Organizational Behavior Essentials You Always Wanted To Know: Self Learning Management

Chapter 01

WHAT IS ORGANIZATIONAL BEHAVIOR? HISTORY, THEORIES, GLOBAL PERSPECTIVES

Beginning in this chapter and continuing throughout this course, we will cover numerous examples of how companies from around the world meet the challenges of global competition. Organizational behavior helps to build enhanced workplace interactions and connections between workers. Organizations plan for success using either fundamental or innovative strategies. They set goals and build teams to meet those goals. They hire visionary leaders who can see beyond current market trends and plan for a successful future. They create a structure to efficiently plan, collaborate, communicate, solve problems, and meet customer demands. They navigate change while either steadfastly maintaining a certain course of action or by pivoting to gain an edge over their competition or shaping the market with bold action. Organizations are complex, unique, and varied. They have similarities and differences we will investigate.

What will be covered in this chapter

»The changing workplace

»The challenge of increased quality

»Characteristics of high-performance organizations including (high-performing teams, strategic planning, change readiness, knowledge skills and abilities, communication, high-performance leadership)

»Employee motivation and commitment

»Global organizational behavior

»Organizational behavior dimensions including (strategy and structure, obtaining management support, empowering and developing teams, seizing opportunities, remaining customer focused, influencing corporate culture, shared purpose and vision, coaching people, shaping the environment, agile leadership, leading through change, promoting the company’s vision)

»Leadership responsibilities

»Communication Impacts on Organizational Culture including (strategic alignment with employees, leadership behaviors to build the system, measuring performance through success with customers, continuous process improvement)

»Training and development

»Diversity and inclusion

»Globalization and leadership

»Global culture and communication

1.1 The Changing Workplace

Technological disruptions have hindered the work environments in numerous ways. They can be visually perceived in the augmented utilization of automation, robotics, and expert systems such as Human Capital Management (HCM), Enterprise Resource Planning (ERP), and computer-integrated manufacturing systems, which altered the way many products are manufactured today. Such changes influence not only production proficiency and product excellence but also the nature of jobs. Many businesses are replacing front-line supervisors with self-managing work teams who assume accountability for overall department operation as well as production planning, quality control, and even performance appraisals.

These constant innovative and technological changes require business leaders to implement workplace transformations to adapt these technological disruptions while still developing their workforce. Managers can respond to the technological imperative while preserving and improving the human resources of the company. In terms of corporate resilience, striving to become more efficient is perhaps the biggest challenge for management Greater competition requires careful consideration of people, groups, and whole organizational structures.

1.2 The Challenge of Increased Quality

To stay ahead of competitive advantage and establish market competitiveness and other correlated factors such as cost-efficient operational efficiency, production and manufacturing efficiency, budget controls, learning and development investments. Total Quality Management is responsible for enhanced quality control of products and services that are constantly requested by customers. Total Quality Management is defined as the high-level efforts to monitor and improve quality of product and processes within a firm. As an example, automotive giant BMW is recognized for its high standards, quality, and service. Therefore, the competitive advantage for BMW is the superiority of its luxury cars.

Principally, if organizations want to stay ahead of their competition, they must be dedicated to high quality products for their customers. One of the biggest challenges an organization faces is to encourage their employees to create a superior quality of products and services.

Figure 1.1

Characteristics of a high-performance organization

1.3 Employee Motivation and Commitment

Adversarial relationships between leadership and employees that organizations accepted in the past are a major hurdle in the pursuit of industrial competitiveness. Organizations face situations where the average employee clearly sees no reason to increase output or improve the quality of current outputs whether an organization is unionized or not. The company’s reward system frequently restricts performance, rather than improving it. At other times, rewards encourage employees to increase quantity at the expense of quality. Furthermore, North American organizations often view their workforce as a variable expense and often cut jobs over short term operational or budget gains. As a result, the organization is lacking employee commitment. Rates of turnover and absenteeism are often unreasonably high, further eroding the efficiency and effectiveness of the performance.

If businesses are to succeed in an increasingly turbulent environment, managers need to find better ways to create and motivate employees. The workforce of an organization is often its largest asset and failing to appropriately manage it results in a poor return on the organization’s investment.

In the business world, organizations that manage the global complexity and interrelationships will accomplish high levels of organizational efficiency and competitive advantage compared to other organizations. Many global organizations are currently wrestling to meet the quality demands of the customers and as a result, companies are becoming more and more dynamic and competitive to adapt new mechanisms, tools to make their organizations more agile and flexible. This approach is helping organizations to strengthen economic initiatives globally. However, to achieve this effectiveness and flexibility within the organizations many companies are moving toward shared service models for functions such as product management, human resources, finance, supply chain, etc. These functions are centralized and serving different business units of the organizations. To align with the shared service models, the organizations employ Human resource business partners, finance business partners, product manager business partners in every business unit that interact with shared functions and yet support sales leaders of their respective business units.

Global organizations and the international economy have been around for decades; however, today’s global and economic business activities pose different challenges for organizations. Developing global strategies and managing global and diverse cultures is the new norm for the managers. Business leaders are expected to have a motivational approach; a total rewards system that ties into employee growth, organizational design is customized for different work groups. Innovative approaches are required to serve the global market as opposed to the traditional markets.

1.4 Global Organizational Behavior

Business leaders of global companies must have local sensitivity with global knowledge and strategic skills to understand and serve local markets with global flavor. Few examples of global companies with local presence like McDonalds for U.S. Customers serve different flavors, while McDonalds in India and China have different local offerings, Proctor and Gamble’s detergent is customized for European markets due to the different make of the washing machines. These are just some of the examples of organizations serving local markets with global presence.

This global dynamic adds more complexity to the culture of the organizations. Companies need to implement and manage cross-culture, cross-border groups. The need for global networks, systems, processes, compliance adds to the culture’s complexity. Companies should not ignore the cultural differences while developing a cross-cultural environment. Managers must learn to manage individual differences while organizing functions, business units, skills/tasks, etc. Communication skills are a key factor in globalization. Managers with global teams will need to be able to communicate with diverse culture teams, multilingual skills will be a plus.

Global organizations have many complexities to work around from people, structure, processes, etc. However, there are some best practices that can mitigate some of the risks.

Figure 1.2

Organizational Behavior Dimensions in Organizations

1.5 Leadership Responsibilities

The leadership team has the highest responsibilities in a high-performing organization. It is not just about getting work done within the team; on the contrary, the role is about the increasing demand to get innovative when managing remote teams with diverse cultures globally. The traditional style of leadership is less effective with the virtual organizations worldwide. While there are still full-time and regular employees in organizations, the companies are also reaching out to contractors and consultants for special projects. While technology is helping solve many operational issues, the managers are still struggling to find a common approach that works with different employee groups they work with.

Leading organizations are becoming tougher than ever. On one side, we have many energetic, enthusiastic, capable workforces who are in different parts of the world with different time zones – while on the other hand, we have traditional managers who are yet to learn and apply new ideas to manage people. Fundamentally, the organization is composed of people and this is the basic reason why managers must have great knowledge on employee behaviors and underlying emotions to produce positive business results.

1.6 Training

Core elements of the organizational behavior are people, structure, technology and environment. Not only do managers need to hone their communication skills in a global environment, but there are some crucial factors of organizational behavior that must be considered. People are the most intrinsic element of an organizational social system. Companies are required to be highly innovative in their total reward systems due to the increased competitiveness across the job market. Global organizations like IBM, PricewaterhouseCoopers (PwC), etc., are already using virtual cross functional teams across their different functions. With the remote teams, challenge comes to maintain trust and build relationships among each other. Managing cross-functional teams requires training for the managers to educate them on managing these types of employee groups. The training should also focus on employees understanding their own cultural beliefs, different communication styles including verbal and non-verbal, different personalities, etc.

1.7 Diversity and Inclusion

One of the most important benefits of having a diverse workforce is the ability for businesses to make quality decisions. In a diverse environment, people and teams usually have different perspectives and opinions coming from different cultures and backgrounds. Particularly in diverse teams, people are more willing to consider alternate views and they tend to think outside the box while making decisions. An organization with a diverse workforce is more likely to create products and solutions that appeal to different ethnic, diverse, and broad customer base. PepsiCo was able to grow 8% revenue due to diverse marketing efforts back in 2004. They also increased the women and ethnic minority groups in management and other levels within the organization. Similarly, Harley-Davidson is pursuing diversification marketing efforts to reach a different customer base. To promote these efforts, the company is promoting diversity and inclusion at all levels in order to stay competitive.

The new diversity mantra, in a global economy is more complicated than ever and is no longer about how many people we have in the teams, rather it is about how many diverse people we have in a team to reach higher quality decisions. Teams with the most diversity understand the needs of their client groups and customers better and companies earn the trust of their customers faster and better. Additionally, when diverse employees are treated equally and fairly, they tend to be motivated and satisfied. Whereas if the workforce is not treated fairly in a diverse organization, the company loses the credibility it had within the workforce.

Organizations that do a better job at increasing the diversity of their employees and customers see more rewards on the stock market and gain the trust of the investors. Investors can judge a company’s long-term growth based on their diversity efforts. Companies that perform in the top 10 financially are more diverse (Inclusion 2020). The other benefit the organization has with the increased diversity efforts is the low litigation expenses. Companies with poor diversity efforts have high expenses on lawsuits. When companies do not pay attention to the EEOC and violate the laws, employees may file a complaint with the EEOC. And the EEOC will investigate the complaint and act as a mediator with the people and the company. If they do not reach the settlement, the EEOC will file the lawsuit against the company. Nevertheless, of the outcome, these lawsuits are extremely expensive and come at the cost of bad branding for the organization. For example, Coca-Cola was faced with a lawsuit for racial discrimination resulting in a $192 million settlement. As a result of these efforts, companies that manage their diversity efforts effectively tend to outperform their