen to lead a task force or committee. A complete diversity program accounts for both extrinsic and intrinsic motives.

Reinforce Differences in Positive Ways Numerous sources cite the importance of embracing diversity. In essence, the idea is to accept the principle of multiculturalism for its own sake. Doing so can take forms as simple as themed of�ice parties or celebrations, such as Cinco de Mayo or Eid ul-Fitr (the end of Ramadan), or as complex as diversity and cultural sensitivity training sessions. Allowing workers to decorate their work spaces with personal items that re�lect cultural diversity also expresses the objective of embracing diversity. Managers that take the time to learn a few key phrases that apply to another culture establish a higher level of rapport with employees. In essence, diversity can be celebrated in a variety of ways. Anything that enhances cultural understanding or knowledge about others can be rewarded and emphasized by management.

The Four-Layer Diversity Model Managers can employ the principles of the four-layer diversity model to help employees understand diversity issues (see Figure 2.2). The model suggests that the innermost level is personality, which includes likes, dislikes, attitudes, and beliefs that are unique to each individual. The second layer, internal dimensions, consists of the features noted in this section, including gender, sexual orientation, race, and age. The third layer, external appearance, includes other characteristics, including religion, income, geographic location, personal and recreational habits, educational background, and appearance. The fourth layer, the organizational dimension, includes work location, work type, seniority, managerial status, and other features of the company.

Figure 2.2: The four-layer diversity model

The four-layer diversity model helps break down evaluations of others into several categories, which can lead to a better understanding of individual differences.

Workplace Diversity From Title: Diversity in the Workplace: Playing Your Part

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The model can be used to understand how we think about and evaluate others based on our biases. It also can help an individual explore his or her own career choices. Team exercises designed to build trust and acceptance can be based on the personal perceptions and views of others (Gardenswartz & Rowe, 1998).

Barriers to Diversity Management Strategies

"Everything communicates" is a key phrase in marketing. The same is true of a diversity management program. Company leaders dedicated to diversity understand that a variety of incidents and decisions can detract from a strong program. Encouraging diversity links closely with seeking to shape or rede�ine a company's culture. The program may take time, and obstacles can appear along the way. The primary forces that can detract from a company's diversity management agenda include the following:

Lack of inclusiveness and stereotyping Expectations of reverse discrimination Failure to include diversity efforts in performance appraisals Resistance to change Inadequate management training techniques

Continual stereotyping represents a major obstacle to the creation of an accepting and diverse workforce. Overcoming it requires managers to pay attention to any slurs and generalizations, correcting them as they occur. Lack of inclusiveness is often more dif�icult to address, as socialization takes place on-the-job but also away from the workplace. In essence, cliques still exist and are harder to break down.

Fears of reverse discrimination often are directed at programs such as af�irmative action. Opponents of af�irmative-action programs use terms such as "quota systems" (which they are not) to urge resistance to the implementation of diversity efforts. Management communication processes at all levels can help reduce these concerns.

Employees are quick to notice when diversity management is a low priority to an organization. Staff members follow what leaders stress as important. For a diversity program to succeed, top management must buy in and keep the company on course. For example, poor management training programs that fail to incorporate diversity management in the process may indicate that diversity is a low priority, and as a result managers will not know how to effectively respond to employee needs or discriminatory incidents. In addition, when the system rarely receives mention and does not appear in any internal company documents, it becomes easier to assume top management has assigned a low priority to the idea of increasing diversity in the organization.

Organizational inertia, the term used to describe resistance to change, can be found in practically any organization. Diversity programs represent change and may encounter resistance as a consequence. The resistance can take the form of stalling, trying to turn attention to other issues, or even something resembling a rebellion.

As noted, each of the potential barriers to diversity management can be overcome. True diversity often signi�ies a cultural shift in the organization. All of the tactics designed to change a culture can play a role in instituting a truly multicultural environment.

In summary, diversity describes a wide spectrum of differences between people. Companies seeking to encourage and embrace diversity employ various strategies and tactics. Still, many barriers to diversity management programs remain. Managers who adapt to and take advantage of diversity create major advantages for their companies. Managers who fail to embrace diversity risk falling behind in the new competitive, multicultural world of business.

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Summary and Resources

Chapter Summary

Culture consists of the shared meanings associated with the symbols, rituals, language, and social dramas that highlight organizational life, including myths, stories, and jargon. Culture combines the philosophy of the �irm with beliefs, expectations, and values shared by members. It contains the stories and myths about the company's founder and its current leading �igures, who are the �irm's heroes and heroines.

Organizational culture provides several key functions, including making the organization distinct, creating a sense of identity for organizational members, building a strong social system, and helping members �it in. The three layers of culture that employees encounter include observable artifacts, espoused values, and enacted values.

Culture is transmitted and learned in a variety of ways, beginning with the recruiting process. Socialization is the process of internalizing or assimilating an organization's values. Typically, socialization takes place in three stages: anticipatory socialization or pre-arrival, an encounter, and change and acquisition, or metamorphosis. Each of the stages helps the new employee understand the company's culture in relation to his or her own value set and then eventually helps the employee to align the two to create a positive working situation.

Companies can engage in socialization programs that range from informal to formal. Employees can be trained and socialized individually or collectively. Advancement can take place on a �ixed or variable schedule. Socialization programs offered in serial or sequential form vary from those presented randomly. A mentor can help in the socialization process.

Organizational stories further transmit culture by explaining dualities, equalities and inequalities, and events in the past. Stories maintain organizational heroes and heroines. Cultures take several forms including clan, hierarchy, adhocracy, and market versions. Members of a positive culture enjoy the bene�its of stability, employee self-management, and smoother integration of new members.

When cultural change becomes necessary, management can work toward a new version through top-level pronouncements, company language, workplace redesign, reward system changes, training programs, role modeling, coaching, organizational systems and procedures, and goal-setting programs. Ethical cultures are built and maintained by visible statements of commitment, establishing ethical expectations, providing positive role models, rewarding ethical acts, punishing unethical acts, and providing help in the form of ethical counseling.

Diversity concepts apply to individuals, groups, and organizations. In the world of business, typical groups used to describe diversity include gender, age, race, nationality, religion, sexual orientation, and physical disabilities.

Problems associated with diversity issues can be addressed by recruiting from new sources, seeking to use unbiased selection techniques, providing quality training and orientation programs for minority members, encouraging sensitivity by all employees, maintaining �lexibility in responding to employee requests, tailoring motivational programs to individual employees, and reinforcing differences in positive ways. Diversity management programs often require a cultural shift or change in order to succeed.

CASE STUDY: GM's Cultural Challenge

Many catalysts to change exist. It often takes a dramatic turn of events to make major alterations to a culture possible. General Motors (GM) may be viewed as a classic example of the �ixed nature of culture. For years the organization has been characterized as being led by a more authoritarian style of leadership that was highly resistant to change.

When Mary Barra assumed the position of CEO of GM in 2014, it was clear that more than a change of climate, or the prevailing atmosphere in the company, needed to take place. At the time, GM faced criminal charges related to wire fraud and withholding information from regulators about a defective ignition switch that had been blamed for over 100 deaths (Colvin, 2015). The "traditional" approach to incidents involving a defect or problem that leads to the loss of life (which does occur from time to time in the automobile industry) had been to stall, delay, and minimize the importance of the event. Then the company would quietly settle any lawsuits or other legal issues while maintaining a posture of innocence or at least one indicating that there was no concrete evidence signifying that the situation was caused by the company.

Instead, Barry chose to publicly and openly acknowledge the problem, including setting up a compensation fund for victim families, and meeting with those families in person. "I never want to put this behind us," she told employees at a town hall meeting that stunned many of them. "I want to put this painful experience permanently in our collective memories." A retired executive commented that her remarks "were unlike anything any previous GM CEO has ever said" (Colvin, 2015). GM settled the case with the U.S. Justice Department for $900 million.

Not content to stop there, Barra noted in 2016, "We have more work to do. We've got to get to every single employee. We do this external survey with Aon Hewitt so that we can benchmark ourselves to other industries, and we've seen tremendous improvement in the engagement of our employees" (Reingold, 2016). She was, in part, referring to what she termed the "frozen middle" layer of management that had been most resistant to change. Barra meets with them, and with newly promoted or hired managers two to three times per year to make sure they understand how the new culture must operate.

"Another core thing we are driving toward is understanding that when we �irst know (or think) we might have an issue, that's the easiest time to solve it. Raise the issues and solve them early," she notes (Reingold, 2016). Such was the approach used in the defective ignition-switch case.

As the future unfolds, many eyes will undoubtedly be focused on Mary Barra's efforts to change a longstanding culture and the problems resulting from the lack of adaptation to a changing world.

Case Questions

1. What was the major cultural challenge facing General Motors prior to Barry's involvement? Would paternalism and a male-dominated leadership team be part of the problem?

2. What methods of cultural change could Mary Barra implement in the recruiting and training stage for entry level employees? 3. In the past refusing to accept responsibility for the accidents and deaths associated with the automobile defects may have been the best legal

approach, in terms of lawsuits and governmental responses. Was it the most ethical response?

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Review Questions

Click on each question to see the answer.

De�ine dominant culture and subculture. (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

The dominant culture articulates the core values shared by a majority of an organization's members. A subculture, in an organizational context, arises from the common problems, situations, and experiences that a set of members faces.

What is meant by the term "strong culture"? (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

A company with a strong culture employs members who intensely hold and readily share the organization's core values.

Name the functions performed by culture. (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

Culture makes an organization distinct, creates a sense of identity, builds a strong social system, and helps employees "�it in."

Name and brie�ly describe the three stages of employee socialization. (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

Anticipatory socialization involves the learning that takes place prior to joining an organization. The encounter takes place as the individual learns more about the company and begins to compare his or her expectations about the �irm's culture with reality. The change and acquisition (or metamorphosis) stage occurs as the employee masters the skills and role performance needed to succeed in the organization.

Identify the choices to be made by managers when creating socialization programs. (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

The �ive potential methods for socializing new workers include (1) informal or formal, (2) individual or collective, (3) �ixed or variable advancement schedule, (4) serial or sequential format, and (5) divestiture versus investiture.

What activities and functions are provided by mentors? (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

Mentoring involves several activities, including listening to and reviewing ideas, introducing the mentee or protégé to key individuals who might offer help, showing the person how to act and perform the job, and providing emotional support.

What activities are involved in attempting to change a culture? (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

Activities include top management pronouncements, changes in company language, workplace redesign, reward system changes, training programs, systems and procedures, and goal setting.

Name the groups that are typically used to describe diversity in the world of business. (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

In the world of business, typical groupings used to describe diversity include gender, age, racial identity, nationality, religion, sexual orientation, and employees with physical disabilities.

What activities are involved in diversity management programs? (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

Diversity management strategies include recruiting from new sources, unbiased selection processes, training and orientation for minority members, encouraging sensitivity by all organizational members, �lexibility in responding to worker requests, motivation programs tailored to individuals, and reinforcing differences in positive ways.

What are the potential barriers to diversity management programs? (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

Barriers include continual stereotyping, fears of reverse discrimination, having a low priority as an organizational activity, the failure to include diversity efforts into performance appraisal, resistance to change, and poor management training techniques.

Analytical Exercises

1. Based on your knowledge of U.S. businesses, name three companies you believe have strong cultures. Write down the reasons why you think these companies exhibit strong cultures. Then, name three domestic companies you believe have weak cultures and explain your reasoning.

2. Assume you have been chosen to consult with a company that has recently faced both legal problems and bad publicity due to ethics violations. Prepare a report spelling out how the culture must change along with ways to build a more ethical culture. Then explain to management why making these changes will be the key to the �irm's long-term survival. Tailor your report to one of the following industries, including the kinds of legal troubles �irms in that industry have faced, ethical problems that these companies have encountered, and speci�ic remedies for a company in that industry.

Financial/stock market Retail grocery chain Real estate sales

3. Using the tactics a manager can use to change the culture of an organization, explain how you can build a stronger diversity management system by incorporating those ideas. Also explain why building a diversity management program might be more dif�icult in a strong (as opposed to a weak) culture. Include espoused and enacted values in your answer.

4. Explain the dif�iculties you would expect to encounter in creating a diversity management program in the following types of organizations. Explain your reasoning, including the factors that create diversity challenges in these organizations.

All-white, all-male country club

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Hooters™ restaurant chain Roman Catholic Church Financial investment company College football Professional hockey U.S. military

5. Using the �ive potential methods for socializing new workers—(1) informal or formal, (2) individual or collective, (3) �ixed- or variable-schedule advancement, (4) serial or sequential format, and (5) divestiture versus investiture—develop programs for workers in the following types of organizations. Explain your reasoning for each choice.

Police of�icer trainee Manager trainee, retail chain store such as Target or Costco Insurance salesperson, of�ice with 20 sales reps Information technology specialist

Key Terms

Click on each key term to see the de�inition.

anticipatory socialization (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

Also called the pre-arrival stage; the �irst stage of organizational socialization that involves the learning that takes place prior to joining an organization.

artifacts (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

The physical signs of an organization's dominant culture.

change and acquisition (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

Also called the metamorphosis stage, this third stage of organizational socialization occurs as the employee masters the skills and role performance needed to succeed in the organization.

diversity (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

The term used to describe a wide spectrum of differences between people.

dominant culture (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

In an organizational context, the core values shared by a majority of an organization's members.

enacted values (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

An organization's values and norms exhibited as employee and managerial behaviors.

encounter (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

The second stage of organizational socialization, in which the individual learns more about the company and its culture.

espoused values (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

An organization's explicitly stated values and norms.

extrinsic motive (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

Rewards given by others, such as pay raises, promotions, prizes in contests, positive performance appraisals, and pension plans that are delivered by the company.

glass ceiling (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

The metaphorical barrier that prevents women from advancing to top level executive positions.

intrinsic motives (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

Personal internal rewards that result from performing at a high level, helping others, and taking advantage of one's own talents and abilities.

norms (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

The rules of behavior that guide members of a group or organization.

organizational culture (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

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A set of shared meanings and values held by a set of members in an organization that distinguish this organization from others.

positive cultures (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

Cultures that are democratic and progressive, nurture and value the contributions of members, and tend to be more �lexible and adaptable.

role clarity (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

What exists when a person has a clear understanding of his or her function in the organization and how to complete all assigned tasks.

socialization (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

The process of learning, internalizing, and assimilating an organization's values.

stereotyping (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

What occurs when all persons with one characteristic are incorrectly assumed to have a set of common characteristics.

strong culture (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

An organizational culture in which members intensely hold and readily share the organization's core values.

subculture (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

In an organizational context, refers to the common problems, situations, and experiences that a set of members faces.

telecommuting (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

Working at home and utilizing technologies such as the Internet and the phone system to transmit �inished projects to a central of�ice.

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1Introduction to Organizational Behavior

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Learning Objectives

After reading this chapter and studying the materials, you should be able to:

1. Describe the essence of organizational behavior. 2. Explain how scienti�ic management and the human relations movement helped shape the

�ield of organizational behavior. 3. Apply modern concepts present in organizational behavior to individual and managerial

efforts. 4. Recognize the personal and managerial skills present in organizational behavior that apply

to today's business environment. 5. Identify additional trends that affect the �ield of organizational behavior and one's personal

career.

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1.1 The Nature of Organizational Behavior Managers in organizations engage in a variety of activities every day, among them supervising and directing employees. Organizational behavior (OB) may be de�ined as the investigation of the behavioral factors that affect organizations and their management at the individual, group, and organization-wide levels. Organizational behavior concentrates on the people side of a business, nonpro�it, or governmental entity. Understanding organizational behavior concepts can help a company or nonpro�it ful�ill its potential by creating a satisfying and positive environment. In turn, a positive environment can lead to pro�itability, growth, and other measures of success, thereby connecting the human element with the operational elements of an organization (see, for example, OB in Action: Quicken Loans). This textbook examines the behavioral factors that dictate success (or failure) in the world of commerce and in other organizations at each level.

In this �irst chapter, �ive topics are explored. This section provides an overview of organizational behavior along with a brief presentation of the disciplines related to OB. A review of historical trends that in�luenced the �ield follows. Next, an examination of the modern context of management and organizational behavior is provided. This is followed by a discussion of some of the interpersonal managerial skills that lead to individual success. The chapter concludes with an evaluation of the context in which business currently operates. These concepts set the stage for the remaining parts and chapters in this text.

OB in Action: Quicken Loans

The mortgage lending business has �lourished in the United States for a very long time. Recently, a new player moved into the market and achieved great notoriety due to both its �inancial achievements and its success on a human level. In 2016, Quicken Loans jumped to �ifth place in Fortune's Top 100 Companies to Work For (Fortune, 2016).

In terms of basic statistics, the company pays 100% of employee healthcare costs, offers health insurance to part-time employees, provides onsite child care, offers compressed work weeks, provides paid sabbaticals, and maintains an onsite �itness center and medical assistance programs. The company grants paid time off for volunteer activities and emphasizes non-discrimination while providing same-sex partnership bene�its.

Beyond these efforts, Quicken Loans has been credited with helping revitalize part of the Detroit, Michigan, metro area, which has suffered high rates of unemployment and other problems. Led by CEO Dan Gilbert, the company features a relaxed and fun atmosphere, which stands in contrast to many more "buttoned-down" companies in the industry. Inside the company's campus, a high-energy atmosphere is maintained with casually dressed employees and recreational amenities such as mini-basketball hoops (Gallagher & Reindl, 2013).

With Gilbert at the helm, Quicken Loans introduced a series of innovative programs that have been replicated by other organizations in the industry. These include marketing and advertising campaigns designed to attract customers at the peak of the 2008–09 mortgage crisis, paperless mortgage applications, and the current Rocket Loan program, which makes the mortgage application process even faster using an online application and nearly immediate feedback.

The efforts to create a positive work environment for employees coupled with an emphasis on community development and renovation is responsible for the many favorable reactions to the company. This approach demonstrates the value of understanding the principles of effective behavior management described throughout this textbook.

Re�lection and Application Questions

1. Which elements of the Quicken Loans employment package are most appealing to you? 2. How can a favorable image in the community in�luence the internal workings of a company? 3. How can a fun-loving environment connect with innovation and creativity? How can it create problems?

Organizational behavior is commonly known as a hybrid �ield, which means that those who study the topic will encounter concepts and theories generated in a variety of academic disciplines. OB can also be described as "interdisciplinary" or "multidisciplinary." In any case, the study of organizational behavior in the modern context requires a modest understanding of concepts generated in the following �ields:

psychology social psychology sociology organization theory human resource management history research methods and statistics anthropology

Each contributes unique insights into the study of methods used to improve individual and organizational performance.

Psychology

Psychology, the study of individual mental processes, profoundly in�luences the �ield of organizational behavior. Psychologists examine many factors that are part of organizational life, including stimuli, perception, learning, personality, and motivation. By understanding how stimuli are perceived, attention-getting factors associated with learning can be designed to improve training programs and create effective workplace safety practices. Perception affects the subsequent development of the attitudes, beliefs, and values that shape citizenship within the �irm. Several motivation theories that apply to the workplace were developed or in�luenced by psychology.

Social Psychology

Social psychology, or the examination of social factors that in�luence individual mental processes, includes a sweeping number of topics that overlap with organizational behavior. Roles and role theory, teams and groups, decision-making processes, leadership, and communication are topics studied by both social psychologists and organizational behaviorists. Recent contributions made by social psychology to the �ield of organizational behavior include the concepts of social information processing and the nature of inclusive or exclusive language that can be used to alienate or discriminate against others.

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Weber, like Blau, is known for his contributions to social theory.

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Reliability and Validity in Action

Watch as an instructor asks students to demonstrate the principles of reliability and validity in this exercise.

Critical Thinking Questions

1. What might be some additional ways that one could ensure reliability?

2. question

Sociology

Sociology is the study of social organizations. Organizational design and structure, roles, and teams and groups are subjects that sociology and organizational behavior have in common. Many of the classic principles of organizational structure �irst appeared in the writings of sociologists, including Max Weber and Peter Blau.

Organization Theory

A strong overlap exists between sociology and organization theory due to their emphasis on organization design issues. The primary difference is that organization theory approaches the topic from a stronger business perspective. In both sociology and organization theory, the organization constitutes the primary unit of analysis rather than individual employees, teams, or groups.

Human Resource Management

Human resource management (HRM) and organizational behavior share a parent �ield: management. Each area (HRM and OB) is a management specialty. Both examine the subjects of job design, union–management relationships, and job satisfaction, including the indicators of satisfaction (rates of absenteeism, tardiness, turnover, accidents, grievances, and vandalism) in the workplace. Many organizational behavior research efforts aim at improving job satisfaction and its indicators.

History

The role of history in organizational behavior is related to context. Early theories of motivation and job design emerged during the Industrial Revolution, as did ideas regarding organizational structure. Several of these concepts resulted from the movement to factories and centralized work places (rather than personal homes and workshops). During World War II, new leadership theories emerged as the United States government sought to improve leadership skills among military of�icers. In the 1960s, the ability to conduct more

sophisticated research and data analysis arose from the development of computer technology and later from the introduction of the Internet.

Research Methods and Statistics

Knowledge in the �ield of organizational behavior advances through quality research. Research methods and statistics programs seek to generate high-quality experiments and empirical investigations of constructs, postulates, hypotheses, and theories. A construct is a term that is used to represent an unobservable process. Motivation and learning are constructs that cannot be seen but that still take place. For example, a research study might seek to measure the construct of "job satisfaction" at a local hospital.

In organizational behavior, a quality research project includes reliability, where variables can be measured consistently and repeatedly. The research project must also possess validity, meaning that the study measures the variable intended to be measured, and thus its �indings can be generalized to other groups. A research study that �inds employees who work the third shift in a hospital to be more dissatis�ied with their jobs than those working the �irst or second shifts exhibits reliability when the measures of the construct "job satisfaction" can be repeated and obtain the same results. The study has validity when the �inding (greater dissatisfaction is present) can be transferred to employees in other settings, such as third-shift workers in manufacturing plants, restaurants, and hotels.

Anthropology

Anthropology contributes to organizational behavior through the emphasis on concepts such as organizational climate and culture. The organizational climate, or prevailing atmosphere within an organization, dictates whether employees feel relaxed and accepted or stressed and fearful. Internal and external forces can change the climate of a company. An external factor such as a recession can cause organizational members to worry about losing their jobs and lead supervisors to exhibit a more directive management style. An internal change in climate results when top managers leave. Each new executive will imprint his or her personality on the organization, thereby causing a shift in the �irm's environment.

Anthropological methods include the "researcher as participant" form of inquiry. Classic studies by John Van Maanen in a police department and Rosabeth Moss Kanter in a major corporation have added new insights into what happens in the workplace (Van Maanen, Dabbs, & Faulkner, 1982; Kanter, 1977). Both argue that organizations should be studied from within rather than by using constructs imposed from outside.

Another anthropological element, culture, also affects organizational behavior. Culture at the national level in�luences many companies. The operation of a �irm in Japan will likely be quite dissimilar from that of a company in Mexico due to differences in national culture. Organizational culture constitutes the more enduring aspects of life within a company. A company's culture often begins with a founding story, such as Mark Zuckerberg's tale at Facebook or the story of J. C. Penney's �irst retail store. Over time company stories, legends, language, and rituals evolve and then become relatively �ixed and dif�icult to change.

As this brief section indicates, organizational behavior has been enriched by the theoretical contributions and research �indings from a variety of related �ields. More recently, concepts

Reliability and Validity—Core Concepts in Psycholog...

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The "researcher as participant" method is a form of qualitative research that requires immersion and participation in the given environment.

Prathaan/iStock/Thinkstockderived from postmodernism, including ideas about the construction and deconstruction of language as well as views of the organization, hegemonic processes, notions of subjectivity and identity, and cultural imperatives have begun to in�luence thinking about what happens in the workplace (Baack & Prasch, 1997). Undoubtedly the future will include even greater expansion into other academic �ields to enhance understanding of organizational processes.

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Mary Parker Follett was responsible for the notion that managers ought to guide and help their employees, rather than monitor them, thereby shifting the �ield's focus to human relations, and away from simple productivity.

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1.2 Historical Overview: Scienti�ic Management and Human Relations Organizational behavior is a sub�ield of the larger �ield of management. The management and organizational behavior disciplines have evolved over time, from relatively straightforward ideas about increasing productivity to complex modern approaches. Historically, the scienti�ic management approach was at the forefront of the study of the �ield of management. It was followed by the human relations movement and the subsequent transition to modern organizational behavior.

Scienti�ic Management

Historians trace the beginnings of the �ield of management to the late 1800s, when Henry R. Towne (1886) presented a paper entitled "The Engineer as Economist" to the American Society of Mechanical Engineers. The article argued that the study of management was equal in importance to the study of engineering, and therefore the �ield should create its own body of research and have its own professional organizations (Bedeian, 1986).

Within a decade, mechanical engineer Frederick W. Taylor (1903, 1911/2010) developed the principles of scienti�ic management, an approach that merged classic scienti�ic principles with what was known about the practice of management. The four principles are displayed in Table 1.1. The use of these principles produced dramatic increases in productivity levels of individual workers. One notable example occurred in the Ford Motor Company with the development of the assembly line, which increased both productivity and pro�its.

Table 1.1: Taylor's four principles of scienti�ic management 1. Development of a true science of managing with clearly stated laws, rules, and principles that replaced rule-of-thumb methods

2. Scienti�ic selection, training, and development of workers for speci�ic jobs

3. Cooperation with workers to make sure work is completed using scienti�ic principles

4. Equal division of tasks and responsibilities between workers and management Source: Adapted from A. G. Bedeian (1986). Management. Chicago, IL: The Dryden Press.

Later, Frank and Lillian Gilbreth (1915) incorporated the principles of scienti�ic management into their time and motion study. By observing work performance using �ilm and a stopwatch, they designed more ef�icient methods to complete tasks.

As these concepts and applications evolved in the United States, Henri Fayol (1916/1949) wrote in his native French about the importance of the classic management functions of planning, organizing, staf�ing, directing, and controlling. The ideas paralleled the principles of scienti�ic management in the United States and were widely implemented throughout Europe.

At the same time, however, criticisms emerged that scienti�ic management programs dehumanized employees and created sweatshop-like conditions. The U.S. government and individual unions sought to protect workers from unfair management tactics, such as the use of child labor, pay scales not suf�icient to maintain a standard of living, and abusive supervisors (Majority Report of the Sub-Committee on Administration, 1912). The U.S. labor movement achieved dramatic legislative gains during the scienti�ic management era. Further, one governmental response was to ban the use of a stopwatch to measure work output. Legislators argued it placed undue pressure on workers, almost as a form of coercion (Bedeian, 1986).

The Human Relations Movement

The �ield of organizational behavior emerged from other aspects of management following a series of changes to the �ield of management as well as the general conduct of business. Some of the origins of organizational behavior are credited to Mary Parker Follett, who questioned the wisdom of scienti�ic management. She argued that the system ignored the human element of organizations (Follett, 1918). Follett believed that improved communication between parts of a company could be created by increasing employee participation in the direction of the �irm, especially when workers were given autonomy and assigned into crossfunctional teams to work together on projects. Follett concluded that managers should serve as coaches and facilitators rather than as monitors and supervisors. This idea became the basis of the human relations movement (Tonn, 2003), the focus of which is on the behaviors of people rather than solely on productivity. Two important elements of the human relations movement include the Hawthorne studies and Maslow's ideas regarding humanism.

The Hawthorne Studies The human relations movement in management began in earnest in 1927 with the Hawthorne studies. In the experiments, which ran from 1927 to 1932, researchers Elton Mayo and Fritz Roethlisberger altered different factors, most notably the level of lighting, to determine the effects on worker productivity. The primary �indings of the research project were as follows:

1. The subjects responded to positive and pleasant interactions with researchers by increasing productivity rates on the job.

2. Some of the tasks performed by supervisors were eventually assumed by entry-level employees, who also generated higher levels of production because the workers found the experience to be "fun" and free of anxiety about being disciplined for poor performance.

3. Workers tended to form groups that were cohesive and loyal to one another. Anyone who overproduced became a "slave" or "speed king" and was derided or even physically punched in the arm ("binging") by group members. Anyone who failed to do his fair share of work was labeled a "chiseler" and admonished to keep up with the group.

Mayo and Roethlisberger concluded that workers are motivated by more than money. Social interactions constitute a key part of the organizational experience. Individual attitudes and collective employee morale were signi�icant determinants of productivity levels. The researchers suggested company managers should account for human emotions and interactions to achieve higher levels of success (Urwick, 1960; Bedeian, 1986).

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Although criticisms of the research methods used have emerged and questions regarding the exact nature of the �indings and conclusions related to those �indings exist, what remains clear is that the studies altered the course of investigation into the nature of management of social organizations. In essence, the recommendations made by Mayo and Roethlisberger, that managers should pay close attention to the human element of their operations, created a dramatic impact on the �ield of organizational behavior and the practice of management at a more general level.

Abraham Maslow and Humanism The �ield of organizational behavior has been shaped, in part, by the �ield of psychology, a trend which increased during the human relations movement era. Prior to that time, the classical approach to psychology included the belief that human nature was essentially weak and prone to evil (Hjelle & Ziegler, 1981). Not surprisingly, from that vantage point, workers were viewed by management as only being motivated by money (pay) and fear (termination, docking pay, pay cuts). In essence, management in general took a carrot-and-stick approach to supervising entry-level employees.

Clinical psychologist Abraham Maslow was among the �irst to shift views regarding the nature of the human experience. Maslow reasoned that the basic inner nature of a person is inherently good, a perspective which became known as humanism. Maslow expanded the argument by suggesting that life is the process of "getting better." At each new stage of life, the individual becomes more concerned with connecting to, assisting, and serving others. The ultimate expression of life, known as self-actualization, results from performing helpful and meaningful work while staying true to one's own sense of self. This countervailing perspective regarding the nature of people transferred to the workplace. Employees could be viewed as being intelligent, innovative, motivated, and capable of learning and growth. One outcome from this perspective included new theories about the nature of management, such as those summarized in McGregor's Theory Y in the next section.

In addition to organizational behavior and management, Maslow's writings in�luenced the �ields of psychology, social psychology, sociology, and marketing. Much of the research and theory-building that took place in the years following the publication of Maslow's theory included humanist assumptions. In essence, scienti�ic management, which relied on money and fear as primary motivators, was being supplanted by newer, more positive views of employees. Human relations theories incorporate the concept that positive employee attitudes, combined with praise and recognition by supervisors and interesting work, can contribute equally to workplace motivation and productivity (Maslow, 1954, 1998).

Douglas McGregor and Theory X/Theory Y Perhaps the most insightful book related to the �ield of organizational behavior is Douglas McGregor's The Human Side of Enterprise (1960). McGregor proposes two companion theories, summarized in Table 1.2, that crystallize the differences between scienti�ic management and the human relations movement. Theory X expresses the negative assumptions leaders have about their followers: for example, they want to avoid work and responsibility. The logical conclusions managers would draw would be that they should use fear or money to motivate employees. Theory Y represents the opposing perspective, in terms of both assumptions and conclusions made by leaders: for instance, that it is natural for people to want to work, and that motivation comes from within.

Table 1.2: McGregor's Theory X and Theory Y Assumptions of Theory X Assumptions of Theory Y

1. People dislike work. 1. Wanting to work is natural.

2. People avoid responsibility. 2. People seek responsibility.

3. People prefer direction. 3. People enjoy autonomy.

4. Most people have little ambition. 4. Most people are only partially utilized in terms of talents and abilities.

5. Given the opportunity, employees will generate ideas to help themselves and the company.

Assumptions of Theory X Assumptions of Theory Y

1. Leaders should be production oriented. 1. Leaders should be people oriented.

2. Employee motivation is derived from money and fear. 2. Motivation comes from within the individual.

McGregor believed that the Theory X leadership style was ineffective because workers would be underutilized and their potential contributions would be lost. He argued that Theory Y leaders unleash human potential and would help employees and the overall organization achieve at higher levels.

The human relations movement began to wane as technology became more sophisticated. It became apparent that what the Gilbreths had called the quest to identify the "One Best Way" was impossible. Workplace situations are complex and differ from one another. Consequently, neither the scienti�ic management approach nor the humanistic vantage point can provide complete answers as to how an individual can effectively direct a department or an overall organization. This has led to new ideas and concepts about how to manage employees.

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1.3 Modern Management and Organizational Behavior During the 1950s, 1960s, and early 1970s, a series of political, social, and technological trends in�luenced the academic world and the world of commerce. Laws regarding discrimination were enacted; issues regarding gender equality arose; and the government underwent a great deal of scrutiny, most notably as a result of the Vietnam War and the Watergate scandal. The baby boom generation and its insistence on greater freedom gave rise to new social trends. Technology played a major role in shaping the nature of research and the methods used to conduct business. Computerization, miniaturization, and robotics dramatically in�luenced the workplace and the classroom.

The �ield of organizational behavior evolved with the times. In the 1950s, the related college course was often called "industrial psychology" and was taught in psychology departments. As the content moved into schools of business, the most common name for the class was "human relations." Eventually the name shifted to organizational behavior.

Early in the modern era, two concepts in�luenced the overall practice and study of management: systems theory and contingency theory. These two theories created a new context for organizational behavior studies and set the stage for programs like positive organizational behavior.

Systems Theory

Chester I. Barnard introduced systems concepts to the practice of business. Barnard (1938/1968) believed organizations consisted of a series of physical, biological, personal, and social components that form into a cooperative system, which pursues distinct goals and ends. Later, systems theory conceptualized an organization as a set of interrelated parts working together in a holistic fashion. Figure 1.1 portrays a system. The model applies to biological, mechanical, and social systems.

Figure 1.1: A system

Chester Barnard developed systems concepts, which later became systems theory. Systems theory demonstrates how an interrelated set of parts evolves into a holistic process.

In a business system, inputs include raw materials, �inancial resources, and human resources. The transformation process is the company's production function, including the assembly of physical products and the delivery of intangible services. Outputs are the �inished, �inal goods and services sold to the public. The feedback mechanism provides correction and adjustment, keeping the organization in tune with its environment. Control systems, such as performance appraisals of individual employees and annual accounting statements for overall companies, are feedback mechanisms.

Two major developments emerged from systems theory: �irst, the concept that organizations constantly change, and second, that organizations must adapt to the larger environment to continue operations. Prior to systems theory, �irms were often viewed more as a snapshot than as a moving picture. For example, Twitter at its inception was a simple messaging system that did not seek to make a pro�it. But in its current form it is a far different organization. Thus, a single image from years ago would not suf�ice to describe the company.

The need to adapt to the environment led to biological analogies. The �irst, the life-cycle concept, suggests that organizations are born, grow, reach a maturity stage, and eventually decline and die. The second, natural selection, notes that organizations that do not adapt to the environment will be selected out.

Systems concepts apply to employees as well. Humans are biological systems and go through life-cycle phases. Motives and work skill sets evolve over their lives. At the beginning of a career, what is most important to workers may differ greatly from what will motivate them as they approach retirement.

Natural selection also applies to individuals. Workers with skills not suited to the economic environment cannot �ind jobs, which means they are selected out. Such has been the case for many coal workers in the United States as that industry has begun to wane.

Contingency Theory

If one phrase summarizes contingency theory, it might be, "There is no one best way to manage." Contingency theory suggests that organizational variables should be matched with or adapted to the situation at hand. This new approach makes it possible to incorporate advances in technology (speci�ically computers) into research programs. It recognizes that organizational life is complex and requires a more in-depth analysis of the factors involved. In contrast to the concept of searching for a "best way," which appears in both scienti�ic management and the human relations movement, contingency theory proposes a more complex approach to management.

In organizational behavior, no one best motivational system, leadership style, or form of organizational structure and design exists. Instead, if → then approaches to management are required. Many of the theories that have evolved in organizational behavior re�lect contingency thinking, where managers adapt to the situation, company, employees, and other circumstances.

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Contingency theory leaves room for changing circumstances, and can be useful for unconventional work environments to which more prescriptive theories may not apply.

Blend Images/Blend Images/SuperStock Positive Organizational Behavior

Positive organizational behavior is the study and application of positively oriented human resource strengths and psychological capacities for performance improvement in today's workplace. Positive OB has its roots in the positive psychology movement, which began in the late 1990s. Positive psychology primarily focuses on building human strength and was

translated from the �ield of psychology to the �ield of organizational behavior by Fred Luthans. Instead of the quick-�ix self-help approaches often found in the popular press, positive organizational behavior seeks to identify human resource strengths and capabilities that can be measured, developed, improved, and managed. To do so, positive organizational behavior is built on the principles summarized by the acronym CHOSE (Luthans, 2002):

1. Con�idence and self-ef�icacy: I believe I control my own destiny. 2. Hope: I think there is a good chance I will make my numbers this year. 3. Optimism: Even though our team is being asked to do more with fewer resources, we can use this as a chance to shine. 4. Subjective well-being: Each situation requires a unique response. 5. Emotional intelligence: The ability to adapt to change and environmental turbulence.

The positive organizational behavior approach stresses an encouraging work environment in which managers are approachable and employees feel free to express ideas and seek to develop their full potential. This bodes well for every aspect of their organizational lives and includes achieving personal success while increasing company pro�itability and growth.

The basis of positive organizational behavior can be found in concepts such as open-door management, wherein managers offer access to employees, who can ask questions or discuss ideas or problems. It incorporates an emphasis on employee participation as well as Theory Y. Positive organizational behavior emphasizes nurturing and empowering employees.

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1.4 Organizational Careers: Personal and Managerial Factors While an understanding of organizational behavior contributes to overall company success, the study of organizational behavior can contribute to personal success as well. An effective manager—or future manager—understands people. First, however, managers must understand and improve themselves in order to achieve career success.

Self-Management and Personal Success

"Personal success" may be a dif�icult concept to de�ine. For one individual, the concept suggests wealth or fame. For another, success results from moving to the top of the organizational chart and assuming the role of chief executive of�icer (CEO). Another still may view personal success in terms of serving people, including family, friends, and even strangers.

For purposes here, the concept of personal success speci�ically addresses one's career and time spent in business organizations. Whereas management can be de�ined as accomplishing work and organizational goals by assisting, training, and leading others, self-management involves all efforts designed to pursue personal and professional goals. The primary concepts that apply to personal success in that context include

training and preparation �inding the right person–organization �it continuous improvement achieving balance building and maintaining a personal moral and ethical code

Each component contributes important elements to a satisfying career.

Training and Preparation The concept of lifelong learning has swept through much of the academic and business world. New technologies and methods of operation require continuous study. A successful personal career likely includes formal training in the academic world, such as undergraduate and master's degrees; participation in managerial training programs in individual companies; personal efforts to improve skills through conferences, seminars, professional reading, and online research; and discussion with mentors and experts.

Finding the Right Person–Organization Fit For most people, �inding the ideal workplace will not happen with the �irst employment experience. It takes time and several jobs to discover what someone wants in a company. An individual may most value social interaction, the work itself, the opportunity to be promoted, or numerous other, less visible aspects of organizational life. Figure 1.2 models the person–organization �it concept. It implies that when an employee has found the right employer, a series of bene�icial outcomes emerge. Part of career management involves personal awareness regarding what you think is important, combined with seeking to �ind the company that offers the best chance to achieve.

Figure 1.2: A person–organization �it model

The person–organization �it concept suggests that positive outcomes occur when an employee �inds the right employer.

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A careful self-examination will be part of �inding the right �it. Some people belong in a category called "cosmopolitans": persons who �ind the greatest ful�illment in serving the larger profession rather than a speci�ic organization. "Locals" focus on succeeding within the employer company (Goldberg, 1976). In �inding a �it with an organization, cosmopolitans are suited to companies that grant greater autonomy and derive recognition from the external professional activities of employees. Locals �it in most organizations, so long as professional requirements do not eliminate them for obtaining jobs or limit them from being promoted.

Continuous Improvement Beyond lifelong learning, a successful career includes honing personal skills, building relationships, and taking new challenges as time passes. Improving computer skills will make an employee valuable to a range of employers. And individuals who take the initiative to learn a foreign language and better understand the customs of another country may be rewarded with new assignments or business trips abroad.

Early in a career, one form of improvement might involve �inding a mentor who is willing to help a young employee navigate the challenges of a speci�ic company and occupation. Later, continuous improvement involves becoming a mentor to assist and develop others. These and other relationships help make for a ful�illing career based on more than mere on-the-job accomplishments.

Achieving Balance Robert Dubin noted that some employees tend to view work as a central life-interest while others do not. Part of career success includes understanding the role of work in your life. Then, achieving balance helps ensure that work does not dominate to the point that personal time is lost or cannot be enjoyed (Dubin, Champoux, & Porter, 1975).

Experts in the �ields of stress management and time management emphasize the importance of rest and taking a mental vacation from the demands of work. Finding ways to maintain a positive life away from work can lead to improved productivity on the job and greater life satisfaction in general. The opposite, burning the candle at both ends, often results in burnout, a shorter life expectancy, and a less successful career.

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Achieving a balance between work and personal time is an important career objective.

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Work-life balance has been the subject of scrutiny in popular press advice as well as in a great deal of academic research. The concept has been linked to levels of job satisfaction as well as overall organizational performance (Beauregard & Henry, 2009; Abendroth & Dulk, 2011).

In summary, a series of steps must be taken to build a personal career. Success begins with �inding an organization that provides a good personal �it. Then employees can tend to their evolving assigned tasks while also enhancing personal attributes that are of value to the companies they work for. The �inal building block, �inding a balance between life at work and away from the of�ice, helps guarantee that at the end of a career, the individual can take satisfaction in a job well done and a life well lived.

Beyond these aspects of personal career enhancement, one pervasive issue exists: the role of personal ethics. Every part of an organization's operations is affected in one way or another by ethical dilemmas. In organizational behavior, personal conduct, methods of employee training, evaluation, and personnel decisions (hiring, �iring, promoting) can be tinged by unethical actions by individuals or an environment that ignores or even encourages such behaviors. Career success and personal outcomes, in many ways, begin and end with individual decisions regarding how to respond to ethical challenges, many of which are presented in the coming chapters. At this point, consider how ethical concerns affected one company in OB in Action: Wells Fargo.

OB in Action: Wells Fargo

Sometimes the actions of executive management may not seem clearly linked to what takes place at the operational level. At best, this lack of connection can confuse employees or external stakeholders. At worst, it can re�lect an organization in crisis.

In the fall of 2016, Carrie Tolstedt, a key of�icial at Wells Fargo who over saw the consumer banking unit, resigned her position, for feiting millions of dollars in compensation and bonuses. And following blistering criticism by, among others, Senator Elizabeth Warren, Wells Fargo CEO John Stumpf also turned down $41 million in stock awards (Egan & Wattles, 2016).

These dramatic events were precipitated by a program created by Wells Fargo top management in an effort to stimulate company growth. The program was an employee incentive system designed to increase the number of accounts individual Wells Fargo customers held. At the time in the banking industry, the average number of accounts a single customer held with one �inancial institution was three. The goal at Wells Fargo was to increase that number to eight because, in the words of one executive, "Eight rhymes with great." That is, the more accounts a customer held, the more money the bank could collect in interest and fees potentially.

Unable to persuade enough customers to open more accounts and feeling the pressure to meet the new goal, many employees resorted to tactics such as creating small new checking or savings accounts for customers without their knowledge. Accounts were opened and then closed not long after, often leaving the customer responsible for small �inancial penalties and charges for checks that had bounced. Other employees created credit card accounts for customers without informing them. Many employees reported fears of being terminated for failing to meet objectives, and some begged friends and relatives to open accounts to help them meet their quotas.

Some employees felt uncomfortable with the program as soon as it was implemented. One employee reported that he reported his concerns to an ethics hot line and was soon terminated. Such less than subtle pressure undoubtedly had an impact on other employees (Egan, 2016).

When the problems began to surface, Wells Fargo responded by terminating more than 5,000 employees who had created at least two million bogus accounts. Several employees later reacted by �iling a lawsuit against the company for basically coercing them to behave unethically and illegally.

Damage to Wells Fargo took the form of a sharp drop in stock price as well as a barrage of negative publicity. It may take years for the organization to bounce back from what was essentially a motivational program rooted in questionable goals and granting objectionable rewards.

Re�lection and Application Questions

1. Who is the most responsible for the unethical acts in this scenario, low-level employees or top-level managers? 2. If you were an employee at Wells Fargo who encountered this program, how would you respond? 3. What can the executive management team at Wells Fargo do to restore employee, consumer, and governmental con�idence in the company?

Which organizational behavior concepts apply? 4. Would you be willing to go to work for Wells Fargo? What would the company need to do to entice workers to apply in the future?

Build and Maintain a Personal Moral and Ethical Code As the experience at Wells Fargo indicates, employees often encounter situations in which they are forced to respond to mandates posed by others that violate personal moral principles. The many examples of legal and ethical violations presented in this book, along with other similar challenges that arise in one's career, enhance the value of developing and maintaining a personal code of ethics. Many organizations provide tools to assist in dealing with ethical dilemmas; however, an advisable �irst step is for each person to consider what he or she believes are acceptable and unacceptable behaviors prior to commencing any career or joining any organization.

Managerial Skills

While the world of business has changed dramatically over the past several centuries, certain aspects of management remain largely the same. One continuing aspect is the basic distinction between managerial levels. At the core of nearly every company, there are three levels of management:

�irst-line supervision (operational managers) middle management (tactical managers) top management and CEO (strategic managers)

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Over time, as individuals move within the ranks of an organization, their orientations, duties, and required skill sets evolve. Concepts derived from organizational behavior can assist in acquiring and re�ining the talents needed to succeed at each level.

For most employees, the �irst position taken in a company will be at either the entry level as a line worker or as a �irst-level supervisor or manager trainee. Over time and with promotion, the primary focus and duties at each level of management shift along four dimensions (Guest, 1956):

technical, conceptual, managerial orientation speci�ic versus general tasks time orientation: short- versus long-term degree of human relations orientation

First-line supervisors and operational managers are far more likely to be concerned with speci�ic, technical matters. An of�ice manager in a physician's practice will be consumed with making sure that the paperwork associated with billing patients, �iling insurance claims, ordering medical equipment, and other medically-related tasks are correctly completed. A line manager in a manufacturing plant will concentrate on quotas, deadlines, and defects associated with production. A department manager in a retail store spends a great deal of energy managing inventories, creating ingenious displays, teaching effective selling techniques, and engaging in other on-the-�loor activities.

In essence, the managerial orientation rests with the task at hand. Not surprisingly, then, the focus largely remains short term. Deadlines must be met, paperwork must be completed, employee schedules must be �illed out, and other matters that take place in the coming weeks or months receive the greatest amount of attention. At the same time, a �irst-line supervisor spends signi�icant amounts of time working directly with people. In this area, concepts learned from organizational behavior are of great value in completing the more technical, speci�ic, and short-term elements of the job, especially in the areas of motivation, leadership, communication, problem solving, and con�lict resolution.

Middle managers and tactical managers oversee sets of departments or operations. They often hold titles such as plant manager, division head, or operations manager. The increasingly complex nature of meshing various tasks and operations together requires more complex managerial thinking skills that move away from speci�ic tasks to more general processes. Also, even though immediate outcomes remain important, the middle manager is often asked to think about tactical, mid-range subjects, such as plant modernization, acquisition and application of new technologies, or shifts in marketing methods. The decisions have implications that last much longer than the short term. Middle managers also engage with other people, and the roles they play are more complex. The concept of "having a boss while being a boss," or the superior–subordinate syndrome, indicates that middle managers must understand when they have authority and when they do not. They must know how to effectively lead and follow. A wider range of human relations skills becomes necessary.

Organizational behavior may be especially helpful to middle managers in two areas. The �irst evolves from applying knowledge to various situations, which improves a person's conceptual thinking skills while completing longer-range projects. The second results from a greater understanding of maintaining quality relationships with people of higher and lower rank.

Top-level managers, strategic managers, and the chief executive of�icer encounter a vastly different set of responsibilities that require a different orientation from other managerial levels. Top managers must see the big picture. They are required to understand how all parts of an organization's operation are brought together in a smooth, ef�icient, and effective manner. Therefore, conceptual skills and managerial skills are at a premium. Daily routines are more general, consisting of a series of managerial roles that must be played. Table 1.3 displays Henry Mintzberg's classic set of roles played by top managers.

Top-level managers think strategically. Issues that will arise in the long term deserve attention by those in charge of moving the company forward into the next decade. Interpersonal skills remain a vitally important resource, as a manager interacts with employees, suppliers, customers, government of�icials, the general public, union leaders, and other publics. Public speaking skills are a major asset at this level.

In summary, managerial orientation requires technical skills at the lowest ranks that evolve into more conceptual challenges as the person is promoted to middle and top management. Managerial skills are present at all levels, while the managerial tasks performed are somewhat different. The job itself shifts from a speci�ic set of tasks to more general duties at higher levels, and the amount of time spent planning increases. Organizational behavior offers training, models, and concepts that can assist a manager at any rank in the organization, especially in the area of interpersonal relations.

Table 1.3: Roles played by top managers and the chief executive of�icer

Interpersonal roles

Figurehead attends ceremonial, symbolic events

Leader acts as visible director of activities

Liaison interacts with internal departments and external publics

Informational roles

Monitor collects information internally and externally

Disseminator transmits information to internal constituents

Spokesperson transmits information to external constituents and publics

Decisional roles

Entrepreneur develops new ideas, concepts, products, and brands

Disturbance handler deals with unforeseen events and crises

Resource allocator spends resources and designs/signs budgets

Negotiator completes contracts with unions, suppliers, buyers Sources: Henry Mintzberg (1973). The Nature of Managerial Work. New York, NY: Harper & Row; Henry Mintzberg (1975). The Manager's Job, Folklore and Fact, Harvard Business Review, 53 (4), pp. 49–61; Arthur G. Bedeian (1986). Management. Chicago, IL: The Dryden Press.

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The evolution of the workplace is always subject to all manner of external forces. For instance, the election of the �irst African-American president, Barack Obama, marked a cultural precedent that has impacted the entire nation.

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1.5 Management and Organizational Behavior in the 21st Century The concepts presented in the previous section can help an individual build a foundation for a successful career. Ideas regarding training and preparation, �inding the right person–organization �it, seeking continuous improvement, achieving work-life balance, and building a strong personal and moral ethical code have been emphasized by management writers for several decades. They remain as key ingredients in the quest to enjoy a high quality work life and professional career. More recently, however, these activities, while clearly valuable, should be supplemented by an understanding of and adaptation to the new challenges and opportunities that have arisen in the workplace, in individual companies, and in the global arena.

The �ield of organizational behavior has been affected by several trends. The areas that stand out include an evolving workplace as well as globalization. Each alters what is taught in an organizational behavior course and its application in the world of business. They also in�luence personal training and preparation, seeking continuous improvement, �inding the right organization, and they contain new ethical challenges. In essence they constitute new factors that play roles in achieving success in today's world of work and in successfully managing in such rapidly evolving circumstances.

The New and Evolving Workplace

Traditional principles of management textbooks examine �ive main forces present in the non- controllable external environment that demand a manager's attention: political, social, economic, technological, and competitive. The 21st century has already witnessed dramatic shifts in each of these areas. From the election of the �irst African-American president to the most recent presidential election, the political arena continues to evolve. Numerous social trends affect culture, business, and everyday life. The Recession of 2008 increased unemployment and profoundly in�luenced many companies. Technology introduced a sweeping number of new products and product features that have made the pace of business even faster. Competition has shifted to a worldwide marketplace.

The rate of change in the world of business continues to increase. Only a few decades ago, overnight package delivery was not possible. Contracts and documents traveled via the postal system, making any transaction take longer to complete. Air travel was the fastest mode of transportation, but now, with teleconferencing and other devices, interpersonal meetings with people around the world take place in real time. Terms such as "tweet" and "going viral" did not exist. Managers in the 21st century are expected to complete their functions while coping with a series of trends and changes in the workplace, including the following:

innovation and change connectivity and networked organizations employment of temporary workers

Innovation and Change Technology's impact tends to be widely discussed and evaluated. New technologies have changed everyday lives of people, both at work and off-site. An evaluation of technology would suggest that technological innovation comes in many forms, including those displayed in Figure 1.3.

Managers are expected to adapt to an increasing number of changes. The emergence of 3-D printing is likely to create dramatic effects on a variety of industries, from medicine at one extreme to the building of weapons at the other. Digital technologies have rapidly transformed various entertainment companies, from the production and delivery of music to television programs and movies. Technology also in�luences how employees interact, via social media and other devices rather than in-person, as well as how entire companies transmit information to employees and customers.

Figure 1.3: Technology and change

As technology changes, managers are expected to adapt. This �igure presents examples of recent technological advances that impact the business environment.

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(http://www.shingo.org/)

At the same time, in terms of change, technology only represents part of the equation, especially in the workplace. Dramatic changes continually take place in four additional areas: political and legal forces, social trends, economic shifts, and competitor actions.

The political and legal environment is in a constant state of �lux. Laws regarding privacy, identity protection, and other personal matters in�luence what managers can and cannot examine. Medical records may be increasingly available but should not be viewed by anyone other than licensed physicians and medical personnel. In 2011, challenges to the rights of unions were made by legislatures in both Ohio and Wisconsin. As the political landscape shifts, other regulatory changes that affect employees can be expected.

In the interaction between the social and legal environments, the 2015 Supreme Court decision regarding same-sex marriage has changed the landscape for many companies and their employees. Other court actions regarding responsibilities for providing insurance, especially for personal issues such as birth control, have created con�lict and controversy. In addition, diversity and illegal immigration issues persist in the national consciousness. Managers are expected to go beyond understanding the questions surrounding these issues to �ind workable solutions.

Economic forces have an impact on national and international companies, and are frequently in �lux. Downturns and layoffs were prevalent in the early part of the 2000s. Deciding who to rehire and when is one of many managerial considerations affected by economic conditions.

Competitive forces continue to change the jobs managers perform. They are expected to respond to competitive efforts in the areas of acquiring customers and making sales, but also in terms of hiring and keeping the best workers, obtaining loans in competitive lending situations, and developing and adapting relationships with the best suppliers.

Connectivity and Networked Organizations Another category of trend that managers must adjust to is in the realm of connectivity and networked organizations. The virtual workplace, in which employees and departments are connected digitally, is a recent innovation in the world of business. Networked organizations establish high-speed connections between members of the company around the world. This type of connectivity makes it possible to manage a �irm more ef�iciently. Employees have vital information at their �ingertips. Better decisions can be made without the same level of speculation and lost time that took place previously.

A networked company can better serve employees and customers. Use of cloud computing enables individuals and organizations to collect and store information in new ways. For example, a service employee with access to customers' preferences and shopping patterns can better address their needs. The employee will have access to information about previous contacts with the customer, both positive and negative. Entire organizational records regarding a variety of company functions can be stored on the cloud.

Many �irms have virtual connections with other companies. Project management may be shared by two cooperating �irms. Other companies submit orders, create packing labels, track shipments, send bills, and receive payments electronically. The virtual workplace means that two individuals do not have to be in the same room to work together. The rapid growth of mobile technologies makes it possible to make contact with others around the world in an instant.

The potential problem with connectivity is inundation with too much information and too many messages. Any manager who is away for a week returns to an onslaught of emails that have backed up. Messages may become lost when too many arrive at the same time. Further, computer hacks into company systems cause serious problems and concerns for managers and their employees.

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Globalization has changed and continues to change the landscape of business in the United States and abroad.

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Personal privacy issues have grown, as many �irms maintain large amounts of information about individual employees and customers. At times such information is sold to other companies or is taken by hackers for purposes of exploitation.

At the least, the 21st-century manager will be expected to use connectivity in daily work activities. Connectivity will in�luence how managers do their own work as well as how they interact with employees, customers, and any other individuals who make contact with the company.

Employment of Temporary Workers Many 21st-century managers also cope with a less stable work force. Firms hire temporary workers to reduce labor costs and cope with economic downturns. These individuals are not entitled to the same bene�its as full-time, permanent employees. To the manager, the challenge is constant training and making sure a temporary worker is able to perform assigned tasks. The individual will be less loyal to the company and not share the same degree of mental involvement. Most temporary workers will have less experience at a given task and reduced knowledge about the employer �irm. Managers can expect to be involved in more hands-on, day-to-day direction of these types of workers.

It is nearly impossible to keep up with or predict what will happen in the coming years. Popularity and usage of the various social media platforms is in constant �lux, and improvements in these technologies are introduced nearly every day. Each of the trends noted in this section, from changes in the workplace to increased connectivity, increased use of temporary workers, and greater challenges to the work-life balance, may evolve into some new form. Just as many television providers are beginning to offer 3-D programming, the impact of technology on the workplace and the nature of the managers will continue to progress.

Globalization and Global Management

The reach of even the smallest business has changed. The Internet and improved shipping capabilities have made it possible for smaller companies to attract customers around the world. At the same time, global conglomerates continue to adapt and expand. Mergers, acquisitions, partnerships and trade relationships, and a growing number of trade agreements among nations have affected the ways in which business is conducted.

Globalization has a noticeable impact on the availability of products and services to customers. The rising number of product choices has improved the standard of living for many people. The spread of mobile communications products serves as an example. People around the world have access to cell phones and the Internet through handheld devices. As the new century unfolds, the trend toward a greater number of product choices will continue (World Trade Organization, 2011).

The global marketplace also affects how managers operate. A series of new challenges awaits anyone interested in conducting international business, especially in the area of human resources. Managers engaged in international trade can expect to encounter issues in the following areas:

selection of home- versus host-country employees and managers understanding of how cultural and language differences in�luence business activities reaction to international trends

Employee and Manager Selection An organization's general strategic approach forms the basis for all other business operations. It affects many of the company's business activities, including employee selection processes. Each �irm exhibits one of three mindsets: ethnocentric, polycentric, or geocentric. Each presents a set of options (Baack, 2005).

In the �irst approach, ethnocentric management, home-country employees will be selected and trained for overseas assignments. The strategy is often preferred by companies exporting to regions with the same or a similar culture. For example, a Canadian company might hire someone and train that individual for assignments in the United States and Great Britain, simply because it would be the easiest choice. Persons in those countries speak the same language and practice the same or similar religions. The relatively low level of cultural adaptation required makes it possible to simply assign a current employee to one of these new international locations. Such individuals are called "expatriate employees," or "expatriate managers" when they serve in supervisory roles. Some expatriates require training in a foreign language and must have an open mind regarding cultural differences. For example, an expatriate manager assigned by a U.S. company to a branch in France would �ind it useful to speak French and to understand the nuances of life in that country. Such nuances are not signi�icantly different in many ways from those in the U.S. but still do exist.

A second option, polycentric management, involves hiring someone from the target host country. These individuals have the natural advantage that comes from knowing the culture of the host country. They will need to be trained to understand how the home country's business operates, including managerial practices. They might discover that the leadership style is different and that the company will need to respond to motives and incentives that differ from those that drive local companies. In polycentric organizations, people in the �irm may communicate differently. In essence, they do not have to adapt to a new country, but rather to a new company.

Some companies employ geocentric management, in which third-party nationals are often hired. These employees are not citizens of the home or host country. At times, someone with a truly international point of view has the greatest advantage. They can adapt to a wider range of cultural variations.

Cultural and Language Differences Business is conducted in diverse ways, depending on the culture of the country. Successful business people investigate these differences prior to visiting a foreign land. Some examples of cultural nuances include activities such as building relationships before talking business, dining and meals as part of the business interaction, gift-giving protocols, the use of titles and surnames, and even presenting a business card.

The �irst requirement for any international assignment is acceptance that there will be differences in culture. Culture shock is a feeling of disorientation that often occurs when an individual �irst arrives in a new country. Many customs will seem different, beginning with something as simple as a greeting (a bow versus

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Effective managers must stay abreast on major geopolitical events, such as the United Kingdom's exit from the European Union in 2016. Events like this one, which is colloquially named "Brexit," have implications for organizations all over the world.

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a handshake). Cultural sensitivity is the ability to understand and accommodate individuals from other cultures. It includes awareness of differences in religion, manners, dining and foods, and other matters associated with everyday living and the conduct of business. Those who do not or cannot accommodate other cultures exhibit ethnocentrism, or the belief that one's culture is inherently superior to others. Such individuals will experience major problems on international assignments.

Language skills are useful in many international business relationships. At the least, knowing how to greet someone in his or her native language often begins a transaction on a much more cordial note. Those who know a second language have a distinct advantage in today's employment marketplace, and in general, international business includes adaptation to foreign languages. Someone from France conducting business with a person from the United States will need to �ind a language that both can understand. Slang complicates the issue of language barriers. Even someone trained to speak French will soon discover that natives use a great deal of terminology not taught in formal classes. Additional barriers to international communication include (Baack, Harris, & Baack, 2012) the following:

not knowing if it is appropriate to address someone directly or to speak in a deferential manner not knowing whether it is culturally acceptable to make eye contact or avert one's eyes displaying ethnocentrism and stereotyping of other cultures failure to understand differences in the meanings of nonverbal cues not knowing how to deal with personal space issues not comprehending the use of symbols and cultural icons

Successful international managers are aware of differences in communication patterns. They then adapt in ways that make business transactions comfortable while reducing the potential for con�lict and misunderstanding.

Ethics awareness, another key aspect of cultural difference, means being aware that cultural values and methods of conducting business vary. What might be considered a gift in one country will be viewed as a bribe in another nation. Many countries allow bribery and allow the amounts given to serve as tax write-offs. Gender roles are substantially different in various parts of the world. In some cultures, women may not be allowed to speak or take part in business transactions. Labor laws do not protect workers in many nations, which means child labor is used, living wages are not paid, and safety procedures are limited or do not exist. Each individual and company decides what is acceptable and what is not (Baack & Baack, 2009). Many companies employ a cultural assimilator to assist in these matters. The assimilator is someone well versed in the local culture who helps others adapt to the foreign situation.

Evolving International Trends In 2011, a series of nations in the Middle East experienced upheaval. Egypt, Syria, Bahrain, Iran, and other countries underwent protests and attempts to transform local governments. At about the same time in the United States, anti-Muslim sentiment rose to new heights, as evidenced by the negative reaction many had to the construction of an Islamic activity center in New York City, near the site of the World Trade Center.

More recently, the decision by Great Britain to leave the European Union (Brexit), the in�lux of refugees from Syria into numerous other countries, the growth and in�luence of ISIS (or ISIL), combined with numerous terrorist attacks around the globe have increased sensitivities regarding activities as basic as visiting foreign countries and as complex as the seeking to engage in international trade. The Trans-Paci�ic Partnership (TPP) agreement became a contentious issue in the 2016 election cycle, as some in the United States opposed the agreement while others favored it.

Any political or economic event that in�luences another country has a potential impact on international business relationships. Effective global managers consider these events and try to understand how their company's interests may be affected. Political knowledge includes keeping up with current events and seeking counsel to understand how those events affect business operations. Many times, political con�licts result from cultural misunderstandings and ethnocentrism.

Organizational behavior can be expected to change with increasing globalization. A greater amount of research will be dedicated to understanding cultural differences. The GLOBE project is a research program in the area of leadership that addresses cultural nuances. The project is made up of scholars from 61 different cultures who are working together to develop a theory of how cultural variables affect leadership and organizational processes throughout the world. Other programs will undoubtedly be designed to help employees cope with international assignments (Hill, 2003).

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Summary and Resources

Chapter Summary

Organizational behavior (OB) is the investigation of the behavioral factors that affect modern organizations and their management at the individual, group, and organization-wide levels.

Organizational behavior includes concepts from the �ields of psychology, social psychology, sociology, organization theory, human resource management, history, research methods and statistics, and anthropology. OB is a hybrid �ield that incorporates ideas from these and other disciplines.

Historically, the scienti�ic management approach came �irst. Frederick W. Taylor developed the principles that merged scienti�ic concepts with the practice of management. Frank and Lillian Gilbreth incorporated the principles to create the time and motion study. Henri Fayol wrote about planning, organization, staf�ing, directing, and controlling at about the same time.

Scienti�ic management was challenged by the human relations movement, beginning with the work of Mary Parker Follett. The Hawthorne studies, Maslow's views of humanism, and the concepts found in Theory X and Theory Y followed.

Modern management and organizational behavior approaches include systems theory, contingency theory, and positive organizational behavior.

Management is accomplishing work and organizational goals by assisting, training, and leading others. Self-management involves all efforts designed to pursue personal goals. Self-management requires training, preparation, �inding the right person–organization �it, continuous improvement, achieving balance, along with building and maintaining a personal moral and ethical code.

Managerial skills need to evolve as a person is promoted from �irst-line supervision to middle and top management roles. Technical, conceptual, and managerial orientation change, tasks move from speci�ic activities to more general work, the manager's time orientation tends to move toward the longer term, and the degree of human relations orientation evolves as a person moves upward through the organization's ranks. Top-level managers engage in interpersonal, informational, and decisional roles.

The �ields of management and organizational behavior have been in�luenced by elements of the non-controllable external environment. These include rising levels of diversity in the workforce, new ethical challenges, an evolving workplace and increasing globalization. The evolving workplace has witnessed higher levels of connectivity and networking among individuals on the job. Social media and other technologies continue to in�luence the ways in which people work. Further, all employees and managers will be exposed to cultural differences, both within a country and in dealings with individuals and organizations from other nations. Language skills and cultural sensitivity become valuable assets in those settings.

CASE STUDY: The New Supervisor

Jose Torres drove to work for his new assignment with a big smile. He was excited about becoming the manager of a mobile phone retail store. His duties included serving customers, problem solving, creating an inviting store environment, training and motivating the other salespeople, tracking inventory, and designing special events. Even though he was 26 years old, and two of his employees were over 30, Jose was ready for the challenge.

Within a week, the smile was gone. Jose quickly discovered that the two older workers were more than willing to take shortcuts. Some of the things they said to customers bordered on being false, or misleading at best. The two employees also would count sales until the monthly quota was reached, and then "bank" any extra to get a good start on the next month. This hurt the store's potential pro�itability statements and would make Jose look bad.

Jose's boss, Marcia, deemed herself "old school." She warned him that her view was that retail store employees were only there because they couldn't �ind or hold better jobs. She expected them to cheat on quotas and basically "live down" to her expectations. "The only thing that keeps them here is a paycheck, so you'd better use it to your advantage. You can always cut their hours or schedule them at times when there is less traf�ic—to make the point that you are in charge."

Marcia's advice ran counter to what Jose believed. He knew that the economy was tough, which may have led some to take jobs that were not the best �it. At the same time, he sincerely believed no one takes a job wanting to fail.

Unfortunately, it was not long before Jose began hearing that some employees complained that they were working at Taco Bell, partly due to his ethnic background and because a greater number of Hispanic customers had begun to visit the store. Other ethnic slurs followed. Although he was never confronted directly, it was clear that most of the workforce did not respect him. Jose observed that most of the disrespect came from male employees.

Jose called a meeting. He handed each employee a review of his time with the company. It showed that he had set sales records nearly every month in his previous store, where he was not a supervisor. He told them that it was possible for each one of them to raise their sales and increase their bonus checks, if they would simply listen to his counsel. One of the older workers responded, "That will never happen. Even if we sell more, Marcia �igures out a way to make our pay come out the same." It was clear that some kind of change was in order.

Case Questions

1. Describe Jose's basic workplace philosophy. Does it �it this situation? 2. What organizational behavior concepts apply to management? To employees? 3. What type of leader is Marcia? Does her style make better sense for this company? 4. How could Jose build a better environment in the store? Or should he simply terminate the workers and start over?

Review Questions

Click on each question to see the answer.

De�ine organizational behavior. (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

Organizational behavior (OB) may be de�ined as the investigation of the behavioral factors that affect modern organizations and their management at the individual, group, and organization-wide levels.

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What academic disciplines are related to organizational behavior? (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

Organizational behavior includes concepts from the �ields of psychology, social psychology, sociology, organization theory, human resource management, history, research methods and statistics, and anthropology.

De�ine scienti�ic management. Who �irst proposed the principles of scienti�ic management? (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

Scienti�ic management merged classic scienti�ic principles with what was known about the practice of management. It was proposed by Frederick W. Taylor.

What is a time and motion study? (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

A time and motion study involves the use of a stopwatch or �ilm to develop more ef�icient methods of completing work tasks.

What were the primary �indings of the Hawthorne studies? (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

The subjects responded to positive and pleasant interactions with researchers by increasing productivity rates on the job. Some of the tasks performed by supervisors were eventually assumed by entry-level employees, who also generated higher levels of production, because the workers found the experience to be "fun" and free of anxiety about being disciplined for poor performance. Workers tended to form groups that were cohesive and loyal to one another. Anyone who overproduced became a "slave" or "speed king" who was derided and even physically punched in the arm ("binging") by group members. Anyone who failed to do his fair share of work was labeled a "chiseler" and admonished to keep up with the group.

What is humanism? How did beliefs about humanism affect the �ields of management and organizational behavior? (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

Humanism is the belief that the inner nature of a person is inherently good and that life is the process of "getting better." Scienti�ic management, which relied on money and fear as primary motives, was being supplanted by newer, more positive views of employees. Human relations theories incorporate the concept that positive employee attitudes, combined with praise and recognition by supervisors and interesting work, can contribute equally to workplace motivation and productivity.

What are the assumptions and conclusions of Theory Y? (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

Theory Y assumes that wanting to work is natural, people seek responsibility, people enjoy autonomy, most employees are only partially utilized in terms of talents and abilities, and, given the opportunity, employees will generate ideas to help themselves and the company. It concludes that leaders should be people oriented and that motivation comes from within the individual.

Explain the parts of a systems theory model in terms of a business organization. (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

In a business system, inputs include raw materials, �inancial resources, and human resources. The transformation process is the company's production function, including the assembly of physical products and the delivery of intangible services. Outputs are the �inished, �inal goods and services sold to the public. The feedback mechanism provides correction and adjustment, keeping the organization in tune with its environment. Control systems, such as performance appraisals of individual employees and annual accounting statements for overall companies, are feedback mechanisms.

In terms of positive organizational behavior, what roles do popular-press books and scienti�ic research play? (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

Popular press offers a quick �ix. Positive organizational behavior seeks to identify human resource strengths and capabilities that can be measured, developed, improved, and managed.

De�ine management and self-management. (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

Management is accomplishing work and organizational goals by assisting, training, and leading others. Self-management involves all efforts designed to pursue personal goals.

What ingredients help build a solid business career? (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

Self-management requires training, preparation, �inding the right person–organization �it, continuous improvement, and achieving balance.

What three levels of management require quality interpersonal skills? (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

First-line supervisor, middle management, and top-level management.

What are the four managerial orientations and duties that shift by hierarchical rank in a company? (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

Technical, conceptual, and managerial orientations change, tasks move from speci�ic activities to more general work, the manager's time orientation tends to move toward the longer term, and the degree of human relations orientation evolves as a person moves upward through the organization's ranks.

What global management skills are vital to 21st-century managers? (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

Skills include selecting home- versus host-country employees and managers, adaptation to the local language, understanding how cultural differences in�luence business activities, and reacting to international trends.

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What is meant by the term "ethnocentrism"? (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

Ethnocentrism is the belief that one's culture is inherently superior to others.

What factors create a new and evolving workplace in the 21st century? (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

Innovation and change, connectivity and networked organizations, and employment of temporary workers.

Analytical Exercises

1. Analyze this statement: "There are Theory X situations. There are Theory Y situations. There are Theory X workers. There are Theory Y workers." How does this statement relate to contingency theory? Can you think of situations in which only one of these four thoughts is accurate? Are there other situations in which none of the four truly applies? Explain your reasoning.

2. Explain the common elements in the work of Mary Parker Follett, the Hawthorne studies, Theory Y, Maslow's humanism, and positive organizational behavior. Contrast these ideas with scienti�ic management, Theory X, and the time and motion study. How do all of these theories contrast with systems theory and contingency theory?

3. Are there circumstances under which the demands of management interfere with self-management? Why or why not? 4. Make a list of the �ive most important elements in a job for you personally. Using the person–organization �it model, explain the type of company in

which you would like to work. Think of your response in terms of your current situation and then prepare a second list for 20 years from now. What will have changed?

5. Explain how relationships with entry-level employees would be different for each level of management. 6. Which of the factors that are part of the new and evolving workplace present the greatest challenges to 21st-century managers? Explain your answer.

Key Terms

Click on each key term to see the de�inition.

construct (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

A term used to represent an unobservable process.

contingency theory (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

A managerial approach in which organizational variables are matched with or adapted to the situation at hand.

cultural assimilator (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

A company employee who assists others in adapting to new countries and cultures.

culture shock (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

A feeling of disorientation that often occurs when an individual arrives in a new country.

ethnocentrism (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

The belief that one's culture is inherently superior to others.

humanism (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

The belief that the basic inner nature of a person is inherently good.

human relations movement (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

An approach that focuses on the behavior of people rather than solely on productivity.

hybrid �ield (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

A branch of study that draws from a variety of academic disciplines.

life-cycle concept (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

In systems theory, the idea that organizations are born, grow, reach a maturity stage, and eventually decline and die.

management (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

Accomplishing work and organizational goals by assisting, training, and leading others.

natural selection (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

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In systems theory, the concept that organizations that do not adapt to the environment will be selected out.

organizational behavior (OB) (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

The investigation of the behavioral factors that affect modern organizations and their management at the individual, group, and organization-wide levels.

positive organizational behavior (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

The study and application of positively oriented human resource strengths and psychological capacities for performance improvement in today's workplace.

reliability (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

The extent to which a variable can be consistently and repeatedly measured in research.

scienti�ic management (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

An approach that merges classic scienti�ic principles with what is known about the practice of management.

self-management (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

All efforts designed to pursue personal and professional goals.

systems theory (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

A viewpoint that conceptualizes an organization as a set of interrelated parts working together in a holistic fashion.

validity (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

The extent to which a study measures what it purports to measure and its research �indings can be generalized to other groups.

virtual workplace (http://content.thuzelearning.com/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633.17.1/sections/cover/books/Baack.3633

Digitally networked sets of employees and organizational departments.

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