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This Document Contains Chapters 13 to 16 Chapter 13 Group Dynamics and Teamwork CHAPTER OBJECTIVES • Define the term group. • Explain the significance of cohesiveness, roles, norms, and ostracism in regard to the behavior of group members. • Identify and briefly describe the six stages of group development. • Define organizational politics, and summarize relevant research insights. • Explain how groupthink can lead to blind conformity. • Define and discuss the management of virtual teams • Discuss the criteria and determinants of team effectiveness. • Explain why trust is a key ingredient of teamwork, and discuss what management can do to build trust. OPENING CASE The Changing Workplace: Show Them Some Love Apple vice president and dean of their internal “University”, Joel Podolny demonstrated how important it is to have contact with your employees. While associate dean at Standard Business School he routinely walked the halls to connect with faculty, learn more about what they were working on, and understand the challenges they faced. He took the time to listen and show appreciation for his faculty. Although this took valuable time out of his busy schedule it was well worth it as he was well loved by his staff. The lesson learned for managers in a variety of occupation fields is how important it is to step away from routine tasks and spend more time showing employees a little love. Ask Students: • What is it about Joel Podolny’s management style that distinguishes him from the majority of managers in the workforce today? • Why did his employees love him? • As a manager, what action can you take today to begin implementing Podolny’s successful approach to management? LECTURE OUTLINE The more managers know about building and sustaining good relationships, the better. Survey results indicate that poor relationships/interpersonal skills is one of the leading causes of managerial failure. What is involved is the concept of social capital, “productive potential resulting from strong relationships, goodwill, trust, and cooperative effort. I. FUNDAMENTAL GROUP DYNAMICS All groups may be collections of individuals, but not all collections of individuals are groups. A. What Is a Group? A group can be defined from a sociological perspective as two or more freely interacting individuals who share a common identity and purpose. There are four important dimensions to a group (see Figure 13.1). • It must contain two or more people. • The individuals must freely interact in some manner. • The interacting individuals must share a common identity, recognizing themselves as members of the group. • There must be a common purpose, at least a rough consensus, on why the group exists. B. Types of Groups • Informal Groups A group is an informal group if the principal reason for belonging is friendship. Informal groups usually evolve spontaneously. They serve to satisfy self-esteem needs. • Formal Groups A formal group is a group created for the purpose of doing productive work. It is usually formed for the purpose of contributing to the success of a larger organization. It tends to be more rationally structured and less fluid than informal groups. • What About Friendship in the Workplace? There are pros and cons to workplace friendships: 70 percent say they create a more supportive workplace and 69 percent indicate they increase teamwork. On the negative side, 44 percent say they feed gossip and 37 percent indicate they encourage favoritism. If there is unrelenting candor and honesty in work relationships, friendships between managers and subordinates can make the work environment more fun for everyone. However, clear policies and procedures need to be developed to minimize perception of favoritism for friends and family members. Also, a social media policy should be implemented to avoid inappropriate postings to Facebook, LinkedIn, YouTube and other sites. C. Attraction to Groups Individual commitment to either an informal or a formal group hinges on two factors. • Attractiveness, the outside-looking-in view. • Cohesiveness, the tendency of group members to follow the group and resist outside influences (the inside-looking-out view), the “we” rather than “I” perspective where members stick together. • Factors that either enhance or destroy group attractiveness and cohesiveness are listed in Table 13.1. D. Roles If the organization is appropriately structured and if everyone plays his or her role(s) effectively and efficiently, then there is a greater chance of organizational success. A role is a socially determined prescription for behavior in a specific position. Role models are a powerful influence. E. Norms Norms are general standards of conduct that help individuals judge what is right or wrong or good or bad in a given social setting. Norms are culturally derived and vary from one culture to another. Although they are usually unwritten, norms influence behavior enormously. Norms are enforced for at least four different reasons. • To facilitate survival of the group • To simplify or clarify role expectations • To help group members avoid embarrassing situations (protect self-images) • To express key group values and enhance the group’s unique identity Figure 13.2 illustrates the fact that norms tend to go above and beyond formal rules and written policies. Compliance is shaped with social reinforcement. Ostracism, or rejection from the group (often for not following group norms), is figuratively the capital punishment of group dynamics. II. GROUP DEVELOPMENT Groups undergo a maturation process before becoming effective. A working knowledge of the characteristics of a mature group can help managers envision a goal for the group development process. A. Characteristics of a Mature Group 1. Members are aware of their own and each others’ assets and liabilities vis-à-vis the group’s task. 2. These individual differences are accepted without being labeled as good or bad. 3. The group has developed authority and interpersonal relationships that are recognized and accepted by the members. 4. Group decisions are made through rational discussion. Minority opinions and dissension are recognized and encouraged. Attempts are not made to force decisions or a false unanimity. 5. Conflict is over substantive issues concerning group goals rather than emotional issues involving processes or people. 6. Members are aware of the group’s processes and their own roles in them. Effectiveness and productivity should increase as the group matures. A hidden but significant benefit of group maturity is that individuality is strengthened, not extinguished. B. Six Stages of Group Development Experts have identified six distinct stages in the group development process from formation to maturity (see Figure 13.3). • Stage 1: Orientation • Stage 2: Conflict and Challenge • Stage 3: Cohesion • Stage 4: Delusion • Stage 5: Disillusion • Stage 6: Acceptance Time-wasting problems and inefficiencies can be minimized if group members are consciously aware of this developmental process. III. ORGANIZATIONAL POLITICS Organizational life is often highly charged with political wheeling-and-dealing. Workplace surveys reveal that organizational politics can undermine effectiveness and be an irritant to employees. Whether politically motivated or not, managers need to be knowledgeable about organizational politics because their careers will be affected by it. A. What Does Organizational Politics Involve? • Organizational politics is “the pursuit of self-interest at work in the face of real or imagined opposition.” Researchers have identified both positive and negative aspects of organizational politics. • Employees resort to political behavior when they are unwilling to trust their career solely to competence, hard work, or luck. A culture that presents employees with unreasonable barriers to individual and group success tends to foster political maneuvering. B. Research on Organizational Politics One research study yielded the following discoveries: • The higher the level of management, the greater the perceived amount of political activity. • The larger the organization, the greater the perceived amount of political activity. • Personnel in staff positions were viewed as more political than those in line positions. • People in marketing were the most political; those in production were the least political. • “Reorganization changes” reportedly prompted the most political activity. • A majority (61 percent) of those interviewed believed that organizational politics helps advance one’s career. • Forty-five percent believed that organizational politics distracts from organizational goals. The last two findings make it clear that although political activities were seen as helpful to the individual, managers were split on their impact on the organization. The reasons for positive organizational impact included • Gaining visibility for ideas • Improving coordination and communication • Developing teams and groups • Increasing esprit de corps Negative impacts included distraction of managers from organizational goals, misuse of resources, and conflict. C. Political Tactics • Posturing: including “one-upmanship” and taking credit for other people’s work • Empire building: control over human and material resources • Making the supervisor look good: “apple polishing” • Collecting and using social IOUs: reciprocal exchange of political favors, including helping someone look good or preventing someone from looking bad • Creating power and loyalty cliques: to face superiors and competitors as a cohesive group rather than alone • Destructive competition: a last-ditch effort, including character assassination and sabotage Table 13.2 gives a practicing manager’s advice on how to win at office politics. D. Antidotes to Political Behavior Excessive political maneuvering can become a serious threat to productivity. The following five tips can help keep organizational politics within reasonable bounds. • Strive for a climate of openness and trust. • Measure performance results rather than personalities. • Encourage top management to refrain from exhibiting political behavior that will be imitated by subordinates. • Strive to integrate individual and organizational goals through meaningful work and career planning. • Practice job rotation to encourage broader perspectives and understanding of the problems of others. IV. CONFORMITY AND GROUPTHINK Conformity means complying with the role expectations and norms perceived by the majority to be appropriate in a particular situation. Conformity enhances predictability, which is generally thought to be good for rational planning and productive enterprise. A. Research on Conformity Solomon Asch conducted a classic laboratory study on conformity designed to answer this question: How often will an individual take a stand against a unanimous majority that is obviously wrong? • The Hot Seat Asch’s study involved seven to nine college students, but all except one were confederates in the experiment. During the test, confederates selected the obviously wrong response, placing the naive individual at odds with the group (see Figure 13.4). • Following the Immoral Majority In the study, only 20 percent of the naive subjects remained entirely independent in their judgments when confronted with a unanimous disagreement, even though the group was obviously wrong. Replications of this study in the Middle East and in Japan have demonstrated that this tendency toward conformity is not unique to American culture. In fact, it is a greater problem in collectivist (“we”) cultures such as Japan than in individualist (“me”) cultures such as the United States and Canada. B. Groupthink Psychologist Irving Janis uncovered an undesirable by-product of group cohesiveness: groupthink. Groupthink is a way of thinking that occurs in a cohesive group, when the desire for consensus outweighs the desire to examine alternative options realistically. • Symptoms of Groupthink The onset of groupthink is foreshadowed by a definite pattern of symptoms. • Excessive optimism • An assumption of inherent morality • Suppression of dissent • An almost desperate quest for unanimity Given such a climate, the probability of a poor decision is high. • Preventing Groupthink • Ask the question “Are we allowing ourselves to become victims of groupthink?” • Avoid using groups to rubber-stamp decisions that have already been made. • Urge each group member to be a critical evaluator. • Bring in outside experts for fresh perspectives. • Assign someone to play the role of devil’s advocate to challenge assumptions and alternatives. • Take time to consider possible side effects and consequences of alternative courses of action. V. TEAMS, TEAMWORK, AND TRUST Teamwork is a key factor in success today. Unfortunately, team skills in today’s typical organization tend to lag far behind technical skills. A. Cross-Functional Teams A cross-functional team is a task group staffed with a mix of specialists focused on a common objective. Cross-functional teams are becoming commonplace. They present management with the immense challenge of getting technical specialists to be effective boundary spanners. B. Virtual Teams A virtual team is a physically dispersed task group linked electronically. Face-to-face contact usually is minimal or nonexistent. Because virtual organizations and teams are so new, managers have to learn from the school of hard knocks rather than from established practice. Periodic face-to-face interaction, trust building, and team building are more important than ever when team members are widely dispersed in time and space. (See Table 13.3.) Virtual teamwork may be faster than the traditional face-to-face kind, but it is by no means easier. C. What Makes Workplace Teams Effective? A model of team effectiveness criteria and determinants is presented in Figure 13.5. It is a generic model, applying equally well to all workplace teams. Determinants of team effectiveness are grouped into people-, organization-, and task-related factors. These factors are part of a complex and interdependent whole. The pursuit of team effectiveness and teamwork is an endless battle with no guarantee of success. D. Trust: A Key to Team Effectiveness Trust, a belief in the integrity, character, or ability of others, is essential if people are to achieve anything together in the long run. Participative management programs are very dependent on trust. Harris Interactive polls in the United States found that the public’s “confidence in executives” had plunged from an already low 28 percent to 12 percent. Managers determine the level of trust in the organization and in its component work groups and teams. • Zand’s Model of Trust Figure 13.6 shows Dale E. Zand’s model of work group interaction, which puts trust into proper perspective. Zand believes that trust is the key to establishing productive interpersonal relationships. The things managers can do to foster trust include being open and honest, talking with their people rather than at them, demonstrating a willingness to be influenced by others, and changing if the facts show that a change is appropriate. • Six Ways to Build Trust According to management professor and consultant Fernando Bartolomé, the following attributes of managers help build trust in the workplace. • Communication: giving accurate and timely feedback; being open and honest • Support: being approachable, showing an active interest, coming to subordinates’ defense • Respect: showing respect, primarily through delegation and listening • Fairness: being objective and liberal in giving credit and praise • Predictability: being dependable and consistent and keeping promises • Competence: being technically and professionally competent, a good role model Managers find that trust begets trust. Those who feel they are trusted tend to trust others in return. Chapter 14 Influence, Power, and Leadership CHAPTER OBJECTIVES • Identify and describe eight generic influence tactics used in modern organizations. • Identify the five bases of power, and explain what it takes to make empowerment work. • Explain the concept of emotional intelligence in terms of Goleman’s four leadership traits. • Summarize what the Ohio State model has taught managers about leadership. • Describe the path-goal theory of leadership, and explain how the assumption on which it is based differs from the assumption on which Fiedler’s contingency theory is based. • Describe a transformational leader, and explain Greenleaf’s philosophy of the servant leader. • Identify the two key functions that mentors perform, and explain how a mentor can develop a junior manager’s leadership skills. • Explain the management of antecedents and consequences in behavior modification. OPENING CASE The Changing Workplace: Charting Your Pathway to Influence and Power From high school drop out to the U.S. Marines and now president and COO of Universal Studios, Ron Meyer provides an inspiring story of transformation. He demonstrated the ability to overcome three obstacles: 1. You must believe that personal change is possible and be willing to embark on a path of personal growth; otherwise you will never develop the attributes that bring you power. 2. You need to see yourself and your strengths and weaknesses as objectively as possible. 3. You need to understand the most important qualities for building a power base so you can focus your limited time and attention on developing those…. People who rise to great heights have the will and skill to turn ambition into accomplishments. They have ambition, energy and focus. The four skills used in acquiring power include: 1. Self-knowledge and a reflective mind-set 2. Confidence and the ability to project self-assurance 3. The ability to read others and empathize with their point of view 4. A capacity to tolerate conflict. Ask Students: • Where do you stand? Do you have the will, the drive to take on big challenges? • Do you have the skill, the capabilities to turn ambition into achievement? • What areas need work? Where will you focus your time and energy? • How will you develop the necessary capabilities? LECTURE OUTLINE Influence is any attempt by a person to change the behavior of superiors, peers, or lower-level employees. Influence is not inherently good or bad. Managerial success is firmly linked to the ability to exercise the right sort of influence at the right time. See Table 14.1 for an overview of the eight generic tactics and the rank order (by direction of influence). I. INFLUENCE TACTICS IN THE WORKPLACE Research has unearthed eight generic on-the-job influence tactics. • Consultation: seeking someone’s participation in a decision or change • Rational persuasion: trying to convince someone by relying on a plan or logic. • Inspirational appeals: appealing to someone’s emotions, values, or ideals • Ingratiating tactics: making someone feel important or good, acting humble • Coalition tactics: seeking the aid of others to persuade someone to agree • Pressure tactics: relying on intimidation, demands, or threats • Upward appeals: obtaining formal or informal support of upper management • Exchange tactics: offering an exchange of favors, offering a personal sacrifice II. POWER A. What Is Power? Power is the ability to accomplish something by organizing human, informational, and material resources. Power affects organizational members in three areas. 1. Decisions 2. Behavior 3. Situations Three different approaches to the concept of power are 1. “Power over”: the ability to dominate 2. “Power to”: the ability to act freely 3. “Power from”: the ability to resist the demands of others Authority is an officially sanctioned privilege that may or may not get results. In contrast, power is the demonstrated ability to get results. Figure 14.1 illustrates the authority/power relationship. B. The Five Bases of Power • Reward power is based on one’s ability to grant rewards to those who comply with a command or request. • Coercive power is rooted in fear and based on threatened or actual punishment. • Legitimate power is achieved when a person’s superior position alone prompts another person to act in a desired manner. • Referent power is based on compliance with an individual because of identification with him or her. Charisma is a term often used in conjunction with referent power. • Expert power is based on dispensing information to those in need of such information. C. Empowerment Empowerment occurs when employees are adequately trained, provided with all relevant information and the best possible tools, fully involved in key decisions, and fairly rewarded for results. This requires the view that power is an unlimited resource. Today, the issue is not whether to empower employees, but how. Much of the burden for successful empowerment falls on the individual. III. LEADERSHIP Developing potential leaders was reported and the number one management challenge according to a recent survey. Remember, there is no one-size-fits-all leadership model. Peter Drucker offered the following leader effectiveness criteria: • They asked, “What needs to be done?” • They asked, “What is right for the enterprise?” • They developed action plans. • They took responsibility for decisions. • They took responsibility for communicating. • They were focused on opportunities rather than problems. • They ran productive meetings. • They thought and said “we” rather than “I.” A. Leadership Defined Leadership is the process of inspiring, influencing, and guiding others to participate in a common effort. B. Formal and Informal Leaders Formal leadership consists of influencing relevant others to pursue official organizational objectives. Informal leadership, in contrast, is the process of influencing others to pursue unofficial objectives that may or may not serve the organization’s interests. C. The Issue of Leaders versus Managers: A Middle Ground Leaders are typically viewed as farsighted and even heroic visionaries who boldly blaze new trails. In contrast, a less-flattering portrayal of the manager is that of a facilitator who tends to the details of turning the leader’s vision into reality. The future belongs to those who can effectively blend the characteristics listed in Table 14.2. D. Trait Theory During most of recorded history, the prevailing assumption was leaders are born and not made. This so-called great-man approach eventually gave way to trait theory, which said that leadership traits can also be acquired through learning and experience. • An Early Trait Profile In 1948, a comprehensive review of competing trait theories led to moderate agreement that leaders are above average in only five traits. • Intelligence • Scholarship • Dependability in exercising responsibilities • Activity and social participation • Socioeconomic status • A Modern Trait Profile: Leaders with Emotional Intelligence Whereas standard intelligence (IQ) deals with thinking and reasoning, emotional intelligence (EQ) deals more broadly with building social relationships and controlling one’s emotions. Emotional intelligence can be defined as the ability to monitor and control one’s emotions and behavior in complex social settings. Daniel Goleman and his colleagues recently cast emotional intelligence in terms of four leadership traits that can be learned: 1. self-awareness 2. self-management 3. social awareness 4. relationship management. E. Behavioral Styles Theory During World War II, the focus shifted from personal traits of successful leaders to patterns of behavior (called leadership styles). Table 14.3 offers an updated review of the three classic leadership styles. Debate has been vigorous about the relative value and appropriateness of the three leadership styles: 1. authoritarian 2. democratic 3. laissez-faire. • The Ohio State Model This used a matrix with two dimensions: initiating structure and consideration. This led to identifying four styles of leadership (see Figure 14.3). F. Situational Theory This approach is based on the belief that one best style of leadership simply does not exist. The fundamental assumption that situational-leadership studies share is that successful leadership occurs when the leader’s style matches the situation. Three versions of the concept are outlined below. • Fiedler’s Contingency Theory This is the most thoroughly tested of the theories (see Figure 14.4). It assumes that managers cannot shift from style to style effectively. Fiedler believes leaders are either task-motivated or relationship-motivated. • House’s Updated Path-Goal Theory This is a derivative of expectancy motivation theory (see Chapter 13). It focuses on enhancing motivation by (1) clarifying the individual’s perception of work goals, (2) linking meaningful rewards to goal attainment, and (3) explaining how goals and desired rewards can be achieved. The personal characteristics of employees, environmental pressures, and demands on employees all vary from situation to situation. House’s updated path-goal model advises managers to rely contingently on eight categories of leader behavior. • Path-goal clarifying behaviors • Achievement-oriented behaviors • Work facilitation behaviors • Supportive behaviors • Interaction facilitation behaviors • Group decision behaviors • Networking behaviors • Value-based behaviors The assumption that managers can and do shift situationally from one behavior pattern to another clearly sets path-goal theory apart from Fiedler’s model. G. Transformational Leadership Theory James McGregor Burns drew a distinction between transactional and transformational leadership in his 1978 book, Leadership. Transformational leaders are visionaries who challenge people to achieve exceptionally high levels of morality, motivation, and performance. • Transactional versus Transformational Leaders o Transformational leaders rely heavily on referent power. o Transactional leaders monitor people, so they do the expected, according to plan. o Transformational leaders inspire people, so they do the unexpected. • Positive Evidence o The distinction in Table 14.4 is not between bad and good leaders. Both transactional and transformational leaders are needed today. o Transformational leadership is needed in rapidly changing situations. o Transactional leaders can best handle stable situations. H. Putting to Work What You’ve Learned by Using “Practical Intelligence” and Becoming a “Servant Leader” Finding ways to practice leadership can help present and future managers develop their abilities. Leading effectively is learned only by doing. • Practical Intelligence Practical intelligence is the ability to solve everyday problems by using knowledge gained from experience. It involves changing oneself to suit the environment, changing the environment to suit oneself, or finding a new environment within which to work. • Servant Leaders The servant leader is an ethical person who puts others—not herself or himself—in the foreground. Greenleaf, who developed the concept, portrays the servant leader as one who, in addition to putting others first, is trustworthy and accepts others at face value. IV. MENTORING A. Learning from a Mentor • A mentor is an individual who systematically develops another person’s abilities through intensive tutoring, coaching, and guidance. • Research suggests that informal mentor relationships that arise naturally work better than formally structured pairings. B. Dynamics of Mentoring • According to research done by Kathy Kram, mentoring fulfills two important functions: (1) a career enhancement function and (2) a psychological and social support function (see Table 14.5). • Mentor relationships were found to average about five years in length. C. New Approaches to Mentoring Informal and flexible summarize the theme of mentoring approaches today. The following are emerging trends: 1. Speed mentoring 2. Informal mentoring 3. Reverse mentoring 4. Group mentoring 5. Anonymous mentoring 6. Free-form mentoring Traditional and modern approaches can be blended to suit the situation. V. BEHAVIOR MODIFICATION Behaviorism maintains that observable behavior is more important than hypothetical inner states such as needs, motives, and expectations. A. What Is Behavior Modification? • B. F. Skinner was the father of operant conditioning, the study of how behavior is controlled by the surrounding environment. • Behavior modification (B. Mod.) involves systematically managing environmental factors to get people to do the right things more often and the wrong things less often. This is accomplished by managing the antecedents and/or consequences of observable behavior. B. Managing Antecedents • An antecedent is an environmental cue that prompts an individual to behave in a given manner. • Learning through experience to interpret antecedents is sometimes referred to as cue control. • Although often overlooked, the management of antecedents is a practical and relatively simple way of encouraging good performance (see Table 14.6). C. Managing Consequences There are four different classes of consequences. 1. Positive reinforcement encourages a specific behavior by immediately following it with a consequence that the individual finds pleasing. 2. Negative reinforcement encourages a specific behavior by immediately withdrawing or terminating something a particular person finds displeasing. 3. Extinction discourages a specific behavior by ignoring it. 4. Punishment discourages a specific behavior by the immediate presentation of an undesirable consequence or the removal of something desirable. • In regard to managing consequences, behavior modification works only when there is a contingent relationship between a specific behavior and a given consequence. D. Positively Reinforce What Is Right about Job Performance (the Art of “Bucket Filling”) • Behavior-modification proponents prefer to build up desirable behaviors rather than tearing down undesirable ones. • To encourage productive behaviors, managers are advised to focus on the positive aspects of job performance when managing consequences. • Positive reinforcement also is the core message in the best-seller How Full Is Your Bucket? Positive Strategies for Work and Life. The book states that “regular recognition and praise” boost productivity and satisfaction, while reducing accidents and turnover. E. Schedule Positive Reinforcement Appropriately • Both the type and the timing of consequences are important in successful B. Mod. • Under continuous reinforcement, every instance of the desired behavior is reinforced. • Intermittent reinforcement calls for reinforcing some, rather than all, of the desired responses. With intermittent reinforcement, the more unpredictable the payoff schedule is, the better the results will be. Chapter 15 Change, Conflict, and Negotiation CHAPTER OBJECTIVES • Identify and describe four types of organizational change, according to the Nadler-Tushman model. • Explain how people tend to respond differently to changes they like and those they dislike. • List at least six reasons why employees resist change, and discuss what management can do about resistance to change. • Describe how the unfreezing-change-refreezing metaphor applies to organization development (OD). • Describe tempered radicals, and identify the 5Ps in the checklist for grassroots change agents. • Contrast the competitive and cooperative conflict styles. • Identify and describe five conflict resolution techniques. • Identify and describe the elements of effective negotiation, and explain the advantage of added value negotiating (AVN). OPENING CASE The Changing Workplace: In Search of the Paperless Office – Part I David Zugheri, co-founder of First Houston Mortgage decided his decided to go paperless. Now, this sounds like a noble thing to do in this environmentally aware business world we live in. However, Zugheri simply decided to implement this overnight. At 8:00 a.m. one morning he told his 125 employees the new rule: no paper. It only took until noon the same day for Zugheri to realize this was not the best way to approach change. Ask Students: • What Zugheri’s first mistake? • What did he do right? • If you were asked to provide Zugheri with a better approach to implementing what would you suggest? LECTURE OUTLINE I. CHANGE: ORGANIZATIONAL AND INDIVIDUAL PERSPECTIVES A. Types of Organizational Change Figure 15.1 illustrates an instructive typology of organizational change developed by David A. Nadler and Michael L. Tushman. Its basic dimensions are given below. Anticipatory changes are any systematically planned changes intended to take advantage of expected situations. Reactive changes are those necessitated by unexpected environmental events or pressures. Incremental changes involve subsystem adjustments needed to keep the organization on its chosen path. Strategic changes alter the overall shape or direction of the organization. There are four resulting types of organizational change in the Nadler-Tushman model. • Tuning involves actively anticipating and avoiding problems rather than passively waiting for things to go wrong before taking action. This is the most common, least intense, and least risky type of change. Other names include preventive maintenance and kaizen (continuous improvement). • Adaptation involves incremental changes in reaction to external problems, events, or pressures. • Re-orientation is anticipatory and strategic in scope. This involves “frame bending,” significantly redirecting the organization but without a complete break with the past. • Re-creation is essentially “frame breaking,” completely realigning a company in response to competitive pressures. This is the most intense and risky type of organizational change. B. Individual Reactions to Change Ultimately, workplace changes of all types become a personal matter for employees. People tend to respond to changes they like differently than they do to changes they dislike. Managerial steps for both types of change are listed in Table 15.1. • How People Respond to Changes They Like A three-stage adjustment is typical when people go through a change they like. The three stages are unrealistic optimism, reality shock, and constructive direction (see Figure 15.2). • How People Respond to Changes They Fear and Dislike On-the-job change generally is more feared than welcomed. The stages in dealing with this change are getting off on the wrong track, laughing it off, growing self-doubt, buying in, and constructive direction (see Figure 15.3). • A Contingency Model for Getting Employees Through Changes Contingency managers adapt their techniques to the situation. II. OVERCOMING RESISTANCE TO CHANGE Dealing with change is an integral part of modern management. The initial impact causes ripples of change to radiate in all directions, often with unpredictable consequences. A common consequence of change in organizations is resistance from those whose jobs are directly affected. Management faces the challenge of foreseeing and neutralizing resistance to change. A. Why Do Employees Resist Change? • Surprise. Significant changes that are introduced on the spur of the moment or with no warning can create a threatening sense of imbalance in the workplace. • Inertia. Many members of the typical organization desire to maintain a safe, secure, and predictable status quo. • Misunderstanding/Ignorance/Lack of Skills. Without adequate introductory or remedial training, an otherwise positive change may be perceived in a negative light. • Emotional Side Effects. Those who are forced to accept on-the-job changes can experience a sense of powerlessness and even anger. The subsequent backlash can be passive or active. • Lack of Trust. When employees don’t trust management, they don’t believe promises of improvement. • Fear of Failure. Challenges presented by significant on-the-job changes can be intimidating. • Personality Conflicts. Managers who are disliked are poor conduits for change. • Poor Timing. Internal and/or external events can conspire to create resentment about a particular change. • Lack of Tact. How something is said is as important as what is said. • Threat to Job Status/Security. Because employment fulfills basic needs, employees may resist changes with real or imagined impacts on job status or security. • Breakup of Work Group. Significant changes can tear the fabric of on-the-job social relationships. • Passive-Aggressive Organizational Culture. This resistance hides behind smiling faces; passive-aggressive behavior becomes a major barrier to change when it becomes embedded in the organization’s culture. • Competing Commitments. Employees may not have a problem with the change itself but rather with how it disrupts their pursuit of other goals. B. Strategies for Overcoming Resistance to Change 1. Education and communication. The idea here is to help employees understand the true need for a change as well as the logic behind it. 2. Participation and involvement. By participating in both the design and the implementation of a change, one acquires a personal stake in its success. 3. Facilitation and support. Management support in the form of special training, job stress counseling, and time off can be helpful in alleviating the fear and anxiety that lead to resistance. 4. Negotiation and agreement. This involves exchanging something of value in return for cooperation with the change. 5. Manipulation and co-optation. Manipulation occurs when managers selectively withhold or dispense information and consciously arrange events to increase the chance that a change will be successful. Co-optation involves token participation. 6. Explicit and implicit coercion. Managers can force employees to go along with a change by threatening them. As shown in Table 15.2, each strategy has advantages and disadvantages. Appropriateness to the situation is the key to success. III. MAKING CHANGE HAPPEN Managers need to be active agents of change rather than passive observers or victims. This active role requires foresight, responsiveness, flexibility, and adaptability. A. Planned Change Through Organization Development (OD) Organization development (OD) consists of planned efforts to help people work and live together more effectively, over time, in their organizations. These goals are achieved by applying behavioral science principles, methods, and theories adapted from the fields of psychology, sociology, education, and management. Others simply call OD planned change. • The Objectives of OD OD programs vary because they are tailored to unique situations. Certain objectives, however, are common to most OD programs: • Deepen the sense of organizational purpose (or vision) and align individuals with that purpose. • Strengthen interpersonal trust, communication, cooperation, and support. • Encourage a problem-solving rather than a problem-avoiding approach to organizational problems. • Develop a satisfying work experience capable of building enthusiasm. • Supplement formal authority with authority based on personal knowledge and skill. • Increase personal responsibility for planning and implementing. • Encourage personal willingness to change. Although all of these objectives are addressed by one or another management technique, organization development gives managers a vehicle for systematically introducing change. • The OD Process Unfreezing prepares members of a social system for change and then helps neutralize initial resistance. Once change has been introduced, refreezing is necessary to follow up on problems, complaints, unanticipated side effects, and any lingering resistance. This OD model is based on Kurt Lewin’s approach to handling change (see Figure 15.4). B. Unofficial and Informal Grassroots Change OD is rationally planned, formal, systematic, and initiated by top management. Many of today’s organizations tend to be spontaneous, informal, experimental, and driven from within. Change in these circumstances is not top-down in the tradition of OD. Rather, it involves change from inside the organization. Two perspectives on this are given below. • Tempered radicals are people who want to succeed in their organizations yet want to live by their values or identities, even if they are somehow at odds with the dominant culture of their organizations. There are four practical guidelines for tempered radicals: • Think small for big results. Start small and build a string of steadily larger victories. • Be authentic. Base your actions on your convictions and thoughtful preparation, not on rash emotionalism. • Translate. Build managerial support by explaining the business case for your ideas. • Don’t go it alone. Build a strong network to provide moral support and help advance your cause. • The 5P Checklist for Grassroots Change Agents (Turning Ideas into Action). The 5P model gives change agents at all levels a road map for turning ideas into action (see Figure 15.5). The 5P checklist consists of five key action steps. • Preparation: Is the concept or problem clearly defined? • Purpose: Can the goal of the change initiative be expressed in clear, measurable terms? • Participation: Are key people willing to fight for or advocate the change? • Progress: Are milestones and deadlines being met? Are roadblocks being removed? • Persistence: Has a sense of urgency been communicated? Does everyone have reasonable expectations about a time frame for the change? The 5P approach can help ordinary employees create extraordinary change. IV. MANAGING CONFLICT Conflict is intimately related to change and interpersonal dealings. The term conflict has a strong negative connotation, but it does not have to be a negative experience. Conflict involves incompatible behaviors; it consists of one person interfering, disrupting, or in some other way making another’s actions less effective. A. Dealing with the Two Faces of Conflict Figure 15.6 graphically illustrates the difference between competitive and cooperative conflict. In the competitive mode, the parties pursue directly opposite goals and mistrust each other’s intentions. The cooperative conflict cycle, in contrast, is a mutually reinforcing experience that serves the best interests of both parties. There are two sets of tools for managing conflict: conflict triggers for stimulating conflict and conflict resolution techniques. B. Conflict Triggers A conflict trigger is a circumstance that increases the chances of group or interpersonal conflict. Major conflict triggers include • Ambiguous or overlapping jurisdictions • Competition for scarce resources • Communication breakdowns • Time pressure • Unreasonable standards, rules, policies, or procedures • Personality clashes • Status differentials • Unrealized expectations C. Resolving Conflict Managers may choose to do nothing (avoidance strategy) when faced with destructive conflict. Other strategies include • Problem solving • Superordinate goals • Compromise • Forcing • Smoothing Problem solving and skillfully negotiated compromises are the only approaches that remove the actual sources of conflict. All the other approaches are short-run, stopgap measures. Problem solving and full negotiation sessions, however, take up valuable time, which management may not have at the moment. V. NEGOTIATING Negotiating is a fact of everyday life, and managers have even more opportunities to negotiate. Negotiation is “a decision-making process among interdependent parties who do not share identical preferences.” Two common types of negotiation are two-party and third-party. A. Elements of Effective Negotiation • Adopting a Win-Win Attitude. This works against the win-lose attitude of many cultures, particularly the United States. • Knowing Your BATNA This Best Alternative to a Negotiated Agreement is the standard against which any proposed agreement should be measured. • Identifying the Bargaining Zone The bargaining zone is the gap between the BATNAs for the two parties; the area of overlapping interests where agreement is possible (see the middle of Figure 15.7). B. Added Value Negotiating Developed by Karl and Steve Albrecht, this process bridges the gap between win-win theory and practice. Added value negotiating (AVN) is a five-step process involving the development of multiple deals that add value to the negotiating process. The five steps are 1. Clarify interests. 2. Identify options. 3. Design alternative deal packages. 4. Select a deal. 5. Perfect the deal. Chapter 16 Organizational Control and Quality Improvement CHAPTER OBJECTIVES • Identify three types of control and the components common to all control systems. • Discuss organizational control from a strategic perspective. • Identify the four key elements of a crisis management program. • Identify five types of product quality. • Explain how providing a service differs from manufacturing a product, and identify the five service-quality dimensions. • Define total quality management (TQM), and specify the four basic TQM principles. • Describe at least three of the seven TQM process improvement tools. • Explain how Deming’s PDCA cycle can improve the overall management process. • Specify and discuss at least four of Deming’s famous 14 points. OPENING CASE The Changing Workplace: Apple Takes a Bite Out of Customer Service Hassles Apple’s Genius Bar was inspired by the hotel concierge desk in an effort to provide customers with a great service experience. In today’s market we continually hear horror stories, particularly in the tech industry, about terrible customer service. Rather than joining their competitors in this movement which has created far too many angry customers, Apple has embarked on a different path that focuses on delivery a superior customer experience. For a company that has become well known for its innovative products that redefine what is possible, they are also becoming equally well known for their outstanding service. Certainly a rare combination but something we hope more companies will strive for. Ask Students: • What do the Four Seasons Hotel and Apple have in common? • Why do you think Apple hired people from Target and Gap to help them launch their retail stories when these people had no history in the tech industry? • Do you think it is a good idea to model the customer-service experience at the Genius Bar based on a hotel concierge’s desk? Explain. LECTURE OUTLINE I. FUNDAMENTALS OF ORGANIZATIONAL CONTROL Control is the process of taking the necessary preventive or corrective actions to ensure that the organization’s mission and objectives are accomplished as effectively and efficiently as possible. The purpose of the control function is always the same: get the job done despite environmental, organizational, and behavioral obstacles and uncertainties. A. Types of Control (see Figure 16.1) • Feedforward control is the active anticipation of problems and their timely prevention, rather than after-the-fact reaction. Preventive maintenance is one example of feedforward control. Of the three types of control, American managers tend to do the poorest job with feedforward control. • Concurrent control involves monitoring and adjusting ongoing activities and processes to ensure compliance with standards. • Feedback control consists of gathering information about a completed activity, evaluating that information, and taking steps to improve similar activities in the future. B. Components of Organizational Control Systems A small organization directed by a single, highly motivated individual with expert knowledge of all aspects of an operation represents the ideal control situation. With the size and complexity of most productive organizations, firsthand control by one person is obsolete. Consequently, multilevel, multidimensional organizational control systems have evolved. A study of nine large companies in different industries allowed researchers to identify six distinct control subsystems (we have added a seventh). 1. Strategic plans 2. Long-range plans 3. Annual operating budgets 4. Statistical reports 5. Performance appraisals 6. Policies and procedures 7. The organization’s culture Complex organizational control systems work because they include three basic components common to all organizational control systems: • Objectives provide measurable reference points for corrective action. • Standards serve as guideposts on the way to reaching the targets, warning people when they are off the track. Benchmarking—identifying, studying, and imitating the business practices of market leaders—is a proven technique for establishing challenging standards. The central idea is to be competitive by striving to be as good as or better than the best in the business. • An evaluation-reward system needs to be tied equitably to documented results and improvement. C. Strategic Control Managers who fail to complement their strategic planning with strategic control will win some battles but lose the war. The performance pyramid in Figure 16.2 illustrates the necessarily tight linkage between planning and control. • Control measures are needed for cycle time, waste, flexibility, productivity, and financial results. • Cycle time is the time it takes for a product to be transformed from raw materials or parts into a finished good. D. Identifying Control Problems • The executive reality check occurs when top-level managers periodically work in the trenches to increase their awareness of operations. • Internal Audits “Internal auditing is the independent appraisal of the various operations and systems control within an organization to determine whether acceptable policies and procedures are followed, established standards are met, resources are used efficiently and economically, planned missions are accomplished effectively, and the organization’s objectives are being achieved.” This is also called a process audit by some and a management audit by others. Timely and valid internal audits are a primary safeguard against organizational decline, as well as against theft and fraud. • Symptoms of Inadequate Control o An unexplained decline in revenues or profits o A degradation of service (customer complaints) o Employee dissatisfaction (complaints, grievances, turnover) o Cash shortages caused by bloated inventories or delinquent accounts receivable o Idle facilities or personnel o Disorganized operations (workflow bottlenecks, excessive paperwork) o Excessive costs o Evidence of waste and inefficiency (scrap, rework) II. CRISIS MANAGEMENT An organizational crisis is a low-probability, high-impact event that threatens the viability of the organization and is characterized by ambiguity of cause, effect, and means of resolution, as well as by the belief that decisions must be made swiftly. Managers need to “manage the unthinkable” in a foresighted, systematic, and timely manner. A. Crisis Management Defined Crisis management is the systematic anticipation of and preparation for internal and external problems that seriously threaten an organization’s reputation, profitability, or survival. This new discipline is intertwined with strategic control. B. Developing a Crisis Management Program A crisis management program is made up of four elements (see Figure 16.3). • Conducting a Crisis Audit A crisis audit is a systematic way of seeking out trouble spots and vulnerabilities. “What if?” questions and lists, such as the one in Table 16.1, can be useful during this stage. • Formulating Contingency Plans A contingency plan is a backup plan that can be put into effect when things go wrong. Contingency plans should specify early warning signals, actions to be taken, and expected consequences of those actions. Attention to detail is a crucial component of most contingency plans. Both crisis audits and related contingency plans need to be updated at least annually. • Creating a Crisis Management Team Organizational crisis management teams have been likened to SWAT teams. Crisis management teams necessarily represent different specialties, depending on the nature of the crises that might arise. Quick response and effective communication are the hallmarks of an effective crisis management team. • Perfecting the Program Through Practice Simulations, drills, and mock disasters provide invaluable practice for crisis management teams. Top management support of such exercises is essential to providing good role models and reinforcing the importance of the activities. Experts say management’s two biggest mistakes regarding organizational crises are (1) ignoring early warning signs and (2) denying the existence of a problem when disaster strikes. A good crisis management program effectively eliminates these self-defeating mistakes. III. THE QUALITY CHALLENGE Not long ago, North American industry was roundly criticized for paying inadequate attention to the quality of goods and services. Today, this has changed. There is even a national trophy for quality in the United States: the Malcolm Baldrige National Quality Award. Quality is not always a life-or-death matter, but it certainly is a major quality-of-life factor for each of us. A. Defining Quality The basic definition of quality is “conformance to requirements,” according to quality expert Philip Crosby. But because quality is much more than a simple either/or proposition, we need to analyze both product and service quality. B. Five Types of Product Quality • Transcendent quality is inherent value or innate excellence apparent to the individual. • Product-based quality is the presence or absence of a given product attribute. • User-based quality is determined by the product’s ability to meet the user’s expectations. • Manufacturing-based quality measures how well the product conforms to its design specifications or blueprint. • Value-based quality is a cost-benefit relationship—simply giving customers what they want at a price they consider fair. This is a subjective measure because it derives from human perception and personal preferences. C. Unique Challenges for Service Providers Services are a rapidly growing and increasingly important part of today’s global economy. Service-quality strategists say that it is no longer enough simply to satisfy the customer. The strategic challenge today is to anticipate and exceed the customer’s expectations. To varying extents, every organization is a service organization, but pure service organizations need to understand and manage five distinctive service characteristics. 1. Customers participate directly in the production process. 2. Services are consumed immediately and cannot be stored. 3. Services are provided where and when the customer desires. 4. Services tend to be labor-intensive. Customer service has been called a performing art requiring a great deal of “emotional labor.” 5. Services are intangible. Service-quality experts tell us that the only completely valid standard of comparison of service quality is the customer’s level of satisfaction—something that is based on perception and very hard to measure. D. Defining Service Quality Researchers surveyed hundreds of customers of various types of service organizations and uncovered five service-quality dimensions: reliability, assurance, tangibles, empathy, and responsiveness (RATER acronym). In this study, reliability was the most important dimension of service quality, regardless of the type of service involved. IV. AN INTRODUCTION TO TOTAL QUALITY MANAGEMENT (TQM) Total quality management (TQM) consists of creating an organizational culture committed to the continuous improvement of skills, teamwork, processes, product and service quality, and customer satisfaction. TQM is anchored to organizational culture because successful TQM is deeply embedded in virtually every aspect of organizational life. Personal commitment to systematic, continuous improvement needs to become an everyday matter. With the attention TQM received in a relatively short period, some unrealistic expectations were created. However, managers with realistic expectations about the deep and long-term commitment necessary for successful TQM can make it work. TQM can have a positive impact if managers understand and apply the four principles of TQM. A. Do It Right the First Time Designing and building quality into a product is much less costly than fixing or throwing away substandard components and finished products. Errors need to be caught and corrected at the source—that is, where the work is performed. B. Be Customer-Centered Internal customers are other members of the organization who rely on your work to get their job done. TQM requires all employees who deal directly with outsiders to be customer-centered. This means (1) anticipating the customer’s needs, (2) listening to the customer, (3) learning how to satisfy the customer, and (4) responding appropriately to the customer. Appropriate responses to customers depend on the specific nature of the business. (See Table 16.2 for one example.) Behavior, not good intentions, is what really matters. C. Make Continuous Improvement a Way of Life Kaizen is a Japanese word meaning “continuous improvement,” which means improving the overall system by constantly improving the little details. Kaizen practitioners view quality as an endless journey, not a final destination. There are four general areas for continuous improvement. • Improved and more consistent product and service quality • Faster cycle times • Greater flexibility • Lower costs and less waste D. Build Teamwork and Empowerment Empowerment, as defined in Chapter 14, occurs when employees are adequately trained, provided with all relevant information and the best possible tools, fully involved in key decisions, and fairly rewarded for results. TQM advocates prefer to reorganize the typical hierarchy into teams of people from different specialties. The following chapters provide more information on teamwork and employee involvement. • Chapter 11: Suggestion systems • Chapter 13: Teamwork and cross-functional teams • Chapter 14: Participative leadership E. The Seven Basic TQM Process Improvement Tools (See Figure 16.4 for illustrations of each) • Flow Chart. A flow chart is a graphical representation of a sequence of activities and decisions. • Cause-and-Effect Analysis. The fishbone diagram, named for its rough resemblance to a fish skeleton, helps TQM teams visualize important cause-and-effect relationships. • Pareto Analysis. Pareto analysis is based on the so-called 80/20 pattern. In TQM, a Pareto analysis involves constructing a bar chart by counting and tallying the number of times significant quality problems occur. The tallest bar on the chart, representing the most common problem, demands prompt attention. • Control Chart. A control chart is used to monitor the actual quality measurements and compare them to desired quality measurements during repetitive operations. • Histogram. A histogram is a bar chart showing whether repeated measurements of a given quality characteristic conform to a bell-shaped curve. Deviations from this standard signal the need for correction. • Scatter Diagram. A scatter diagram is used to plot the correlation between two variables. • Run Chart. A run chart, also called a time series or trend chart, tracks the frequency or amount of a given variable over time. Significant deviations from the norm signal the need for corrective action. Successful TQM requires a long-term organization wide drive for continuous improvement, and tools are just one visible feature of the process. Invisible factors such as values, learning, attitudes, motivation, and personal commitment dictate its ultimate success. V. DEMING MANAGEMENT A. Principles of Deming Management Deming management is the application of W. Edwards Deming’s ideas to revitalize productive systems by making them more responsive to the customer, more democratic, and more efficient. This approach was really a revolution when first proposed in the 1950s, because it directly challenged the legacy of Taylor’s scientific management. • Quality Improvement Drives the Entire Economy Higher quality eventually means more jobs, higher productivity, greater market share, and new business opportunities (see Figure 16.5). • The Customer Always Comes First “Quality should be aimed at the needs of the consumer, present and future.” • Don’t Blame the Person, Fix the System Deming’s research convinced him that management, work rules, technology, and the organization’s structure and culture are typically responsible for as much as 85 percent of substandard quality. The focus has to be on fixing the problem, not assigning blame. • Plan-Do-Check-Act The PDCA cycle reminds managers to focus on what is really important, use observed data, build upon accumulated knowledge, and be research-oriented in observing changes and results (see Figure 16.6). B. Deming’s Fourteen Points These are the heart and soul of Deming management. 1. Constant purpose. 2. New philosophy. 3. Give up on quality by inspection. 4. Avoid the constant search for lowest-cost suppliers. 5. Seek continuous improvement. 6. Train everyone. 7. Provide real leadership. 8. Drive fear out of the workplace. 9. Promote teamwork. 10. Avoid slogans and targets. 11. Get rid of numerical quotas. 12. Remove barriers that stifle pride in workmanship. 13. Education and self-improvement are key. 14. “The transformation is everyone’s job.” Instructor Manual for Management Robert Kreitner, Charlene Cassidy 9781111221362
