CH-7-8 Trust, Justice, and Ethics – Organizational Behavior: Improving Performance and Commitment in the Workplace : Chapter Notes

This Document Contains Chapters 7 to 8 Instructor’s Manual: Ch. 7: Trust, Justice, & Ethics CHAPTER OVERVIEW This chapter covers the topics of trust, justice, and ethics. Trust, or the willingness to be vulnerable to an authority based on positive expectations about the authority’s actions and intentions, is discussed from the perspective of personality, cognition, and affect. Four different types of justice, or the perceived fairness of actions, are discussed – distributive justice, procedural justice, interpersonal justice, and informational justice. Finally, ethical decision making is explained in terms of moral awareness, moral judgment, and moral intent. The chapter concludes by showing how ethical organizations emphasize corporate social responsibility to help their employees meet the economic, legal, ethical, and citizenship expectations of society. LEARNING GOALS After reading this chapter, you should be able to answer the following questions: 7.1 What is trust, and how does it relate to justice and ethics? 7.2 In what three sources can trust be rooted? 7.3 What dimensions can be used to describe the trustworthiness of an authority? 7.4 What dimensions can be used to describe the fairness of an authority’s decision making? 7.5 What is the four-component model of ethical decision making? 7.6 How does trust affect job performance and organizational commitment? 7.7 What steps can organizations take to become more trustworthy? CHAPTER OUTLINE I. Trust, Justice, and Ethics A. Reputation - the prominence of a brand in the minds of the public and the perceived quality of its goods and services. It depends largely on trust. B. Trust – the willingness to be vulnerable to an authority based on positive expectations about the authority’s actions and intentions 1. Authorities can be either person-based or organization based 2. Trust is often dependent on two related concepts: a. Justice – the perceived fairness of an authority’s decision making b. Ethics – the degree to which the behaviors of an authority are in accordance with generally accepted moral norms II. Why Are Some Authorities More Trusted Than Others? A. Trust 1. Three types of trust a. Disposition-Based i. Some people have personality traits that include a general propensity to trust others OB Assessments: Trust Propensity. This brief assessment helps students to determine their inherent levels of trust. Use a show of hands to see how many students fell above and below the average level, and see if students will volunteer any extremely high or low scores. When discussing the results of the assessment, ask students to vote on which is more damaging: being too trusting or being too suspicious. Ask students to describe the consequences of being too trusting (most will note that you can be taken advantage of or you could delegate to ineffective people). Also ask students to describe the consequences of being too suspicious (many will note the strain that would be brought on by monitoring, checking up, and not delegating, or the harm to interpersonal relationships when someone fails to trust). Please see the Instructor PowerPoints for Bonus Assessments on Procedural Justice and Moral Attentiveness. Please see the Connect assignments for this chapter for assessments on Justice Orientation and Moral Identity. Please email me at [email protected] if you have any questions about using these assessments in your teaching. ii. Trust propensity is a product of both genetics and early childhood experiences iii. Trust propensity is also influenced by experiences in later life and national culture Try This! Ask students if they have any experiences in countries from Figure 7-2 that are especially high or low on trust propensity. Do they have experiences that are consistent with the rankings in the figure? Do they have experiences that are inconsistent with those rankings? How would those trust propensity levels manifest themselves in national norms, routines, practices, and laws? b. Cognition-based Trust i. Cognition-based trust is based on what we know about an authority – our understanding of that authority’s “track record” ii. Track records are gauged on three dimensions: a. Ability – the skills and abilities that enable an authority to be successful in a given area b. Benevolence – the belief that the authority wants to do good for the trustor, apart from any selfish or profitcentered motives c. Integrity – the perception that the authority adheres to a set of values and principles that the trustor finds acceptable OB on Screen: Man of Steel. The clip referenced in the book begins around the 1:08:55 mark of the film, continuing until about the 1:14:00 mark. The clip depicts Clark Kent as he struggles with the decision to turn himself into the U.S. government. They, in turn, will give him to General Zod, a Kryptonian criminal who has arrived on Earth. Clark has lived a life of secrecy for the past 33 years, concerned about what mankind would do to him (and his adopted parents) if they knew an alien was living in their midst. The clip depicts that concern, but also reveals the other side of the trust equation. Mankind, for their part, is worried about the benevolence of a superpowered being who cannot be handcuffed or controlled. Ask the students how much of the mutual distrust is cognition-based and how much of it is affect based. Then ask them what would have to happen, on both sides, for that distrust to change to trust. Obviously we know from other Superman stories and movies that he is eventually trusted by the people of the world. Why? What has changed? Bonus OB on Screen (from 2nd and 3rd ed): Slumdog Millionaire. The clip referenced in the book begins around the 1:27:29 mark of the film, continuing until about the 1:35:16 mark. The clip depicts Jamal Malik’s dilemma as the host of the game show apparently sneaks him the answer to the next question. The clip provides a dramatic demonstration of the definition as trust, as Jamal must decide whether to accept vulnerability to the host by saying that answer, with a chance at a million dollars on the line. Poll the class to see how many would have gone with the answer that the host provided. Then ask them which trustworthiness dimension would have been most relevant to their trust levels. They will probably draw most on integrity, given that the host himself has broken the rules of the show by sharing an answer. However, they may also realize that the host lacks benevolence, as he doesn’t want Jamal’s fame to surpass his own. Please email Jason Colquitt ([email protected]) if you have any questions about using OB on Screen in your teaching. Bonus OB on Screen (from 1st ed): Pirates of the Caribbean: The Curse of the Black Pearl. The clip referenced in the book begins around the 8:51 mark of the film, continuing until about the 16:05 mark. The clip depicts Captain Jack Sparrow. Jack’s behavior during the clip reveals that he’s not particularly trustworthy, which isn’t surprising for a pirate. The key issue for class discussion is “why aren’t pirates trustworthy?” The answer lies in a combination of poor integrity (pirates lie and steal a lot) and low benevolence (pirates are motivated purely by profit-centered motives). In Jack’s case, he demonstrates more benevolence than most pirates, as shown by his rescue of Elizabeth—the drowning woman. Still, that benevolence isn’t quite enough to offset all the lies Jack tells throughout the film. c. Affect-based Trust i. Affect-based trust is emotional – it is based on the feelings we have for people, not rational evaluations of their trustworthiness a. May act as a supplement to other types of trust – is built up over time B. Justice 1. Distributive Justice – perceptions of fairness related to whether or not outcomes have been allocated in accordance with accepted norms a. Most common norm in business settings is equity – more outcomes should be given to people who contribute more inputs 2. Procedural Justice – perceptions of fairness related to whether or not the rules of fair process have been followed a. Rules of Fair Process i. Voice – do employees have a chance to express their opinions? ii. Correctability – can employees request an appeal when a procedure seems to have worked ineffectively? iii. Consistency – are procedures consistent across people and time? iv. Bias suppression – are procedures neutral and unbiased? v. Representativeness – do procedures consider the needs of all groups? vi. Accuracy – are procedures based on accurate information? Try This! Take some decision making procedure that a number of students will be familiar with. It could be the procedure used to elect U.S. Presidents, the procedure used to crown a college football champion, the procedure used to decide which students are eligible for tickets to university sporting events--anything with which most students would be familiar. Then ask the students to analyze the fairness of the procedure using the procedural justice rules in Table 7-2. How is the process fair, or how is the process unfair? b. Research shows that procedural justice is a stronger driver of reactions to authorities than distributive justice 3. Interpersonal Justice - perceptions of fairness related to whether or not authorities treat people with fairness when implementing rules a. Rules for Fair Treatment i. Respect rule – are people treated in a dignified and sincere manner? ii. Propriety rule – do authorities refrain from making improper or offensive remarks? b. Abusive Supervision - behaviors that are extremely unfair from an interpersonal justice perspective, with sustained displays of hostile verbal and nonverbal behavior (excluding physical contact) 4. Informational Justice - perceptions of fairness related to whether or not the communications provided to employees during organizational decision making are fair a. Rules for Fair Communication i. ustification rule – have authorities explained the decision-making procedures and outcomes in a comprehensive and reasonable manner? ii. Truthfulness rule – have authorities been honest and candid in their communications? b. Informational justice can have a large impact on an organization’s bottom line. In one research study, a company offered two different explanations for a pay cut at two different plants. In the plant with a short, impersonal explanation for the pay cut, employee theft was five percent higher than it was at the plant where employees were given a longer, more sincere explanation for the pay cut. 5. Summary a. When authorities adhere to the justice rules in Table 7.2, they are more likely to be seen as trustworthy C. Ethics 1. Research on ethics seeks to explain why people behave in a manner consistent with generally accepted norms of morality, and why they sometimes violate those norms 2. 76% of employees have observed illegal or unethical conduct on the job within the past 12 months, and that figure may be higher in some countries. OB Internationally. This table shows that different countries have very different baseline levels of unethical actions. If you have international students, try to start a conversation with the class about specific behaviors that might be considered ethical in one country and unethical in another. What is it that makes a behavior ethical or unethical? Do students believe that having a code of conduct, such as the one discussed in the box, will be enough to significantly alter employee behaviors in other countries/cultures? Why or why not? 3. Four Component Model of Ethical Decision Making Asset Gallery (Ethics & Social Responsibility/Hot Seat): Ethics: Let’s Make a Fourth Quarter Deal. This Hot Seat feature shows a manager of a struggling department as he is confronted with the opportunity to make a career-saving, but likely unethical, business deal. The conversation reveals a number of issues that impact moral decision making, including issues of moral awareness, moral judgment, and moral intent. a. Moral Awareness – Occurs when an authority recognizes that a moral issue exists in a situation or that an ethical standard or principle is relevant to the circumstance i. Moral awareness depends on: a. Moral intensity, or the degree to which the issue has moral urgency i. Moral intensity is driven by two general factors (see Table 7-4) a. Potential for harm b. Social pressure b. Moral attentiveness, or the degree to which people chronically perceive and consider issues of morality b. Moral Judgment – Occurs when an authority accurately identifies the morally “right” course of action i. Moral judgment depends on: a. Stage of cognitive moral development i. preconventional - right and wrong is based on consequences of actions for the individual ii. conventional - right and wrong is based on the expectations of family and society iii. principled/postconventional - right and wrong is referenced to a set of defined, established moral principles (see Table 7-6). Some principles are consequentialist, meaning the morality of the acts depends on their goals, aims, or outcomes. Other principles are non-consequentalist, emphasizing instead formal codes or standards. c. Moral Intent – reflects the authority’s degree of commitment to a moral action i. Driven by moral identity – the degree to which people see themselves as a “moral person” Try This! Describe a scenario for your students that could be used as an example for the parts of the four-component model. For example: assume a student “heard through the grapevine” that other students had obtained an advanced copy of the final exam in the class. Should the student report this to the professor? Based on Table 7-4, how morally intense is this issue, and why? Based on Table 7-6, which course of action is most morally right, and why? D. Summary: Why Are Some Authorities More Trusted Than Others? (Review Figure 7-8) III. How Important Is Trust? A. Trust has a moderate positive effect on performance, because it influences an employee’s ability to focus and because it fosters the development of a social (rather than merely economic) exchange relationship. B. Trust has a strong positive effect on commitment, because trust increases the likelihood that an emotional bond will develop between employer and employee i. Driven by moral identity – the degree to which people see themselves as a “moral person” OB at the Bookstore: The Speed of Trust. The author notes that decreased trust leads to decreased speed and increased cost in organizations, termed the “distrust tax”. The author contrasts this with the “trust dividend”, where high trust amplifies the gains derived from employee skills and efforts. Ask students to describe experiences in jobs or other class projects where they’ve grappled with the distrust tax, or benefitted from the trust dividend. Which types of experiences are easier to recall? IV. Application: Corporate Social Responsibility A. The idea of corporate social responsibility acknowledges that organizations must take the economic, legal, ethical, and citizenship expectations of society into account when conducting their business Asset Gallery (Trust, Justice, Ethics/OB Video DVD): Good Deeds. This News Hour video clip explores exactly how firms can “do well by doing good.” It explores whether a reputation for ethics can enable employers to recruit better employees and appeal to a more devoted and enthusiastic customer base (that is willing to pay higher prices). The clip discusses a number of different firms that engage in a number of different kinds of ethical actions. DISCUSSION QUESTIONS 7.1 Which would be more damaging in organizational life--being too trusting or not being trusting enough? Why do you feel that way? Answer: This discussion could parallel the discussion of the OB Assessment on trust propensity. When one is too trusting, one risks being taken advantage of, or entrusting important tasks to people who are not competent enough to do them. That tendency could be damaging at times, certainly. However, not being trusting enough could create more daily wear-and-tear on an employee. Being suspicious requires monitoring and the creation of backup plans, both of which distract from task effort. Moreover, trusting others is an empowering experience that can build bonds between coworkers. Being suspicious too often could harm such relationships. In organizational life, not being trusting enough is generally more damaging than being too trusting. Here’s why: • Impact on Collaboration: A lack of trust can hinder teamwork, collaboration, and communication, leading to a less cohesive work environment. Employees may withhold information or be less willing to cooperate, which can negatively impact productivity and innovation. • Employee Morale: Low trust can decrease employee morale and engagement. If employees feel they are constantly being scrutinized or doubted, it can lead to decreased job satisfaction and increased turnover. • Leadership Effectiveness: Leaders who are not trusting may struggle to delegate tasks effectively and may micromanage, which can stifle employees' initiative and creativity. • Organizational Culture: A culture of mistrust can become ingrained, leading to a toxic work environment that affects overall organizational performance and reputation. While being too trusting can also lead to issues, such as exploitation or neglect of necessary oversight, the negative effects of a mistrustful environment often outweigh those of excessive trust. 7.2 Consider the three dimensions of trustworthiness (ability, benevolence, and integrity). Which of those dimensions would be most important when deciding whether to trust your boss? What about when deciding whether to trust a friend? If your two answers differ, why do they? Answer: Benevolence may be most important when deciding to trust a friend, whereas ability and integrity may be most important when deciding whether or not to trust a boss. Friendships develop over time and are more emotion-based, whereas a professional relationship with a boss depends on respect for the boss’s skills, and the hope that the boss will keep his promises. 7.3 Putting yourself in the shoes of a manager, which of the four justice dimensions (distributive, procedural, interpersonal, informational) would you find it most difficult to maximize? Which would be the easiest to maximize? Answer: Distributive justice is often the most difficult to maximize, just because managers may not have the discretion to allocate rewards according to a strict equity principle. Procedural justice can also be difficult to maximize as making decisions in a consistent, accurate, and unbiased work requires conscientious effort on the part of managers. In contrast, interpersonal and informational justice only require a commitment to engage in respectful and candid communication. 7.4 Which component of ethical decision making do you believe best explains student cheating: moral awareness, moral judgment, or moral intent? Why do you feel that way? Answer: Reactions to this question could vary. Most will probably view it as an issue of moral intent, as students might understand that cheating is wrong but still do it due to GPA pressures or a pressure to keep up with one’s classmates. However, some practices, such as secretly collaborating on papers and sharing take-home assignments could be becoming murkier in a moral judgment sense (given the rise of collaborative, open-source resources such as Wikipedia). Moral judgment best explains student cheating. Here’s why: • Moral Judgment: This component involves evaluating whether a particular behavior is right or wrong based on ethical principles. Students who cheat might recognize that cheating is wrong but choose to ignore these ethical considerations due to pressure or perceived benefits. • Moral Awareness: This refers to recognizing that a situation has ethical implications. Many students are aware that cheating is unethical but might rationalize it due to perceived urgency or academic pressure. • Moral Intent: This component involves the commitment to act on one's moral judgment. While students may have the intention to avoid cheating, the lack of strong ethical commitment or fear of consequences can lead them to cheat despite knowing it's wrong. In summary, moral judgment is central because it directly relates to the decision-making process of whether or not to cheat, considering the perceived benefits and consequences against ethical standards. 7.5 Assume you were applying for a job at a company known for its corporate social responsibility. How important would that be to you when deciding whether to accept a job offer? Answer: Student answer to this question will vary depending on their moral attentiveness or their moral identity. If I were applying for a job at a company known for its corporate social responsibility (CSR), it would be quite important to me when deciding whether to accept a job offer. Here's why: 1. Alignment with Values: Working for a company with strong CSR practices aligns with my personal values and ethics, making the work environment more fulfilling and motivating. 2. Job Satisfaction: Knowing that the company is committed to social and environmental issues can enhance job satisfaction and provide a sense of pride in contributing to a positive impact. 3. Long-Term Commitment: CSR-focused companies often have a long-term vision for sustainability and ethical practices, which can translate to a more stable and forward-thinking work environment. 4. Professional Growth: Companies with strong CSR programs often invest in employee development and create a culture of integrity and responsibility, which can positively influence my professional growth. In summary, CSR would play a significant role in my decision-making process, as it reflects a company’s commitment to ethical practices and social impact, which are important factors for a fulfilling and meaningful career. CASE: APPLE Questions: 7.1 Should a company like Apple require suppliers to exceed—not just match—the prevailing standards for wages and working conditions in their home countries? Answer: Answers to this question may vary across students, but most students will expect a company like Apple—a company “at the top”—to be held to a higher standard that a company that is straining to keep its books in order. Holding Apple accountable for supplier actions would likely be part of that standard. Yes, Apple should require suppliers to exceed prevailing standards for wages and working conditions. By setting higher standards, Apple can promote better labor practices, improve worker welfare, and enhance its own reputation as a socially responsible company. This approach can lead to more ethical supply chains and foster positive long-term relationships with stakeholders. 7.2 Is Apple ethically obligated to more aggressively share its “lessons learned” with its competitors in the computer, tablet, and smartphone industries? Answer: This will likely be a bit more debatable. On the one hand, Apple shares many of its suppliers with its competitors, so it cannot really “move the needle” on supplier behaviors without addressing issues on a more systemic level. On the other hand, Apple could eventually gain customers by being “more responsible” than its competitors. In the end, it probably does have that ethical obligation. 7.3 When reflecting on Apple’s position atop Fortune’s “Most Admired Companies” list, how much of an impact does its corporate social responsibility have on that positioning? Do you think that impact will rise over time or stay stagnant? Answer: At this point, Apple’s position likely has little to do with its corporate social responsibility and more to do with the halo from “cool” products like the iPad Air, iPhone 5s/c, and Macbook Air. If those innovations give way to more incremental advancements, however, it may be that corporate social responsibility will take on a greater role in the overall perception of the company. BONUS CASE: NIKE (from 2nd ed) The columns of running shoes stretch 8 feet high and 20 feet wide. How do you decide which ones to try on? Price? Color? Nike hopes you narrow down your choices by focusing on brand. The shoe giant, headquartered in Beaverton, Oregon, has been a dominant force in the shoe and athletic apparel markets for decades. Scores of weekend warriors have looked to the Nike Air—that lightweight air pocket in the heels of many Nike shoes— to give them that extra step or that added bit of comfort. In the 1990s, however, many of those same weekend warriors were confronted with the reality of how those shoes were made. That’s when disclosures of sweatshop conditions and labor abuses sparked protests outside Nike stores and boycotts on many college campuses. In 1998, founder and then-CEO Phil Knight was forced to admit that the “Nike product has become synonymous with slave wages, forced overtime, and arbitrary abuse.”" Nike has worked hard to rebuild trust in its brand over the past decade. Nike became the first company in the industry to post the names and locations of its 700 factories—most located in China, Vietnam, Indonesia, and Thailand—on the Web (see www.nikeresponsibility.com). It created a code of conduct that sets standards for wages, the number of hours in a standard workweek, and the rules for overtime pay. It also paid a network of auditors to perform inspections of factories, giving each a grade between A and D. Unfortunately, it’s not clear that those efforts are paying off. A recent analysis of the inspection data by a professor at MIT noted that despite “significant efforts and investments by Nike … workplace conditions in almost 80% of its suppliers have either remained the same or worsened over time.” Almost one-third of the factories in one audit earned D grades because of multiple violations, including failing to pay the minimum wage and forcing employees to work more than 14 days in a row. Why has it been so difficult for Nike to improve the working conditions in its factories? One reason is that government regulations are weak in emerging economies, placing more pressure on companies to police their factories. And many of the facilities compete for Nike’s business, whereas higher employee salaries make their pricing less competitive. Those factories often find themselves working under tight deadlines, with power outages or design adjustments triggering work shift abuses. Other factories have learned to fool the audits by keeping fake records, distributing scripts for employees to read if they’re questioned, or shifting work to secret subcontractors that violate standards. And dropping a troubled facility can raise its own ethical issues, as it results in the loss of jobs that may be vital to that local economy. For its part, Nike has reacted to the limitations of its auditing strategy by helping convert factories to more modern manufacturing techniques and seeking to limit its own lastminute design adjustments. Those sorts of steps will reduce the pressures on the facilities, eliminating some of the need for overtime and excessively long work schedules. Nike’s current CEO, Mark Parker, summarizes this state of affairs by noting, “I’m proud of what we’ve accomplished, but we’re still not where we need to be. This is a never-ending challenge.” Hannah Jones serves as Nike’s vice president of corporate social responsibility, overseeing a 135-person team and reporting directly to CEO Mark Parker. Jones’s team is charged with weaving issues of corporate social responsibility throughout Nike’s operations. That mission includes auditing and managing Nike’s factories around the world. However, it also includes issues of environmental sustainability. In 1992, a German magazine pointed out that the signature Nike Air pocket included more than just air—it also contained sulfur hexafluoride, or SF6—a potent greenhouse gas more commonly linked to older refrigerators and air conditioners. SF6 breaks up slowly in the atmosphere, which means that even very small amounts have a significant environmental impact. Estimates suggest that at the peak of SF6 production in 1997, Nike Air footwear carried a greenhouse effect equivalent to the tailpipes of 1 million automobiles." It took Nike almost 14 years to devise a new air pocket that was as light, durable, and shock-absorbing as the SF6 version. The breakthrough wound up utilizing nitrogen, held in by a redesigned sole that includes 65 wafer-thin layers of plastic film. The new approach, which debuted with Nike’s Air Max 360, allows the air pocket to stretch throughout the sole, giving even more comfort at even less weight. The company has also devised a program that calculates an environmental impact rating for each shoe, based on use of toxic adhesives, curbing of waste, and use of recycled materials. Even the Air Jordan—arguably Nike’s flagship shoe— was designed with environmental impact in mind, such that the shoe’s sole consists of ground-up bits of old Nike sneakers. You won’t see these issues discussed in television or print ads for Nike shoes however. Unlike Wal-Mart or General Electric, which aggressively trumpet their “green” initiatives, Nike prefers to deemphasize sustainability in its marketing efforts. One independent branding consultant explains that strategy by noting, “Nike has always been about winning. How is sustainability relevant to its brand? Sources: Holmes, S. “Nike Goes for the Green.” BusinessWeek, September 25, 2006, pp. 106–-108.Levenson, E. “Citizen Nike.” Fortune, November 24, 2008, pp. 165–-170. Roberts, D.; and P. Engardio. “Secrets, Lies, and Sweatshops.” BusinessWeek, November 27, 2006, pp. 50–-58. Questions: 7.1 Do you agree with Nike’s decision to downplay “green” issues when marketing their shoes? Why or why not? Answer: On the one hand, it is difficult to argue with such decisions given Nike’s generally accepted marketing success. The brand is built on performance, and there is a risk that “recycled materials” convey some decrement in quality or performance. It is also possible that issues of sustainability are less politically favored for some of Nike’s core customers. On the other hand, one would think that Nike might have lost some customers due to its ethics controversies-customers that could potentially be won back if issues of ethics were emphasized in marketing. One compromise might be to use a small, targeted marketing campaign (perhaps print-based) on one exceptionally sustainable shoe, to see what comes of that sort of effort. 7.2 Assuming price and quality are both acceptable, to what degree do you consider the ethical reputation of a company when buying a product or service? Answer: Answers to this question will vary across students, and also according to the economy. It is easier to consider ethical reputation when price is constant, and more difficult when price is significantly (or even marginally) higher. The ethical reputation of a company plays a significant role in purchasing decisions for many consumers. If the price and quality are comparable, a company's ethical practices can be a decisive factor. Some consumers prioritize buying from companies with strong ethical standards, such as fair labor practices and environmental sustainability. However, the extent to which this influences decisions can vary among individuals. Ultimately, a positive ethical reputation can enhance customer loyalty and brand perception. 7.3 Does it seem like Nike is doing enough to build and maintain the trust in its brand? If not, what else would you like to see the company pursue? Answer: On the one hand, it certainly seems clear that they are doing more than they used to, and that they are doing as much (or more) than their peers. On the other hand, the MIT report is sobering. The company should likely continue its more proactive approach that goes beyond mere monitoring and sanctioning. Better equipment and more reliable work flows are the kinds of strategies that, if continued, could effect for significant change. Beyond that, it seems like Nike could do more marketing of the steps it’s doing to be more ethical. Currently, a number of people may just assume that the problems that occurred before are just as bad now. INTERNET CASE: CORPORATE SOCIAL RESPONSIBILITY: DISTINCTION OR DISTRACTION " by Steve McKee http://www.businessweek.com/articles/2012-08-09/corporate-social-responsibility-distinction-or-distraction" Questions: 7.1 Do students agree with the notion that corporate social responsibility can sometimes be a distraction? Answer: Most students will agree with the author’s four keys to healthy growth (internal alignment, clear focus, aggressive marketing, and undistracted consistency). And it does seem plausible that corporate social responsibility activities can go against the undistracted consistency aspect of that equation. The operative question becomes whether responsibility efforts facilitate those efforts or whether they bring gains that “make up for” their distractions. Yes, some students might agree that corporate social responsibility (CSR) can be a distraction if it diverts focus from core business operations or if it is used as a superficial strategy rather than a genuine commitment. They might argue that CSR efforts should align closely with a company’s core values and business strategy to avoid being seen as mere window dressing. 7.2 In the context of the previous question, what makes TOMS Shoes and Newman’s Own different than a company like Pepsi? Answer: It seems that the corporate social responsibility efforts by those companies are components of their focus and their marketing, creating an alignment that is not present to the same degree as Pepsi. Of course, the question then becomes whether company ethics can be ends in themselves or whether they must have a profit creating effect. TOMS Shoes and Newman’s Own stand out from companies like Pepsi because their core business models are deeply integrated with their social missions. TOMS incorporates its "one for one" giving model directly into its product sales, while Newman’s Own donates 100% of its profits to charitable causes. In contrast, companies like Pepsi may engage in CSR activities but often focus primarily on their core business objectives, making CSR efforts appear more as supplementary rather than central to their operations. EXERCISE: UNETHICAL BEHAVIOR Instructions: Have students read the scenario in step 7.1. It’s important that they not skip ahead and read 7.3, so impress upon them to just do step 7.1. Once they’ve read the scenario, put the students in groups and have them come to consensus on three ideas for reducing employee theft at The Grocery Cart. Have them write the behaviors on the board, making sure to leave a bit of space for additional writing later. Sample Ideas: Here’s an example of the kinds of ideas students might come up with for reducing employee theft. • Install cameras in stockroom • Post warnings about the consequences of being caught stealing • Offer store-level incentives for theft reduction Next Steps: Now have students read the continuation of the scenario in 7.3. In the context of Figure 7-6, this added information paints the situation at The Grocery Cart as a case of a “bad barrel”, not just some “bad apples.” Theft seems to be a reaction to distributive and interpersonal injustices, much like the study described in Figure 7-5. It also seems to be fostered by a culture of poor ethics, with managers themselves committing or sanctioning unethical actions. Some groups will have focused on Drew in their original ideas. Those groups may or may not add any additional ideas to what they’ve written on the board. Other groups won’t have focused on Drew, however, so they’ll add some ideas to their original three. Those ideas could include: • Fire Drew • Ensure that the pay levels for Grocery Cart employees are competitive Questions: If you examine the ideas that the groups wrote on the board, you’ll typically see that the ideas are geared toward moral intent. The employees at the grocery cart are not sufficiently motivated to do the right thing. It’s not clear that theft will be punished, and there’s no clear incentive to help keep other employees in line. In fact, the employees actually seem to be incented to do the wrong thing, as they may be underpaid, they are the victim of disrespectful communication, and they are able to model their boss doing it. Given that, ideas that focus on increasing moral intent (cameras, warnings, incentives, better treatment of employees) will be quite common. One way to structure class discussion is to challenge students to come up with ideas that address the moral awareness or moral judgment portions of Figure 7-6. For moral awareness, The Grocery Cart could hold a training session on the bottom-line costs of employee theft, to make the issue have more moral intensity. They could also prioritize moral attentiveness in their hiring process, either through interviews or personality testing (see the discussion of integrity testing in Chapter 9). For moral judgment, The Grocery Cart could gear a training session toward moral development, getting the employees to view theft from a more sophisticated set of moral principles (e.g., ethics of duties, ethics of rights, virtue ethics). OMITTED TOPICS The field of organizational behavior is extremely broad and different textbooks focus on different aspects of the field. A brief outline of topics that are not covered in this text, but which the professor might want to include in his or her lecture, is included below. In cases where these topics are covered in other chapters in the book, we note those chapters. In cases where they are omitted entirely, we provide some references for further reading. • Equity Theory – The dominant theory for explaining how individuals form perceptions of distributive justice. The theory argues that individuals compare their ratios of outcomes to inputs to those of a comparison other, feeling “equity distress” whenever those ratios are imbalanced. This theory is covered in our discussion of motivation in Chapter 6. ! • Psychological Contract – An employee’s belief about what he/she owes the company and what the company owes him/her. Differences in psychological contracts are very similar to differences in exchange relationships (as in the discussion of social vs. economic exchanges). Psychological contracts are covered in our discussion of commitment trends in Chapter 3. • Instructor’s Manual: Ch. 8: Learning & Decision Making CHAPTER OVERVIEW This chapter identifies the importance of both tacit and explicit knowledge, and how they are acquired in an organization and used to make various types of organizational decisions. Programmed and non-programmed decision making is discussed, along with the factors that inhibit effective decision making, such as limited information, faulty perceptions, faulty attributions, and escalation of commitment. LEARNING GOALS After reading this chapter, you should be able to answer the following questions: 8.1 What is learning, and how does it affect decision making? 8.2 What types of knowledge can employees gain as they learn and build expertise? 8.3 What are the methods by which employees learn in organizations? 8.4 What two methods can employees use to make decisions? 8.5 What decision-making problems can prevent employees from translating their learning into accurate decisions? 8.6 How does learning affect job performance and organizational commitment? 8.7 What steps can organizations take to foster learning? CHAPTER OUTLINE I. Learning and Decision Making A. Learning reflects relatively permanent changes in an employee’s knowledge or skill that result from experience B. Decision making is the process of generating and choosing from a set of alternatives to solve a problem II. Why Do Some Employees Learn to Make Decisions Better Than Others? A. Expertise refers to the knowledge an skills that distinguish experts from novices and less experienced people – these differences are almost always a function of learning B. Types of Knowledge 1. Explicit Knowledge – information that can be communicated verbally or in writing 2. Tacit Knowledge – information that is gained from experience Try This! Ask students to raise their hand if they consider themselves to be experts at something. Maybe you have expert musicians or athletes in the class, or maybe students are experts at certain hobby or task-related activities. Then ask some of the experts to explain how to do their skill to students who are novices at that activity. Are they able to articulate the tacit knowledge that they may have taken for granted? C. Methods of Learning 1. Reinforcement – people learn by observing the link between voluntary behavior and the consequences that follow it a. Operant Conditioning Components i. Antecedent – condition that precedes behavior ii. Behavior – action performed by employee iii. Consequence – result that occurs after behavior b. Contingencies of Reinforcement i. Positive Reinforcement – positive outcome follows a desired behavior, increasing the likelihood that the behavior will appear again a. To be successful, employee must see direct link between behavior and reward ii. Negative Reinforcement – unwanted outcome is removed following a desired behavior, increasing the likelihood that the behavior will appear again iii. Punishment – unwanted outcome follows an unwanted behavior, decreasing the likelihood that the behavior will appear again iv. Extinction – no consequence (either positive or negative) to a behavior, which decreases the likelihood that the behavior will appear again c. Schedules of Reinforcement i. Continuous reinforcement – specific consequence follows each and every occurrence of a desired behavior ii. Fixed interval schedule – workers rewarded after a certain amount of time, and time between reinforcement stays the same iii. Variable interval schedule – workers rewarded after a certain amount of time, and time between reinforcement varies iv. Fixed ratio schedule – behaviors reinforced after a certain number of them have been exhibited v. Variable ratio schedule – people are rewarded after a varying number of exhibited behaviors vi. Variable schedules lead to higher performance than fixed schedules, but variable schedules are not always appropriate for work rewards (e.g. paychecks) 2. Observation a. Social learning theory says that people in organizations learn by watching others b. Behavioral modeling involves observing the actions of others, learning from what is observed, and then repeating the observed behavior (Figure 8-3) c. Four steps are involved in behavioral modeling: i. Attentional processes – learner must notice critical behaviors ii. Retention processes – learner must remember critical behaviors iii. Production processes – learner must reproduce critical behaviors iv. Reinforcement processes – learner must be rewarded for exhibiting critical behaviors 3. Goal Orientations – affect learning behaviors and outcomes a. Learning orientation – building competence is seen as more important than demonstrating competence i. Improves self-confidence, feedback-seeking behavior, learning strategy development, and learning performance b. Performance-prove orientation – focus is on demonstrating competence so others will think favorably of the performer c. Performance-avoid orientation – focus is on demonstrating competence so other will not think unfavorably of the performer OB Assessments: Goal Orientation. This brief assessment will allow your students to determine their own goal orientation. Use a show of hands to see how many students fell above and below the average level, and see if students will volunteer any extremely high or low scores. Ask students how especially high and low levels of learning orientation impact the kinds of classes students sign up for, and the way they approach those classes. Then ask the same kinds of questions about performance-prove and performance-avoid orientations. Please see the Instructor PowerPoints for Bonus Assessments on Workplace Learning Potential and Rational Decision Making. Please see the Connect assignments for this chapter for assessments on Intuition and Social Identity. Please email me at [email protected] if you have any questions about using these assessments in your teaching. D. Methods of Decision Making 1. Programmed Decisions a. Decisions that become somewhat automatic because a person’s knowledge allows him or her to recognize and identify a situation and the course of action that needs to be taken i. Often made using intuition – an emotionally charged judgment that arises through quick, unconscious, and holistic associations 2. Non-Programmed Decisions b. Decisions made in situations that are new, complex, and not recognized c. Non-programmed decisions are best made using the rational decision-making model i. Determine the appropriate criteria for making a decision ii. Generate a list of available alternatives iii. Evaluate the alternatives against criteria iv. Choose the solution that maximizes value v. Implement appropriate solution vi. Determine whether or not the solution delivers the expected outcome d. Rational decision-making model does not take into account that people are not always rational Asset Gallery (Decision Making/Hot Seat): Office Romance: Groping for Answers. This Hot Seat feature provides insights into the decision-making process as a manager is confronted with a failed office romance between two of his employees. The manager clearly treats the decision as a nonprogrammed one, stressing the need to gain information and generate a list of alternative actions. The feature also illustrates the difficulties involved in rational decision making when situations (and parties to the decision) do not encourage rationality. OB on Screen: Star Trek Into Darkness. The clip referenced in the book begins around the 1:19:56 mark of the film, continuing until about the 1:22:45 mark. The clip depicts the crew of the U.S.S. Enterprise being threatened by a much larger and more powerful Starship. Faced with few options, Captain Kirk (Chris Pine) appears to make the decision to attempt a solution that a) involves befriending a known enemy (Khan) and b) seems to have a very low probability of working. Kirk’s first officer - Spock (Zachary Quinto), the ultimate rational thinker - is quick to remind him of this and the fact that as a Captain, he has other responsibilities he needs to keep in mind. Kirk opens up to Spock about the fact that he is making a decision based on a “gut feeling” because this option is all he can think of and he needs to do something (anything). The clip is an excellent opportunity to discuss rational vs. non-rational decision making. The two characters will likely be well known to most of the students in the class and both represent opposite ends of the continuum. A discussion of when to use both types of decision-making would be a fruitful discussion. It is worth pointing out the advantages of having people with different mindsets (diversity) when an important decision needs to be made. Kirk and Spock are effective together for this reason. Would there be an advantage to having people in a group play a role such as devil’s advocate when members of a group are similar in the way they think? Why? A time of crisis like the one in this case is obviously one of those times where intuition can play an important role in effective decision making. Encourage your students to think of time where they have used their intuition in making a decision – have they ever followed the leadership of someone who was using their intuition but couldn’t explain why they were making a certain decision? What made them trust their leader under that circumstance? Try This! Use the Star Trek clip for a different chapter. The clip would make for a helpful discussion of trust issues in Chapter 7 on Trust, Justice, and Ethics. Does Spock seem to trust Kirk’s judgment? Why or why not? The clip is also relevant to the time-sensitive model in Chapter 14 on Leadership: Styles and Behaviors. What decision making style does Kirk seem to be using? What should he be using? Bonus OB on Screen (from 3rd ed): The Karate Kid. The clip referenced in the book begins around the 1:09:43 mark of the film, continuing until about the 1:14:25 mark. The clip depicts Dre Parker (The Karate Kid) putting on and taking off the jacket, getting frustrated with the seemingly pointless process, and then Mr. Han (Jackie Chan) bringing through the lessons. The scene provides a chance to watch learning in action, including the passing on of somewhat tacit knowledge from a mentor to an apprentice. An interesting discussion in class could revolve around asking students to talk about times they did things for a job that were assigned to them by a mentor, thinking they were extremely boring at the time – even being angry about having to do them, but then coming to realize how valuable having done those tasks were later on when the job became more complicated or they were forced to make their own decisions. Students generally can come up with multiple examples which leads to a fruitful discussion of the passing along of tacit knowledge. It is also worth pointing out that sometimes we are learning even when we don’t realize it. Doing the same things over and over again helps us later on to process decisions more quickly. Ask the students for examples of these types of tasks that they learned to do quickly simply through repetition. Another topic for class discussion is where in a business environment can they watch an expert in order to learn from them. You can point out that every time they watch an executive make a speech or a manager deal with employees, they can take mental notes of what seems to work well and what doesn’t. They can also note how outstanding performers at work differentiate themselves from average or poor workers – what habits do they have, what do they do on a daily basis that sets them apart? This type of behavioral observation is extremely important to learning in a company as we aren’t always in a position to actually do the things we will have to perform at some point in the future. Please email Jason Colquitt ([email protected]) if you have any questions about using OB on Screen in your teaching. Bonus OB on Screen (from 2nd ed): Harry Potter and the Order of the Phoenix. The clip begins around the 53:10 mark of the film, continuing until about the 1:00:00 mark. The clip depicts Harry Potter, Hermoine Granger, and Ron Weasley gathering together for a meeting with a group that becomes known as “Dumbledore’s Army”. This group decides (against the formal wishes of the School) to let Harry teach them how to use spells. The clip shows the group come to a consensus, find a place to practice, and begin. It also includes a cutaway scene in Professor Umbridge’s class where she tries to make them learn solely out of a book (no wands). The scenes provide a case study about how individuals learn using different methods. One topic for class discussion is how different forms of information can be transferred. How does Harry use reinforcement and observation to teach his fellow students? What aspects of OB can really be taught through a book and which need to be learned through working? Are there aspects of the student’s major that will never be learned in school? If one really wanted to take a risk, you might ask them why they get so much out of movie clips instead of simply reading about a topic in a book. Bonus OB on Screen (from 1st ed): Star Trek: First Contact. The clip begins around the 31:11 mark of the film, continuing until about the 32:47 mark. The clip depicts Data, an android (robot) with an “emotion chip” that can be turned on and off depending on the needs of the situation. In this scene, Captain Picard asks Data to turn off his emotion chip because the situation is dangerous and completely rational decision making is needed. One topic for class discussion is whether all decisions should be made rationally, even if it were possible to do so. Does emotion add something beneficial to decision making? Under what circumstances is emotional decision making desirable and under what circumstances is purely rational decision making desirable? E. Decision-Making Problems 1. Limited Information a. Bounded rationality – decision makers do not have the ability or resources to process all available information and alternatives to make an optimal decision Asset Gallery (Human Resource Management/HR Video DVD): Working Smart. This BusinessWeek Weekend clip illustrates how much information overworked employees are inundated with each week. The long hours, constant connection, and unimportant tasks make it harder to concentrate and harder to devote the time needed to make a truly rational decision. b. Satisficing – decision makers often use the first acceptable alternative they encounter, rather than evaluating all alternatives to see which one is best 2. Faulty Perceptions a. Selective perception – people see only those things in the environment which affect them and are consistent with their expectations b. Projection bias – people project their own thoughts, attitudes, and motives onto other people c. Social identity theory – people identify themselves by the groups to which they belong and perceive and judge others by their group memberships d. Stereotypes – occur when people make assumptions about others on the basis of their membership in a social group e. Heuristics – simple, efficient, rules of thumb that allow people to make decisions more easily i. availability bias – the tendency for people to base their judgments on information that is easier to recall 3. Faulty Attributions a. Fundamental Attribution Error – people have a tendency to judge others’ behaviors as due to internal factors i. self-serving bias suggests that people attribute their own failures to external factors, and their own successes to internal factors OB Internationally. This box examines the role biases play in assigning blame for major corporate accidents or breaches of ethics. Note especially the role culture plays in determining who will be blamed for the problem – for example, in an individualistic culture, a single person will get the blame, while in a collectivistic culture, the entire organization accepts the blame. ii. Decisions about the causes of behavior are linked to three judgments: a. Consensus – Did others act the same way under similar situations? b. Distinctiveness – Does this person tend to act differently in other circumstances? c. Consistency – Does this person always do this when performing the task? 4. Escalation of Commitment a. Refers to the decision to continue to follow a failing course of action OB at the Bookstore: Thinking, Fast and Slow. Kahneman’s book is a superlative book on how we make decisions. System 1 thinking (effort-free, unconscious thinking) and System 2 thinking (rational, conscious, effort-laden) are both methods of decision making that we use every day. Encourage students to think about the decisions they have made that day that involved System 1 thinking. Driving a car, making coffee, and how to use their phone might be some good examples. Stress to the students how MUCH of what we do is actually System 1 thinking. Next, have students think about a decision they made that day using System 2 thinking. It’s likely to be harder for them to come up with things! How often are we faced with a decision that requires us to put substantial thought and resources behind the decision? What kinds of decisions are those likely to be? What kinds of decisions are they involved with right now that are requiring those kinds of resources? Perhaps it involves searching for a job or what kind of job to accept? Which classes to take next semester? The point to stress to students is that although many of the decision errors we make (and there are plenty to talk about using Table 8-4 and others mentioned in the chapter) are based on System 1 errors – far and away the majority of decisions we make every day are correct and these also involve System 1 thinking. The key is to know when System 2 thinking is necessary and how to avoid some of the errors we make under those circumstances. F. Summary: Why Do Some Employees Learn to Make Decisions Better Than Others? (Figure 8-6) III. How Important Is Learning? A. Learning has a moderate positive effect on job performance B. Learning has a weak positive effect on commitment IV. Application: Training A. Organizations can improve learning by training, a systematic effort to facilitate the learning of job-related knowledge and behavior Try This! Ask students to share training experiences they’ve had in jobs that they’ve held. What method of instruction was used to impart explicit knowledge and tacit knowledge? What did the organizations do that was effective and what did they do that was ineffective? B. Companies are heavily focused on knowledge transfer from older, experienced workers to younger, inexperienced workers 1. Behavioral modeling training, pairs experienced workers with inexperienced workers so the inexperienced workers can observe and learn from the more skilled employees 2. Communities of practice are groups of employees that work together and learn from one another by collaborating over an extended period of time C. The success of organizational training depends on transfer of training – when the knowledge, skills, and abilities gained in a class are actually used by the employee back on the job 1. Transfer of training is fostered when organizations create a climate for transfer – an environment that can support the use of new skills DISCUSSION QUESTIONS 8.1 In your current or past workplaces, what types of tacit knowledge did experienced workers possess? What did this knowledge allow them to do? Answer: Answers will vary from student to student, but for example, an experienced marketing professional might know whether or not an ad campaign would work just by glancing at it. This would enable him or her to tell whether or not the company should pitch a particular campaign to a client. In past workplaces, experienced workers often possessed tacit knowledge such as intuitive problem-solving skills, understanding of unwritten organizational norms, and interpersonal strategies. This knowledge allowed them to navigate complex situations, mentor new employees, and effectively manage day-to-day tasks with efficiency and insight that wasn't explicitly documented. 8.2 Companies rely on employees with substantial amounts of tacit knowledge. Why do companies struggle when these employees leave the organization unexpectedly? What can companies do to help ensure that they retain tacit knowledge? Answer: Companies struggle when employees with tacit knowledge leave because tacit knowledge isn’t typically written down, and it is something that is difficult to transfer from one person to another without extensive interaction and observation. Companies can implement mentoring programs and techniques such as behavior modeling training and communities of practice to transfer tacit knowledge before it is lost. 8.3 What does the term “expert” mean to you? What exactly do experts do that novices don’t? Answer: An expert is someone with exceptional knowledge or skills. Experts see problems differently and offer different solutions than novices do. Experts are often able to see how many things fit together, and they can see the “big picture” more clearly than those with less experience do. Experts are able to deal with harder, more complex problems than novices can handle, and they typically solve problems more quickly than someone with less skill. 8.4 Given your occupational choice, how do you expect to learn what you need to know when you start working? Do you expect the company to provide you with these opportunities, or will you have to seek them out on your own? Answer: Again, student answers will differ, but students should expect to keep learning for the duration of their careers, using both company- and individually-provided resources. Most companies expect students to have basic skills when they arrive – then the company will train the new employee on proprietary tools and techniques. In addition, continuous improvement and learning is key for a successful career. As part of the discussion for this question, you may want to find out how many students are taking your class now as part of a company-sponsored initiative. It can also be interesting to discuss the company regulations associated with paying for college courses – do students have to get a certain grade, are they only allowed to take certain courses, etc.? In my occupational choice, I expect to learn essential knowledge through a combination of company-provided training and self-directed efforts. While I anticipate that the company will offer foundational training and resources, I plan to actively seek out additional learning opportunities and engage in continuous self-improvement to stay updated and advance in my role. 8.5 Do you consider yourself a “rational” decision maker? For what types of decisions are you determined to be the most rational? What types of decisions are likely to cause you to behave irrationally? Answer: Most people do consider themselves to be rational decision makers – very few of us actually believe that we make the kinds of decision errors suggested in this chapter of the text. The exercise at the end of this chapter can be an eye-opening experience for students who believe that they make all of their decisions rationally. I consider myself a rational decision maker for structured, data-driven decisions where clear criteria are available. I tend to be most rational when making financial or strategic choices that involve measurable outcomes. However, I may behave irrationally in decisions influenced by strong emotions, such as interpersonal conflicts or high-stakes personal decisions where immediate emotional responses can override logical analysis. 8.6 Given your background, which of the decision-making biases listed in the chapter did you most struggle with? What could you do to overcome those biases to make more accurate decisions? Answer: Again, this answer will vary from student to student, but most people will benefit from taking more time to determine what the problem is before solving it, and to identify additional solutions prior to picking the one that they want to use. If students are managers, they should be well aware of the impact the fundamental attribution error has on performance reviews, but they should also know that simply being aware of the problem can go a long way towards solving it. Given my background, I most struggled with confirmation bias, where I tend to seek out information that supports my pre-existing beliefs and overlook contradictory evidence. To overcome this bias and make more accurate decisions, I could: 1. Actively seek out diverse perspectives and conflicting viewpoints to challenge my assumptions. 2. Use decision-making frameworks that require evaluating evidence systematically. 3. Engage in critical thinking and reflection to recognize and question my biases. 4. Solicit feedback from others to get a more balanced view and counteract personal biases. CASE: VERIZON Questions: 8.1 How exactly do Verizon’s training practices help employees react during times of crisis? Does this affect only those who have been formally trained? Why or why not? Answer: Allowing employees to train for a crisis ahead of time allows them to not focus on what they are “supposed” to do from a policy/action standpoint, but rather to pay more attention to their environment and whether different decisions need to be made. Since intuition is a pattern-recognition process, any type of realistic training exercise should allow employees to build up experiences of how things are likely to look during a crisis. Although formal training for everyone might help, having key employees participate in the training allows everyone to benefit from their decision making skills during a time of crisis. In addition, they can learn from employees who have had formal training by the passing along of information or simply by watching their actions during a time of crisis. 8.2 How does a crisis differ from other situations in which employees are called on to make decisions? Answer: Formal apprenticeship and mentoring programs have been proven The hallmark of a crisis is that lots of ambiguous information is present, but yet an extremely important decision needs to be made quickly. There simply isn’t as much time to be able to sit down and make a rational decision. It’s why managers with lots of experience are generally in the best position to make split decisions based on their tacit knowledge. 8.3 How can a company ensure that lessons or knowledge learned in one section or area of the organization are transferred to other areas that might benefit from that knowledge? How important are experts in this regard? Answer: Many companies have systems in place to debrief lessons learned after a crisis occurs. Verizon clearly did that following their experiences with earlier hurricanes. One option for companies is to provide the means for employees to share their experiences in a training-like format without being formal about it. Social networks are becoming very powerful in this regard. Experts are the ones most likely to be sharing this information and they are the ones who are likely to have the best grasp of exactly what occurred and why a response either did or didn’t work. Verizon not only had systems in place to disseminate the information following earlier crises, but they also transferred employees with that experience to different locations around the country. BONUS CASE (from 3rd ed): IBM For many people over 50 years old, the three letters together—IBM—still signify a company whose employees all wear dark suits, white shirts, and similar ties. IBM is also remembered as the first major technology company and for getting left in the dust as it failed to adjust to the personal computer revolution in the 1980s. Now? One thing’s for certain—this isn’t your father’s IBM. Number 12 on Fortune’s most admired companies list, IBM has 420,000 employees and earns $100 billion in annual revenue by providing systems integration services to clients around the world. IBM’s employees have to deal with massive amounts of information and its success lies in the ability of its employees to learn how to be more efficient and innovate on a daily basis. To accomplish this feat, IBM relies largely on various forms of social networking and other Web 2.0 applications. In fact, there is perhaps no other company that has adopted social networking as a learning tool as wholeheartedly as IBM (over 350,000 of its employees are involved in one form or another). If you were a manager or a salesperson at IBM with a question about how to best get something done, wouldn’t it be nice to tap into the knowledge of many people at once who have an expertise in the area of your question? Luckily, many IBM employees have access to online learning communities that allow them to do just that. IBM, like many other organizations including Caterpillar, Raytheon, World Bank, and hundreds more, have developed online “communities of practice” that are designed as workplace learning tools.5 These tools, whether they be wikis, blogs, IBM’s internal directory “Blue Pages,” or social tagging and bookmarking, attempt to put employees with similar jobs, interests, or problems together, allowing them to take advantage of the collective wisdom of the group or the tacit knowledge of a highly experienced member.6 In fact, social tagging and expertise ratings allow IBM employees to identify where the “true” experts lie within the company. These Web 2.0 applications give IBM employees a means to share the types of information that used to take years of experience on the job to learn. In essence, they take the unwritten knowledge that IBM employees possess and provide a conduit to other employees who need that information to perform their jobs effectively. These types of online social networking tools are highly useful in passing information between employees who might be geographically dispersed. To aid in that endeavor, IBM is also utilizing virtual worlds in which coworkers can do everything from holding brainstorming sessions to practicing presentations online. These virtual worlds allow employees to create personal avatars and interact with one another remotely with the goal of training or sharing knowledge. One of the major factors behind the push for knowledge sharing in companies is the large group of older workers in the Baby Boom generation who will soon be retiring and taking their tacit knowledge with them. Companies want these older workers to mentor and interact with younger workers so they don’t lose that knowledge. However, numerous sources reveal that the four generations that currently appear in the U.S. workforce actually interact much less than we might hope. Much of the reason has to do with faulty perceptions. Eric Buntin, managing director of marketing and operations for Atlanta–based Randstad USA, finds that “Stereotyping is real. If Gen X’ers think their baby boomer colleagues are less flexible—even if they’re not—they believe it.” IBM and other companies are banking on knowledge-sharing practices such as social networking and Web 2.0 technologies, to help bridge this gap between generations and create learning that is necessary for future success. This reliance introduces certain dilemmas though. One such dilemma is that social networking is much more natural for the newest generation in the workforce than it is for the older ones. For most Millennials (born between 1978 and 1996), social networking is simply part of life. From a learning perspective, one key difference between the older generations and the Millennials is that the younger group is the first generation that has had immediate access to many types of information that other generations had to develop relationships with their authority figures in order to acquire. Baby Boomers, and to a certain extent those in Generation X, are used to going to their superiors to ask questions on how to do things. Millennials have been found to either not recognize the need to do that or to not know how. This gap implies that passing along tacit knowledge from one generation to the next is going to need to occur in various forms. From a technology perspective, IBM’s experience is that the social behavior involved with various forms of technology is very different and each serves its own purpose. For instance, blogs are written by fewer people (although at IBM “few” is 26,000 employees with registered blogs) and are generally seen as a “push” technology—they’re sent out to a large set of passive readers. Corporate wikis on the other hand are a “pull” technology, which involves gathering information from and the collaboration of a large number of employees over time. IBM’s corporate wiki program has been highly successful (over 150,000 employees in daily volume visited IBM’s WikiCentral within the first year of the program). If done well, wikis have a much higher potential to pass along and make explicit “tacit knowledge” that has built up within a company due to the collaboration and problem solving involved. From a nontechnology perspective, many if not most organizations have used mentoring as a primary way in which more experienced workers pass along both explicit and tacit knowledge. However, many companies including IBM and others are recognizing that mentoring can’t hold the same forms it has taken in the past. Today’s more project-based environments and geographical dispersion makes natural mentoring relationships between employees extremely difficult, and it doesn’t help with traditional forms of knowledge sharing. So how are many companies attempting to overcome this issue? Through technology and social networking! Sources: Agnvall, E. “Hitchhiker’s Guide to Developing Leaders.” HR Magazine, September 2008, pp. 121–24; Anonymous. “How Social Networking Increases Collaboration at IBM.” Strategic Communication Management, January 2010, pp. 32–35; Azua, M. The Social Factor: Innovate, Ignite, and Win through Mass Collaboration and Socia Networking. New York: IBM Press, 2009; Bulkeley, W. M. “Business Solutions; Playing Well with Others: How IBM’s Employees Have Taken Social Networking to an Unusual Level.” The Wall Street Journal, June 18, 2007, p. R10; Collins, J. “It’s All In Here!: How Do We Get It Out?” T + D, January 2011, pp. 58–61; Emelo, R. “Creating a New Mindset: Guidelines for Mentorship in Today’s Workplace.” T + D, January 2011, pp. 44–49; Espinosa, C.; M. Ukleja; and C. Rusch. Managing the Millennials: Discover the Core Competencies for Managing Today’s Workforce. New York: John Wiley & Sons, 2010; and Randstad USA. “2008 World at Work,” (n.d.), http://www.us.randstad.com/2008WorldofWork.pdf ; Hempel, J. “IBM’s Super Second Act.” Fortune, March 21, 2011, pp. 114–24; Ladika, S. “Socially Evolved.” Workforce Management, September 2010, pp. 18–22; Lawson, M. “Survey Reveals Alarming Lack of Generational Workplace Interaction.” Workforce Management, July, 2008. http:// www.workforce.com/archive/feature/25/68/23/index.php?html ; Morrison, S. “A Second Chance for Second Life.” The Wall Street Journal, August 19, 2009, p. B5; Pontefract, D. “Learning with and from Others: Restructuring Budgets for Social Learning.” T + D, January 2011, pp. 54– 57; Salopek, J.J. “Knowledge in Numbers.” T + D, July 2008, pp. 24–26. Questions: 8.1 Which types of social networking are more likely to bridge the generation gap and allow knowledge sharing between the generations of employees at IBM? Explain. Answer: Communities of practices, as a heavily technology based method of passing along information, might be problematic for passing along information from an older workforce. However, IBM has always been a highly technological oriented company so its chances might be substantially better than the average company. 8.2 Given these generational issues and the type of work life that IBM employees tend to have, can you think of another possible way to encourage knowledge sharing within the organization? Answer: Formal apprenticeship and mentoring programs have been proven to be highly effective under these types of situations, but as mentioned in the case they are harder to set up given the changing nature of work. Forcing employees from different generations to sit on the same project teams and interact with one another is another way to begin to break down the fact that the two groups don’t typically interact with one another. 8.3 How might IBM attempt to break down the perceptions and stereotypes that exist between generations in order to help the knowledge-sharing process? Answer: Training programs on understanding diversity as well as finding ways to show each group that the other is really not as different as they think they are would be useful. For the most part though, forcing some type of interaction between the groups is really the most useful method of breaking down such stereotypes. INTERNET CASE: THE SECOND COMING OF FACEBOOK by Jessi Hempel http://money.cnn.com/2013/04/11/technology/facebook-zuckerberg-home.pr.fortune/index.html" Questions: 8.1 How has learning played a role at the changes that are now occurring at Facebook? Answer: Learning seems to be happening at many levels. Upper management appears to have learned both from successes and failures how to revamp many of their systems. Their CEO (Zuckerberg) has learned through experience that he can’t always trust his instinct. Facebook employees are learning through observation of their leadership that the way things are being done around the company are changing. 8.2 How has decision-making changed at Facebook? Answer: The company appears to be growing into a more rational decisionmaking mindset. CEO Zuckerberg is learning to be more methodical with his decision making as opposed to jumping into quick decisions. Employees are realizing that the speed they used to be successful on the internet is causing problems when applied to a mobile-based format where mistakes can’t be fixed as quickly. Facebook is also much more active in bringing in a diverse set of individuals to help with team decision-making at the front end of projects rather than simply at the end. EXERCISE: DECISION-MAKING BIAS Answers to Questions in Text: A. b Because probabilities are not linked, you have to consider each hospital as a separate entity, and each day as a separate occasion. Sampling theory entails that the expected number of days on which more than 60 percent of the babies are boys is much greater in the small hospital than in the large one, because a large sample is less likely to stray from 50 percent.! B. b In prior studies 85% of respondents choose option b. The “more likely” answer though mathematically is clearly option a. The probability of two events occurring together is always less than or equal to the probability of either occurring alone. (If b is true, a must be true by definition. However, if a is true, b does not have to be true.) People who answer b fall prey to the representativeness heuristic because b seems more representative of Linda based on the description of her. C. 41% This question requires that you think about underlying probabilities, and is a good example of the impact of representativeness bias on decision making, since most students answers will range from 50% to 80% probability that the cab was correctly identified as Blue. The correct answer, found using Bayes’ theorem, is lower than these estimates: • There is a 12% chance (15% times 80%) of the witness correctly identifying a blue cab. • There is a 17% chance (85% times 20%) of the witness incorrectly identifying a green cab as blue. • There is therefore a 29% chance (12% plus 17%) the witness will identify the cab as blue. • This results in a 41% chance (12% divided by 29%) that the cab identified as blue is actually blue. D. Most students will pick “a” in Decision I and “b” in Decisions II and III, not realizing that statistically, all of these choices are equal. This is an excellent example of framing, where the way in which a question is asked influences the decision a person makes. Kahneman and Tversky found that when questions were framed positively (a sure win), people were less likely to take risks, but when questions were framed negatively (a sure loss), people were more likely to take risks, even if the risk in both cases was the same. E and F. Most students will answer “no” to E, but “yes” to F, again, not realizing that the two choices are exactly equal from a rational point of view. In both cases, the person who chooses to buy a new ticket will be down $80 by the end of the evening. The difference is the perception that one has spent $80 on buying the same ticket twice, versus spending $40 on a ticket and simply losing the other $40. This is a good place to discuss escalation of commitment, as well as sunk costs. G. Surgery. The trick here is looking at the probability of survival at the end of the treatment, not just looking at initial survival probabilities. Show students that this same question can also be asked in the following way: Would you choose surgery, which has a 44% probability of survival at the end of five years, or radiation, which has a 22% probability of survival at the end of five years? OMITTED TOPICS The field of organizational behavior is extremely broad and different textbooks focus on different aspects of the field. A brief outline of topics that are not covered in this text, but which the professor might want to include in his or her lecture, is included below. In cases where these topics are covered in other chapters in the book, we note those chapters. In cases where they are omitted entirely, we provide some references for further reading. • Team Decision Making – Many of the most important decisions made in organizations are entrusted to teams. Team decision making is affected by a unique set of issues, including the distribution of information within the team and the degree to which the team censors or pressures its members. The factors that affect team decision making accuracy are covered in our discussion of team processes in Chapter 12. • Self-Efficacy – One byproduct of the modeling process described by social learning theory is an increase in self-efficacy, a sort of task-specific self-confidence. Self-efficacy is covered in our discussion of motivation in Chapter 6. • Ethics in Decision Making – Aside from making accurate decisions, managers must also attempt to make ethical decisions. A model of ethical decision making (including issues such as moral awareness, moral judgment, and moral intent) is included in our discussion of ethics in Chapter 7. • Weiner’s Model of Attribution – This model describes how individuals’ attributions for their own success or failure can go on to impact their future self-esteem and performance. For example, the model suggests that successes that are attributed to ability and effort, as opposed to luck, will be associated with strong increases in self-esteem and performance. For more on this, see: Weiner, B. “An Attributional Theory of Achievement Motivation and Emotion.” Psychological Review (1985), pp. 548-73. Instructor Manual for Organizational Behavior: Improving Performance and Commitment in the Workplace Jason Colquitt, Jeffery LePine, Michael Wesson 9780077862565, 9781260261554