Organizational Behavior - MGT502 VU

Lesson 5
INDIVIDUAL DIFFERENCES: ABILITIES AND PERFORMANCE
Overview

Understanding and managing global organizational behavior begins with understanding the nature of the
differences between national cultures and then tailoring an organization’s strategy and structure so that the
organization can manage its activities as it expands abroad. To succeed, global companies must help their
managers develop skills that allow them to work effectively in foreign contexts and deal with differences in
national culture.

A global organization is an organization that produces or sells goods or services in more than one
country.
To exploit the advantages of the global environment, an organization has to manage activities at the
raw-materials, intermediate-manufacturing, assembly, distribution, and final-customer stages.
Methods an organization can use to control these activities include exporting, licensing, joint
ventures, and wholly owned foreign subsidiaries.
Global learning is learning how to manage suppliers and distributors and to respond to the needs of
customers all over the world.
There are three principal strategies that global organizations can use to manage global expansion,
each of which is associated with a type of global organizational structure: an international strategy
and international divisional structure, and a transnational strategy and global matrix structure. The
more complex the strategy, the greater is the need to integrate the global organizational structure,
and the stronger the global culture needs to be.
All the challenges associated with understanding and managing individual and group behavior that
are found at a domestic level, such as motivating and leading workers and managing groups and
teams, are found at a global level. Expatriate managers must adapt their management styles to suit
differences in national culture if they are to be effective.

Implications of globalization:

Following are the implications of globalizations:

– New organizational structures
– Different forms of communication
– More competition, change, mergers, downsizing, stress
– Need more sensitivity to cultural differences

Organizations expand globally to gain access to resources as inputs and to sell outputs. Labor costs are
lower in many other countries, and raw materials can be obtained more cheaply, due to lower labor
costs. Companies seek the expertise found in other countries (e.g., the design skills of Italian
automakers or the engineering skills of German companies). Customers are a resource that motivates
companies to expand globally.

To operate abroad, to obtain inputs or customers, an organization must understand differences in

national cultures. A national culture is a set of economic, political, and social values in a particular
nation. Global organizations must recognize expressions of cultural values, such as ceremonies, stories,
and symbols or face the wrath of local people. People from different countries have nonverbal
communication difficulties because of different traditions.

Competition is everywhere in today’s global environment. Organizations compete with foreign com-
petitors at home and abroad. The world is viewed as a single market, with countries as subparts of that
market. Organizations must develop strategies, structures, and cultures to compete successfully in a
global environment.

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The challenge of managing a diverse workforce increases as organizations expand their operations
internationally. There are several issues that arise in the international arena. First, managers must un-
derstand cultural differences to interact with workers and associates in foreign countries. Americans
have an individualistic orientation, whereas the Japanese have a collectivist orientation. Understanding
the differences between national cultures is important in any attempt to manage behavior in global
organizations to increase performance.

Managing a Diverse Workforce

The workforce has become increasingly diverse, with higher percentages of women and minorities
entering and advancing in organizations. By the year 2005, African Americans and Hispanics will
compose over 25 percent of the workforce whereas the percentage of white males will decrease from 51
percent to 44 percent of the workforce. Increasing diversity, or differences resulting from age, gender,
race ethnicity, religion, sexual orientation, and socioeconomic background, represents a major challenge
for managers. Members of a group who are very diverse are likely to have different experiences,
assumptions, and values, and could respond to work situations in very different ways. Managers face
three challenges as a result of increased workforce diversity: fairness and justice, decision making and
performance, and flexibility.

Following and the challenges for the organization by Increasing Diversity in today’s
organizations:

– Changing workforce demographics

– Competitive pressures
– Rapid growth in International business
– More women in workforce and professions
– Diversity has advantages, but firms need to adjust through:
• cultural awareness
• family-friendly
• empowerment
Technology

Technology is changing people’s jobs and their work behavior. Quality management and its emphasis
on continuous process improvement can increase employee stress as individuals find that performance
expectations are constantly being increased. Process reengineering is eliminating millions of jobs and
completely reshaping the jobs of those who remain, and mass customization requires employees to learn
new skills. We defined the term technology earlier to mean "how an organization transfers its inputs into
outputs." Today it is also widely used to describe machinery and equipment that use sophisticated
electronics and computers to produce those outputs. The common theme of these technologies is that
they substitute for human labor in the transformation of inputs into outputs. This has been happening
since the mid 1800s. We are concerned about the behavior of people at work—it is important to discuss
how recent advances in technology are changing the work place and the work lives of employees.

Ethics

Moral principles/values -- determines whether actions are right/wrong and outcomes are good/bad.

Ethical behavior

– “Good” and “right” as opposed to “bad” or “wrong” in a particular setting.

An organization’s ethics are rules, beliefs, and values that outline ways in which managers and workers
should behave when confronted with a situation that may help or harm other people inside or outside an

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organization. Ethical behavior enhances the well-being (the happiness, health, and prosperity) of
individuals, groups, organizations, and the organizational environment.
Ethics establish the goals and behaviors appropriate to the organization. Many organizations have the
goal of making a profit, to be able to pay workers, suppliers, and shareholders. Ethics specifies what
actions an organization should take to make a profit and what limits should be put on organizations and
their managers to prevent harm.

Ethics can also define an organization’s social responsibility, moral responsibility toward individuals or
groups outside the organization that are directly affected by its actions. Different organizations have
different views about social responsibility. Being socially responsible means performing any action as
long as it is legal. Others do more than law requires and work to advance the well-being of their
employees, customers, and society in general. Ben & Jerry’s Homemade, Inc. contributes a percent of
profits to charities and community needs. Green Mountain Coffee Roasters seeks out coffee growers
who do not use herbicides and pesticides and control soil erosion. All organizations need codes of
conduct that spell out fair and equitable behavior to avoid doing harm.

Ethical dilemmas occur in relationships with:

– Superiors.
– Subordinates.
– Customers.
– Competitors.
– Suppliers. Why Do We Care?
– Regulators.
Ability Ability

“Mental and physical capabilities to

PERFORMANCE
perform various tasks”

Intellectual Abilities: The capacity to

Motivation Opportunity
do mental activities
Performance =
• Number aptitude f (Ability, Motivation, Opportunity)
• Verbal comprehension
• Perceptual speed
• Inductive reasoning
• Deductive reasoning
• Spatial visualization
• Memory ability

Emotional intelligence

Emotional intelligence is the ability to understand and manage one’s own feelings and emotions and the
feelings and emotions of others. Research on emotional intelligence is in its early stages. However, it is
plausible that emotional intelligence may facilitate job performance in a number of ways, and a low level of
emotional intelligence may actually impair performance. Emotional intelligence is important for managers and
people in leadership positions who must understand how others feel and manage these feelings.

Physical Ability:

“The capacity to do tasks demanding stamina, strength and similar characteristics”

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For some jobs, physical ability is important. Physical ability consists primarily of motor skill, the ability to
manipulate objects in an environment physically, and physical skill, a person’s fitness and strength. According
to Fleishman, there are 11 types of motor skills (e.g., reaction time, manual dexterity, speed of arm movement)
and 9 types of physical skills (e.g., static strength, which includes the ability to lift weights and stamina).
Physical abilities are typically measured by using physical tasks, such as lifting weights, to determine an
individual’s level of strength. In addition to ensuring that employees have the abilities to perform at high level,
organizations should provide employees with the opportunity to use their abilities on the job.

Basic Physical Abilities

Strength Other Flexibility

Factors Factors Factors

For managers, the key issue regarding ability is to assure that workers have the abilities needed to perform
their jobs effectively. There are three fundamental ways to manage ability by matching it to the job: selection,
placement, and training.

Learning

“A relatively permanent change in the behavior occurring as a result of experience”

Two approaches to learning are offered by operant conditioning and social learning theory. Organizational
learning complements these approaches by stressing the importance of commitment to learning throughout an
organization.
Organizational members, especially newcomers, must learn how to perform new tasks. Experienced
employees must learn how to use new equipment and technology or how to follow new policies and
procedures. Learning is a fundamental process in organizations. This chapter discusses principles of learning
that managers can promote to maintain desired organizational behaviors such as good customer service or
manufacturing high-quality products.
Learning consists of a relatively permanent change in knowledge or behaviors that result from practice or
experience. This definition has three key elements: (1) permanent, (2) change, and (3) through practice. A
temporary change in behavior or knowledge is not characteristic of learning. Learning takes place through
practice, or the experience of watching others, although it is tempting to take shortcuts. Theories of learning,
operant conditioning, and social learning theory emphasize different ways of learning.

Methods of Shaping Behavior

Reinforcement is the process that increases the probability that desired behaviors occur by applying
consequences. Managers use reinforcement to increase the likelihood of higher sales, better attendance, or
observing safety procedures.
Reinforcement begins by selecting a behavior to be encouraged. Correctly identifying the behavior is
important, or reinforcement will not lead to the desired response. A manager must decide if attendance at

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meetings is the desired behavior or attendance and participation. The manager would need to reinforce both
behaviors if both are desired.

Positive reinforcement increases the probability that a behavior will occur by administering positive
consequences (called positive reinforces) following the behavior. Managers determine what consequences a
worker considers positive. Potential reinforces include rewards such as pay, bonuses, promotions, job titles,
interesting work, and verbal praise. Rewards are positive reinforcements if a worker acts in the desired manner
to obtain them.
Workers differ in what they consider to be a positive reinforce. For some, titles are rewards, for others it is
vacation time. Once the desired behavior is determined, reinforces must follow to increase reoccurrence.
Organizations use reinforcement to promote the learning and performance of many behaviors. Some
organizations use positive reinforcement for diversity efforts and to retain valuable employees.

Negative reinforcement increases the probability that a desired behavior, then occur by removing a negative
consequence (or negative reinforce) when a worker performs the behavior. The negative consequence is faced
until a worker performs the desired behavior, then the consequence is removed. A manager’s nagging is a
negative reinforcement, if the nagging stops when worker performs a task correctly. Negative reinforces differ
for various individuals. Nagging may not affect some subordinates. They will not perform the desired
behavior, even if the nagging stops.
When using negative and positive reinforcement, the magnitude of the consequences must fit the desired
behavior. A small bonus may not be sufficient to cause a worker to perform a time-consuming or difficult task.

Extinction: According to operant conditioning, both good and bad behaviors are controlled by reinforced
consequences. Identifying behavioral reinforces and removing them can decrease a behavior. An undesired
behavior without reinforcement can diminishes until it no longer occurs. This process is called extinction.
Extinction can modify the behavior of a worker who spends much time talking or telling jokes. The attention
of coworkers reinforces this behavior. If coworkers stop talking and laughing, the worker is likely to stop
telling jokes. Although extinction is useful, it takes time to eliminate the undesired behavior. When behaviors
need to stop immediately, managers may resort to punishment.

Punishment consists of administering a negative consequence when the undesired behavior occurs.
Punishment is not the same as negative reinforcement. It decreases a behavior, whereas negative rein-
forcement increases the frequency of a behavior. Punishment administers a negative consequence, whereas
negative reinforcement removes a negative consequence.

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